Selecting an Accountant and a Solicitor
You will need professionals to help when buying your business. Get recommendations from your bank manager, business
advisors and business friends. Check out the Yellow pages. Interview several -
have they the necessary experience in your area of interest, do their resources
match your needs, are you happy with how and what they charge? You are
selecting a costly but critical resource - you need to be dealing with someone
whom you like working with, and who will add value to your business.
Accountants - many have good experience in valuing businesses
for re-financing, taxation purposes, and matrimonial splits. However when
buying a business, market forces will often challenge the textbook theories -
business brokers and valuers can generally help provide some market sense.
Accountants tend to work from a more theoretical viewpoint. They are strong on
spotting trends from historical data, will understand your business needs, and
offer sound financial advice, they are knowledgeable on tax issues, and are
objective professionals. In general they err to the conservative, want the
facts, and are advice offerers - not deal doers. It's your money so best you
negotiate. They're costly, but they're needed.
Using your Accountant - When buying a business your Accountant will be
able to assist in reviewing the businesses accounts, help with cash flow
projections, offer suggestions on how best to structure the deal, and give
their view of what they believe the business is worth. Be specific with what
you want from your accountant, ask for a quote or agree on the time to be spent
on the task, see what you can do to help the process - this is useful in
gaining an understanding and in keeping your costs under control. Don't however
be afraid to share the bigger picture - they need to know what's going on to
give you their best advice.
In Selecting an Accountant look to; how well you relate to the partner
handling your business, do they have a proactive approach, what are their
skills and strengths - are they technically creative, have they good taxation
knowledge, are they experienced in the area of your proposed business
activities. Does the firm offer services that are appropriate to your needs?
How and how much time would this person spend on your business a year - what is
his or her hourly fee (and how do they charge)? What are the other charges you
may incur (non partner costs), and what could you be expected to pay annually?
Do they suggest ways in which you can minimise your costs?
Solicitors - there are likely to be contracts, leases, and or
franchise agreements. Lawyers work hard to protect, they don't like to
compromise your interests or themselves. They like the Law and are generally
good at it. Lawyers are good at spotting the legal risks and in providing
advice on such matters - they are not financial professionals, or negotiators.
While you are likely to use your lawyer less than your accountant, they are
still a costly resource.
Using your Lawyer - When buying a business there will usually be an
offer to buy, contracts, leases, and maybe a franchise agreement - all of which
your lawyer can advise you on. If you are confident in commercial transactions,
you may be able to undertake some of this work yourself as many deals are done
on standard, easy to understand documents. If unsure get your lawyer to check
over what you have pulled together before you present it. Again, don't be
scared to ask for an indication of costs.
In Selecting a Lawyer consider; how well you relate to him or her, are
they proactively looking ahead and offering useful advice. What are their
strengths and skills - do they specialise in commercial or business law,
franchises, in setting up trusts - if some of these are outside their area of
expertise, are there others in the firm who can assist in these areas? Does the
firm offer the resources and expertise that are appropriate to your future
needs? Have they a number of clients similar to you, or do they deal with
bigger companies? What can you expected to pay for their services - how much
per hour, part hour, or possibly a phone call? Get some indications of costs
for the things you want to do.
Your ideal Accountant and Lawyer are people that you relate to, who have the
appropriate skills and resources, who will add value to your business. Get
recommendations, interview several, and select professionals that best suit
your needs - while most can cover many aspects, some specialise in specific
areas, have more practical experience, and will therefore tend to offer greater
value. If it isn't working, or your needs have changed - talk with them and
seek out a better option.
Richard O'Brien is the Managing Director of nzbizbuysell - an online
advertising site dedicated to the buying and selling of New Zealand businesses.
For further information go to...
nzbizbuysell - the New Zealand Business for Sale website
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