Today, I am going to be talking about buying a business. Many people have made the decision to break away from the corporate grind, and break away from the larger organizations to start their own business. It is a fantastic experience, you learn a lot, it is great; but do not underestimate the fact that there is a ton of work that goes into it, and careful planning will help you get on the road to success.
You have made the decision to go into business for yourself; however you decided, instead of starting a business from scratch, you would prefer to buy an existing business. Thus, you are going to need a couple of people on your team to help you get through things successfully.
1. Business Broker or Realtor: There are some great business brokers here in the Tampa Bay area who have sold hundreds and hundreds of businesses, and know the ins and outs. You will need this person to help you in preparing the documents, crafting the offer, and putting together the terms of the purchase.
2. Attorney: There are some great attorneys who are very familiar with Florida law and who deeply understand the nuances of buying and selling business. That attorney is also going to help you come up with a contract that is favorable, they are going to help you talk about what the law says about the terms or the financing, they are going to also look at your buy/sell (your purchase agreement) and make sure that everything is in the proper place.
3. Investor: There are some very talented bankers who have a lot of experience in this area. The banker can help you put together a deal from a dollars and cents perspective and can help you figure out the best way to structure the financing side of the project. On a positive note, as we sit here right now on 5/25/2018 I can tell you banks are lending money, banks are excited about new business, and they want to put there money out on the street.
4. CPA: As you guessed it, last but certainly not least, you need a good CPA on your side. When you are buying a business, you need to know what you are buying. Are you buying the assets of an existing business? Are you buying the stock of an existing business? Which is it? Both have very different tax consequences to the buyer, and the seller, and generally result in a back and forth discussion, or negotiation based on what those tax ramifications are. The worst thing you could do is go into a transaction as big as buying a business, and not know what the tax implications are going to be for you.
As you can see, you need a qualified team of professionals in place to assist you in the acquisition of your business. We at Sams CPA work with professionals in all these areas and would be happy to make those introductions for you if you do not already have those relationships. If you do relationships in place, we are delighted to work with your existing advisers to make this the best transaction you could possibly have.
Once the sale is over and you have bought the business, now the fun part begins. Keep in mind, you are still going to need this same team of advisers with you each and every day. Keep in mind, there will always be thing that come up in the course of doing business and you are going to need this same team of advisers for the life of your business. You never get away from the legal, and financial, and banking compliance and operational issues that come with running a business. For instance, on the CPA side, you have got payroll, you have got bookkeeping, you have got tax filings, you have got sales tax, you have got all kinds of things that you do not want to be stuck dealing with on a daily basis. Again, we know some great professionals who can help you get there once you have made the decision to buy an existing business.
You might also be interested in our videos on Payroll Service Providers, Business Expenses, Business Provisions of New Tax Law, Small Business Deduction Section 199A, Year End Checklist for Business Taxpayers, and Save On taxes By Putting Your Kids On The Payroll
If you have any questions, comments, or ideas for future videos, please let us know.