MOTIVATION TO SELL

• Is it a motivated seller and why?
• How much debt does he need to pay off? (mortgages loans?)
• How much cash does the seller immediately need?
• Does he need that cash all at once?
• Is he looking for a way to avoid capital gains? Or reduce or spread out his tax liability?
• Are there other family members involved in the decision making process?
• Has the reputation of the company been damaged at all?
• How dependent has the business been on the current owner? Relationships with employees? Customers? Vendors?

 
STRATEGIES TO CONSIDER WHEN BUYING A BUSINESS

• Consider buying on installment
• Don't ever be shy in asking for information- your strategy is to "discover" as much as you can
• Consider holding back some of the purchase price until after closing- say six months or a year in case you suffer a loss due to the owner failing to "disclose" information
• Consider buying land in one deal and the company in another- if the two are indeed owned separately
• Consider and 'earn-out' provision where seller only gets paid if certain financial milestones are met

MARKET PERCEPTION
What is it? With Customers and Vendors?

• What is its brand position? Is it healthy?
• Do they have a good reputation?
• Do they have a customer database?
• Do they have a prospect database?
• Do they know how large their market is?
• Do they have a CRM?
• How are they perceived in the marketplace?
• Who are their key partners and alliances?
• Are their prices high? Low? Middle?
• Are their competitors who are larger, cheaper, quicker, faster that have the customer's attention?
• What are the barriers to entry to this business?
• Does the business have significant vendors or customers?
• Any vendors that we use that we purchase 10% or more of our product from?
• Any customers that make up 5% or more of revenues/sales?

Featured in the Daily Herald Business Section
This Series is being featured in the Daily Herald. Please enjoy Jim Kendall's Column:​
http://www.dailyherald.com/business/20171022/what-to-ask-before-buying-a-business ​

​

​LEGAL
What are you buying? If it is a stock purchase is it a C Corp?  S Corp? LLC?

• Is the business in good standing with the state and feds? ​
• Any pending lawsuits? Governmental proceedings?
• ​Survey on land
• Any independent contractors that should have been classified as "employees"
• what is the property zoned?
• Can any of it be sub-divided at a later date and sold off?
• Does the owner really own it? Do they have the legal authority to sell?
• Any workman comp claims? Unemployment claims? -any patents or copyrights of logos?
• Any business license and are the transferrable?
• Any tax registration certificates? Are they transferrable?
• Is the business in compliance with zoning laws?
• Any toxic waste or environmental problems
• Do they own photos, testimonials that may be used in print collaterals or the website?
• Any employee contracts with non-competes?

​Matching Ideas with Resources:
We have referrals available for Attorneys specializing in buying businesses.

​ASSETS

• What assets are you buying?
• Any intellectual property? (trademarks, trade secrets)
• Any inventory or goods obsolete? What is their value?

​FINANCIAL QUESTIONS

• Cash Flow Statements
• Balance Sheets
• Accounts Payables And Receivables
• Benefit Contracts
• Insurance/Pension/401 K
• Outstanding Debts
• Debt Review
• Ucc-A Forms - To Find Out Who Extended Credit To The Company -What Secured Assets Were Tied Up In Previous Loans
• Do They Have Healthy Margins?
• How Do Their Customers Pay For Their Products?
• Are Their Expenses In Line With Their Revenues?
• Where Will Your Down Payment Come From?
• What Sources Of Financing Do You Have? (Friends, Family,)
• What Sources Of Funding Do You Have (Self-Directed Funds From Retirement Accounts, Stocks, Home Equity)?
• Is The Seller Open To Seller Financing?
• Is The Seller Open To "Run To Own”?
• Can You Furnish A Statement Of Personal Net Worth And Resume?
• What are the terms of renting the building/land if you are not buying?

GLM has it's Mission and Vision Statement on it's website. It is something a few prospects that have being clients mentioned they liked reading before meeting with us. Although you can read it on our About Page, I would like to show it here as well and remind you to work on this for your company. If you need help in this area, contact us for assistance.

Mission Statement
"GLM, Inc. is an accounting and consulting firm offering a broad range of services to meet the needs of our clients by fostering an environment that encourages personal and professional growth and a commitment to the firm’s core values. We will continue to be known in the community for delivering timely, quality, professional services through a multi-disciplinary approach.”
 
Vision Statement
“Our vision is that GLM, Inc. will be recognized as the professional service organization that accomplished the ultimate balance between outstanding client service, a focus on family and the success of the firm. This will be accomplished by creating a culture of pride and passion that will enable us to continue attracting, training and retaining quality people, who will be rewarded, recognized and respected for their contributions to a firm that is founded on shared core values.”
 
Core Values
 
Integrity- Requires that we possess and steadfastly adhere to high moral principles and professional standards.
 
Excellence- Requires us to provide clients (both external and internal) with exceptional service and experience.  This means that our work product is of outstanding quality, meets delivery promises and provides value to our clients. 
 
Career Development/Continuous Improvement - Our professionals dedicate themselves to constantly improving client experiences.  As individuals we continuously learn new skills and improve existing skills and competencies.  As accounting, tax and consulting professionals we are committed and dedicated to our clients, the firm, and ourselves.
 
Work/Life Balance – We respect various work/life requirements of our people and strive to be sensitive and flexible to each individual case.  We work with our full time and part time employees to create a win-win arrangement for them and the firm.  We work to live rather than live to work.
 
Client Service – We are committed to providing timely, reliable responses and to nurture the relationship with our clients.  Our goal is to define, measure, understand, manage and improve client expectations and be able to align them with firm core values, goals and regulatory compliance.

Tom Gosche, Accounting
630-675-8971  tomg@goglm.com
http://www.goglm.com/
Schedule a 30 minute meeting with me over Zoom: https://calendly.com/tomgosche/30mi