Defining the Business Buying Support Team
The Business Buying Support (BBS) Team is the group of people who will help you make a successful business purchase. They are the people who identify problems, dissect the business, point out inconsistencies and generally question your decisions. Most of all they should be there to protect your business and, ultimately, personal interests!
When you have identified a business you wish to buy it is essential you have the right team in place. They, no doubt, will cost more in fees than you have previously paid, but people who know what they are doing in their field of expertise will progress the purchase at a sensible rate whilst minimising your commercial and personal risk.
Why have a Business Buying Support Team?
It is important to have the team in place early in your discussion with a seller of a business. Having the team in place will send a clear message to the the seller that you are a serious buyer and able to act relatively swiftly. It also avoids wasting crucial time should the sale progress unexpectedly swiftly, or rival potential buyers start showing interest.
When should the Business Buying Support Team be Appointed?
You may not wish to officially appoint all members of the BBS team until you have made your first offer on a business, however you should have a clear indication of who you are going to use. This will require some initial ground work to establish who you will use before you begin any negotiations. It is important to be in a position to make decisions on the make-up of the team whilst not under pressure to use them. In other words, so the selection is a genuine choice and you have time choose another if the fit is not quite right.
Who Makes up the Business Buying Support Team?
The actual detailed makeup of the BBS team may vary depending on the business you are buying, but essentially it is comprised of the following people:
- The Accountant
- Business Broker
- Bank Manager or Finance Partner
Ideally this is someone you have used to finalise your current business financial accounts and submit the same to HMRC. The Accountant will have a good understanding of your current business and how you wish to develop that business. They should also have a good track record with regard to handling business purchases and sales and a thorough, proven, understanding of the tax implications of purchasing and selling businesses.
If you do not have an accountant that fits the above bill, try asking similar business owners who they would recommend. Ideally any new accountant should also specialise in, or have good knowledge of, your area of business. Take a look at potential candidates’ websites to begin with and check to see if they are members of the ICAEW, or ACCA.
An important point is that you make your final decision after a face-to-face meeting. Technical skills and experience are vitally important, but so is the ability to work together – there has to be hope of a good working relationship there. Remember, you are interviewing them, not the other way around – if the accountant cannot accept this idea – cross them off the list.
Your accountant may be able to introduce a good legal firm with a partner experienced in the field of purchasing businesses. Ideally, you may wish to request references from previous, or current clients, but you must get a good feeling for this person as you will be working with them and relying on them throughout the process. If they handle a mere one, or two sales a year, find somebody else.
A good solicitor will chivvy the purchase along, will organise with the accountant due diligence checks on the business and arrange for funds to be in the right place at the right time. They need to be willing to pick up the phone and speak to the seller’s solicitor, or accountant. Although this may seem like an obvious thing it is not always so obvious to some solicitors.
Additionally, the solicitor must have a good understanding of varying tax implications, regulatory issues and, maybe, even restrictive convenants.
If you are unable to find a good recommendation, then trade associations, or federations such as the Federation of Small Businesses may be able to assist.
You may wish to use a go-between such as a business broker during your purchasing process. You will most likely already have had dealings with a broker in your search for the right business.
The business broker can be useful at all stages from the offer stage all the way up to completion. The broker can help to ensure all parties are continuing to talk to each other throughout the buying/selling process – ironing out any hiccups that come up along the way.
You must have a good relationship with your broker as they may often be able to resolve complications much faster and thus much more economically than the solicitor. The business broker can play a pivotal role in the whole buying process, bringing everything together and identifying pitfalls before they occur.
Good business brokers can be hard to find, but we have no reservations in recommending A2Z Business Brokers as a broker that will supply professional and reliable support from start to finish.
Bank Manager or Finance Partner
It would seem to be self evident that if you are seeking to buy a business that you have finance available well in advance before seeking to buy. Unless you have a fund available specifically for business buying, we recommend that you should have discussed lending, or finance options well in advance of beginning your acquisition plans.
Any external finance support should be treat as part of the Business Buying Team. Perhaps even more than the rest of the team, it is important that this component of the team is involved and updated throughout the purchasing journey. In the final analysis, financial partners will be taking a risk just as you the buyer will and, perhaps, more so in some cases.
As with all teams in sport, military or business, the whole of the team should be greater than the sum of its parts. It is not good enough that all of the right players are on the field, what is really important is how they work together towards the final goal. The crux is often the right information, given to the right people at the right time, delivered with leadership and a sense of purpose and direction. If this was football we might look to the captain on the field of play to facilitate this, but as this is business buying, the business broker, can play this role.
The captain should have both the experience and technical skill to lead from the front and consolidate and motivate the team. With a strong track record of success and extensive experience, A2Z Business Brokers is the ideal captain of your Business Buying Support Team, so why not get in touch now and let us help you make your business purchase dream a reality.