How to reduce risks when acquiring a ready-made business in 2023
Before buying a ready-made business, it is necessary to conduct checks on various indicators. Further specific steps will be given.
It would be reasonable to conduct it over the past 3-5 years. The audit should be directed specifically to identify financial risks and this will help you reduce the possibility of receiving claims from counterparties by the organization. You can be sure that if the auditor checks all obligations with third parties and confirms them with the originals of reconciliation reports, then there will be no claims from suppliers, landlords and counterparties, about which there are data from the accounting report.
There is no complete protection against the appeals of new creditors. But you can try to protect yourself from unnecessary expenses by signing a Statement of circumstances with the seller of the business. In this case, if, at the conclusion of the contract, false data about the circumstances that matter is provided, then he will have to compensate for all the losses that were incurred because of this or pay a penalty that is prescribed in the contract.
Analyze the financial results report
This will demonstrate to you the profitability of the business. You will need to consult with the auditor about the report in order to have an understanding of how correctly it is formed. Next, it will be possible to search the Internet for competitors’ reports and compare the indicators of the reports. If there are strong deviations in the indicators, then this may indicate the unreliability of the reporting provided by the seller.
Conduct an independent market assessment of expensive fixed assets
Thanks to this, you will find out what the real value of assets is. If this cost is much higher than the market, then it will be possible to discuss with the seller a reduction in the cost of buying a business.
Conduct an inventory of assets
This should be done with the participation of a trusted representative and then you can be sure of the availability of those inventory items that you are promised to be transferred along with a share in the company.
Also, it will be useful to get certificates from the IFNS about open settlement accounts in banks and reconciliation of settlements with the budget will also help clarify the situation.
You can also visit the website of the arbitration court and see information about the seller, in particular: with the entire history of court cases, including analyzing the status of pending litigation.
Carefully compose a competent conversation with the help of professionals
Since the purchase of a business is a complex and multifaceted issue, an incorrectly drawn up contract can entail large financial losses. It is necessary to use the help of specialists in this matter.
Always carefully analyze the uniqueness of the offer, highlight what exactly is the value, what the business is based on and what you first need to focus your attention on. The right actions at the very beginning will serve as a good and reliable basis for the successful development of your new business.