The Business Of Buying A Business

Are you contemplating on growing your business enterprise by buying an existing business? Acquiring businesses is one of the fastest ways to double your market share and increase the profitability of your company. In such undertaking, you will want to seek professional help from a reliable Melbourne accountant aside from a business broker.

Before you take the plunge, here are some things you need to consider when discussing your plans with your Melbourne accountant:

Type Of Acquisition

What specific type of acquisition are you seeking? Buying a business requires a number of considerations. First, you will need to carefully deliberate and plan with your Melbourne accountant why your business needs to expand and what specific components from other existing businesses would best serve your company.

Ask yourself the following questions:
  1. Do you seek to expand client base, distribution channels or manufacturing capability?
  2. What long-term impact do you hope to achieve from an acquisition?
  3. Are there any major legislative, legal, or contractual obligations that should be met? For instance, certain industries are heavily regulated by the government.

Business Valuation

Before you will acquire a certain business, you need to valuate. With the help of your Melbourne accountant, it is critically important to perform due diligence, which will include a feasibility study and a formal business valuation. These documents will help you understand better the nature of the business you are planning to acquire, especially its profitability and its strengths and weaknesses. It is important to work with a Melbourne accountant who has extensive experience in such area and the industry you are operating in.

How You Plan To Pay

There are a number of ways a business can be acquired, namely through cash, stocks, product, contractual agreement or seller held financing. Work with your Melbourne accountant just to know what your financial limits are and how the acquisition will affect your current business cash flow as well as your ability to extend credit.

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