Saving business owners money – even before they own their business!
Background
An engineer by profession, this client was ready to quit his day job and become a business owner/operator. He had identified an opportunity that was on the market (listed at $1,800,000) and was eager to make an offer.
Although a highly qualified individual with an impressive work history, this client had no business ownership experience – a fact that was unfavourably viewed upon by the banks. He also didn’t know where to begin with developing a business plan, or how to conduct a due diligence to determine the business’ fair value.
The client recognised that he needed support from a professional partner that had broad experience in business and accounting.
Solution
Nav Accountants was engaged to assist our client in a number of areas, including the initial due diligence. During this process, which included a detailed analysis of the numbers, we were able to:
- Suggest our client an estimated valuation of the business.
- Create a business plan that would meet the expectations of the banks.
- Forecast the expected financial performance of the business.
- Provide advice on the best ownership structure for the business.
Outcome
With the support of the Nav Accountants team – and backed by a full and accurate due diligence – our client was able to purchase the business at $100,000 below asking price; a significant saving on what he was intending to offer.
In addition, with the right ownership structure in place and a full business plan created, our client was able to secure finance from the bank, save $40,000 in tax and have peace of mind from the asset protection plan we set in place.
If you’re thinking about buying a business, make sure you have the right accounting and tax advice before you make an offer. Contact Nav Accountants today to find out how we can help you.
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