Buying A Business

We are often approached by prospective and existing clients to advise them on buying a business.  Books have been written on this topic but the following provides an overview of some of the key points that need to be considered when purchasing a business.

The Starting Point

Like a house owner, business owners often have an over-inflated view of what their business is worth.  That can result in emotional issues intruding into negotiations.

The Investment Decision

The critical decision is evaluating the business and whether it’s a good deal.  Over paying for a business means the seller has taken value off the purchaser’s balance sheet.  The ultimate decision for a business buyer is “does the investment produce an adequate return” when assessing the business nature and its risk.  It is important the buyer is clear about his/her objectives.  Is the intention to “buy a job” or is it to make a serious investment with a focus on making a good income and significant capital gain.

Keep in mind, a high percentage of small businesses fail or cease within the first 5 years and remember once you own a business your capital is at risk.

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Taxing Matters

Taxing matters provides a summary of topical tax and business information relating to individuals and business. Trust Documentation While it is not longer necessary to  file gifting statements with the IRD (from 1 October 2011) a Deed of Acknowledgment of Debt and Deed of Forgiveness of Debt should still be maintained as part of standard…

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Staff News

UHY Haines Norton is pleased to welcome Lalita Robertson to the practise. Lalita is a qualified Chartered Accountant and has joined our Business Advisory Services team as a senior accountant. In his spare time UHY Haines Norton staff member Andrew Clarke can be found on the football fields around Auckland coaching his under 8 side…

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