Hiring an Accountant for the Business Buying Process
Hiring an Accountant for the Business Buying Process
First things first about Accountants; you need to use a CPA. This skill set is much different than a bookkeeper or a friend that is a CFO at another company. Accountants are very good at one thing; history. They crunch numbers based on historical data to let you get a true picture of the business you are looking at and find any hidden finance related inconsistencies. They can also sometimes model forecasts but are mainly very adept with past/current financial data and tax related implications regarding the purchase and operation of the company.
Where do I find these professionals?
If at all possible, you should ask around to other business owners that you know or you can ask your Business Broker or Business Advisor. It is best to stick with someone that is both local to the area in which you are buying the business or local to your home. Your attorney may also have access to a good business savvy Accountant.
What are the best hiring criteria?
Like I mentioned before, the Accountant must be a CPA. They must also have experience with businesses and preferably businesses of the size you are looking to buy. Someone who just handles personal accounting issues is not someone to bother with. Even better, but not necessarily a must, familiarity with the industry you are buying in would be a plus. This experience should really include knowledge of the due diligence process. Additionally, you want to set yourself up with someone that you feel will treat you with importance even after you buy since this is the person you should have on your team throughout the life of this business venture.
When should I hire one?
Once you have done all of your prep work including knowing exactly what type(s) of business you are looking for, then you should start looking for an Accountant. With this key information settled in your head, now during your interviews you can ask about their background with those company types. Do not actually bother hiring an Accountant until you are sure you are going to submit an offer on a business, which starts your due diligence.
What will they do for me?
First off, I should warn you that what you don’t want them doing for you is performing a valuation, unless they have a lot of experience doing so with the industry you are looking at. This is not their strong point. They should be taking the due diligence financials (P&L’s, Balance Sheets, Tax docs, etc.) and comparing them to what you were told via the Seller’s business profile as well as making sense of them to paint a financial picture for you.
A CPA should be able to show you past performance versus current performance. They may also be able to give you an idea of the future performance. Hopefully they can set up a spread sheet for you to try and run some possible projections by adjusting numbers on the spreadsheet. A good Accountant will also apprise you of any tax related issues that may come about regarding the business itself and with financing the purchase of the business with personal, bank, or seller funds.
Don’t bother asking their opinion of whether to buy or not. Even if they have one, it shouldn’t sway you either way. You have seen the business and during due diligence you should be observing it even more in action. That in conjunction with the financial picture the Accountant paints should be your indicators. Even if the business has numbers falling off, as long as there is no missing information (like a ridiculously low payroll) it does not mean the business is a bad buy. It may mean that the current owner is just flat due to being ready to retire or just plain losing interest. That’s why a Business Broker or Advisor can add good insight with the financial picture from the Accountant.
How much will it cost?
Unfortunately you really need an Accountant for your due diligence and you will most certainly need one for when you are actually running a business. If you chose one correctly by experience and fit with your personality, it will be worth the money. Although the rates can be all over the board depending on where you are located, generally the rates should be in the range of $120-$175 an hour. With this said, it will probably cost in the neighborhood of $1200-$2000 for most small business purchases. Not ridiculous but it adds up quick if you are not prepared and end up going to due diligence on 3 or 4 businesses instead of 1 or 2.
Making the right choice regarding an Accountant is crucial but much of that choice is based on your preparation before starting to hunt for a business. Do not overlook this fact. A good Accountant will also help to make sure you get all of the key financial docs from the Seller. Those key docs are based on the type of business you are looking at. Again, that’s why knowing what you want to buy and hiring an Accountant with a background in that business along with due diligence experience is important.
Best of luck in your quest for an Accountant!
Hiring an Accountant for the Business Buying Process - To learn more about this author, visit George J Sierchio's Website.
Like this article? Share it with your friends
As a business buyer, you must understand when to bring on the help of an Accountant and to how hire those with the right experience. Accountants are not business advisors, although some actually are Attorneys. I don’t recommend using the same person as your Attorney and Accountant. That situation usually does not end up working to your advantage as you may think.
First things first about Accountants; you need to use a CPA. This skill set is much different than a bookkeeper or a friend that is a CFO at another company. Accountants are very good at one thing; history. They crunch numbers based on historical data to let you get a true picture of the business you are looking at and find any hidden finance related inconsistencies. They can also sometimes model forecasts but are mainly very adept with past/current financial data and tax related implications regarding the purchase and operation of the company.
Where do I find these professionals?
If at all possible, you should ask around to other business owners that you know or you can ask your Business Broker or Business Advisor. It is best to stick with someone that is both local to the area in which you are buying the business or local to your home. Your attorney may also have access to a good business savvy Accountant.
What are the best hiring criteria?
Like I mentioned before, the Accountant must be a CPA. They must also have experience with businesses and preferably businesses of the size you are looking to buy. Someone who just handles personal accounting issues is not someone to bother with. Even better, but not necessarily a must, familiarity with the industry you are buying in would be a plus. This experience should really include knowledge of the due diligence process. Additionally, you want to set yourself up with someone that you feel will treat you with importance even after you buy since this is the person you should have on your team throughout the life of this business venture.
When should I hire one?
Once you have done all of your prep work including knowing exactly what type(s) of business you are looking for, then you should start looking for an Accountant. With this key information settled in your head, now during your interviews you can ask about their background with those company types. Do not actually bother hiring an Accountant until you are sure you are going to submit an offer on a business, which starts your due diligence.
What will they do for me?
First off, I should warn you that what you don’t want them doing for you is performing a valuation, unless they have a lot of experience doing so with the industry you are looking at. This is not their strong point. They should be taking the due diligence financials (P&L’s, Balance Sheets, Tax docs, etc.) and comparing them to what you were told via the Seller’s business profile as well as making sense of them to paint a financial picture for you.
A CPA should be able to show you past performance versus current performance. They may also be able to give you an idea of the future performance. Hopefully they can set up a spread sheet for you to try and run some possible projections by adjusting numbers on the spreadsheet. A good Accountant will also apprise you of any tax related issues that may come about regarding the business itself and with financing the purchase of the business with personal, bank, or seller funds.
Don’t bother asking their opinion of whether to buy or not. Even if they have one, it shouldn’t sway you either way. You have seen the business and during due diligence you should be observing it even more in action. That in conjunction with the financial picture the Accountant paints should be your indicators. Even if the business has numbers falling off, as long as there is no missing information (like a ridiculously low payroll) it does not mean the business is a bad buy. It may mean that the current owner is just flat due to being ready to retire or just plain losing interest. That’s why a Business Broker or Advisor can add good insight with the financial picture from the Accountant.
How much will it cost?
Unfortunately you really need an Accountant for your due diligence and you will most certainly need one for when you are actually running a business. If you chose one correctly by experience and fit with your personality, it will be worth the money. Although the rates can be all over the board depending on where you are located, generally the rates should be in the range of $120-$175 an hour. With this said, it will probably cost in the neighborhood of $1200-$2000 for most small business purchases. Not ridiculous but it adds up quick if you are not prepared and end up going to due diligence on 3 or 4 businesses instead of 1 or 2.
Making the right choice regarding an Accountant is crucial but much of that choice is based on your preparation before starting to hunt for a business. Do not overlook this fact. A good Accountant will also help to make sure you get all of the key financial docs from the Seller. Those key docs are based on the type of business you are looking at. Again, that’s why knowing what you want to buy and hiring an Accountant with a background in that business along with due diligence experience is important.
Best of luck in your quest for an Accountant!
Hiring an Accountant for the Business Buying Process - To learn more about this author, visit George J Sierchio's Website.
Like this article? Share it with your friends
 | |
 |
No article feedback found. |
| |
Leave Your Feedback |
 | |
| |||
Dave KurlanDave Kurlan is the founder and CEO of Objective Management Group, Inc., the industry leader in sales assessments and sales force evaluations, and the CEO of David Kurlan & Associates, Inc., a consulting firm specializing in sales force development. Dave has been a top rated speaker at Inc. Magazine's Conference on Growing the Company, the Sales & Marketing Management Conference and the Gazelles Sales & Marketing Summit. He has been featured on radio and TV, including World Business Review with General Norman Schwarzkopf, in Inc. Magazine, Selling Power Magazine, Sales & Marketing Management Magazine and Incentive Magazine. He is the author of Mindless Selling and Baseline Selling – How to Become a Sales Superstar by Using What You Already Know about the Game of Baseball. He created and wrote STAR, a proprietary recruiting process for hiring great salespeople, and he writes Understanding the Sales Force, a popular business Blog and is a contributing author to The Death of 20th Century Selling and 101 Great Ways to Improve Your Life, Volume 2. - Visit Dave Kurlan's Website |
|||
Kim CastleWith nearly two decades in the advertising and design business, with clients like Domino's Pizza, General Motors, Direct TV, Pedigree, Wolfgang Puck, Higher Octave Music, Hollywood Celebrity Products, Disney, and Paramount, as well as thousands of entrepreneurs around the world define, structure, communicate, and position their business for greater profits, BrandU(R) co-creators Kim Castle and W. Vito Montone discovered that entrepreneurs could experience the same power that big brands command for a fraction of the cost with the world's only process-based results-drive Integral approach to business creation. BrandU(R) is helping entrepreneurs grow with the power of extreme clarity from idea...to brand...to market(TM) and helping one million entrepreneurs become successful and whole so that they can make a difference in the world. Are you one of them? If you want to experience clarity all the way to the bank(TM), get started now at http://www.brandu.com. - Visit Kim Castle's Website |
|||
Staging DivaDebra Gould, aka The Staging Diva®, is President of Six Elements Inc., an internationally recognized home staging company. Inspired by many requests from aspiring home stagers wanting to start similar businesses, Gould created the Staging Diva Home Staging Business Training Program. Gould has trained over 1000 Staging Diva Graduates worldwide to start staging businesses. Buying decorating and selling six of her own homes in four years lead to an interest in real estate staging which she turned into a career with the launch of sixelements.com in 2002. Since then she has staged hundreds of homes in addition to teaching home staging training. Gould is the author of several home staging resources including a series of popular ebooks made up of a Design Guide, Color Guide and Portfolio Guide. For more information about Debra Gould visit stagingdiva.com. - Visit Staging Diva's Website |
|||
Dianne CramptonDianne Crampton is an executive leadership coach, team culture consultant, author and president of TIGERS Success Series, Inc. Dianne has been helping CEO's and Executives connect their employees to their core values and goals for over 20 years using the trademarked TIGERS team culture process, which stands for trust, interdependence, genuineness, empathy, risk and success. To download a free white paper on behaviors that build strong teams and behaviors that will predictably tear them down go here. Dianne's contribution to the 2010 Pfeiffer Consulting Journal (an imprint of John Wiley and Sons Publishers) entitled TIGERS Hearted Teams is available in November 2009. Her new book TIGERS Among Us: 5 Winning Business Team Cultures And Why, Three Creeks Publishing will release in March 2010. To receive publishing discounts, subscribe to the free TigerTracks Newsletter here. - Visit Dianne Crampton's Website |
|||
David BarrDavid Barr is the President of Venture Opportunities, Inc. David has been a professional business broker/intermediary since 1980 focusing on General Business Brokerage and Mergers and Acquisitions representing client transaction value from $400,000 to $20,000,000. Mr. Barr has handled the sale of over four hundred and fifty companies. David earned a university degree from the State University of New York majoring in economics and business. David holds the Mergers and Acquisition Master Intermediary and the Certified Business Intermediary designations from the International Business Brokers Association. He is also a Senior Business Analyst and a Texas licensed Real Estate Agent. For more information about David and Venture Opportunities, visit www.bizdealmaker.com. - Visit David Barr's Website |
|||
Anne BarrAnne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website |
|||
Casey GollanCasey Gollan, Business Coaching & Mentoring Programs. Add $1 Million to $10 Million in the next 1 to 3 years. Since 1996 Casey has to added hundreds of millions of dollars to businesses. Watch a free video see client results Business Coaching website. - Visit Casey Gollan's Website |
|||
Jeff FosterWebBizIdeas.com is a Minneapolis website design company founded to help people start an internet business by providing them with website, business, and internet resources that help foster the growth of successful online businesses and develop innovative Internet business ideas. We specialize in internet consulting & internet marketing. - Visit Jeff Foster's Website |
|||
|
To learn more about the Evan Elite Author Program please contact us. | |||
 | |
|  |
Subscribe to George's articles
 |
|
Buy a Business and Run It Successfully - If you have made the decision to purchase a business, your goal should be to buy a business and run it successfully. This blog will provide you with tips and insights in achieving this life changing goal.
|
|
|
 |
 |
|
George J Sierchio Video - George J Sierchio - There are a few reliable sources of finding businesses for sale. There are also some awful sources. Take a look at my tips on how to best find a business to buy.
|
|
|
 | |||||||
|
 | ||
|
||
 |
||
 |
||
|
| ||
 |
| Have you written articles that would be of value to entrepreneurs? Become an expert on our site by publishing them! Expose yourself to a wide audience, drive more traffic to your website and get more sales! Click Here for details. |
|
|
 |
| Modeling the Masters: Learn the true secrets behind Walt Disney's business success factors & grow your company! Video produced by Phanta Media |
|
|
 |
"Learn straight from Evan how you can Make a Full Time Income (And More) from a Website"
Click Here To Learn More |
|
|
|
|
Get advice & tips from famous business owners, new articles by entrepreneur experts, my latest website updates, & special sneak peaks at what's to come!
|
|
|
 Host Beneficiary Essence of Leaders Human Resources Checklist Corporate Secrets Challenges Of Change |
|
 | ||
 |
Top 50 Diversion Blogs
Top Diversion Blogs of 2009 | |
 |
Top 50 SEO Posts - 2007
Top SEO Posts of the Year | |
| ||
 | ||||
| ||||
|
| ||||
| ||||
|
|
|
|
|
||||||||||||
|
Email us your ideas on how to make our website more valuable! Thank you Sharon from Toronto Salsa Lessons / Classes for your suggestions to make the newsletter look like the website and profile younger entrepreneurs like Jennifer Lopez and Sean Combs!
|
|
|
| ||||||||||
|
| ||||||||||
|
|
||||||||||