Buying an established business is a great way to enter into the business world, or to expand your existing business empire. But purchasing a company isn’t something to enter into lightly.

Becoming the prospective owner of a new business means doing your homework, researching the business you plan to acquire and working closely with a team of advisers.

Here are five key questions to ask yourself, before entering into a deal.

1.    Why are they selling the business?

It’s vital that you know WHY the current owner is selling. It may be that they simply want to move on to a new business venture, or retire. But they may also be trying to extricate themselves from a business that’s not performing well, or has intrinsic issues.

Important questions to ask will include:

• • • Is the owner retiring?
    • Are they facing financial difficulties?
    • Are they looking to pursue other opportunities?
    • Are there any legal or regulatory issues?
    • Are there any personal reasons for the sale?

2.    Are the finances in order?

A common problem with both startups and established businesses is a lack of cashflow. It’s possible to have a business with a reasonable customer base and ongoing sales, but for poor margins and rising operational expenses to have a negative impact on the company’s finances.

Before you buy, drill down into the company’s finances:

• • • Get a copy of the business’ accounts, both statutory filings and internal management accounts, and have them reviewed by an accountant
    • Look for any red flags, such as debt, losses or cashflow problems
    • Make sure the business is profitable and has a solid financial foundation.

3.    Are the staff capable and engaged with the business?

As the saying goes, your people are your most important business asset. So, prior to buying the business, it’s important to get acquainted with the top team, management and employees.

To learn more about your prospective workforce:

• • • Meet with the key employees and get their input on the business
    • Make sure the core team is willing to stay with the business after the sale
    • Think about the cost of replacing any key employees who leave.

4.    What governance do you need to do?

Getting your due diligence and governance done is such an important step in your pre-purchase planning. You need to know this business is a viable enterprise, that there are no links to undesirable activities and that you’re not taking on a whole load of legal issues.

To make sure you’re ticking all the correct governance boxes:

• • • Review the business’ contracts and agreements
    • Run due diligence checks on the company and its owners
    • Make sure you understand the legal obligations of the business
    • Get legal advice on any issues that you are not sure about.

5.    Can you get the best price?

Purchasing a well-respected brand is a great move as an entrepreneur, but you don’t want to pay over the odds when agreeing on a deal. It’s important to have a clear ceiling on your budget, and to stick to your guns when it comes to negotiations on price and conditions.

To help secure the best price:

• • • Do your research and find out the fair market value of the business
    • Be prepared to negotiate with the seller to bring the price down
    • Don’t be afraid to walk away from a deal if you are not getting a fair price.

Talk to us about planning the purchase of a business

This isn’t an exhaustive list. There are plenty of additional factors to think about when buying a business. Any business sale is a complex process, where working with professional advisers will help you navigate the twists and turns so you come out with a successful deal.

As your adviser, we can help you:

• • Run due diligence checks on the business
  • Assess the company’s finances to check for red flags
  • Find the relevant routes to finance in order to fund the purchase
  • Connect you with M&A experts to advise on the sale.

If you’re looking to buy in the near future, talk to us.

The following content was originally published by BOMA. We have updated some of this article for our readers.

How can business automation streamline your business? Business automation uses technology to streamline and simplify all the repetitive manual tasks, processes and workflows that are part of the everyday running of your business.

Instead of spending hours of business time doing everything manually, automated systems can take on most of the heavy lifting. You can automate the data-entry of your bookkeeping, the sending of recurring invoices or the coding of transactions when doing your bank reconciliation – basically, any task that’s repetitive, rule-based and taking up your time.

Automation makes your processes faster, more accurate and more efficient. This frees up your time to focus on other important strategic and customer-facing tasks. It also means you can get more work done in less time, making the business more productive and profitable.

How does business automation affect your business?

Smart use of automation can give your small business a major boost. Instead of having to hire more people, you can grow the business and significantly reduce the admin workload for your existing human team. It’s the easiest way to set the foundations for scaling up the company.

By automating key areas of your operation, you can:

• • Streamline your workflows – business automation optimises your processes by automating tasks like data entry, payment collection and approval workflows. This reduces the manual effort that’s involved and boosts your operational efficiency.
  • Improve your process accuracy – automation cuts down on human errors by applying rules consistently and precisely. This means your financial calculations are more accurate, data is of a higher quality and the company has better compliance standards.
  • Save time and resources – all those tedious, repetitive manual tasks are now automated. This frees up valuable time for you and your team to focus on strategic activities, innovation and working more closely with your customers.
  • Become more cost-efficient – automation cuts back the labour costs that usually go hand-in-hand with manual tasks. You’re more productive, your operational costs are reduced and you don’t need any additional staff to grow the business.
  • Scale your business with ease – as your small business expands, automated systems are the special sauce that helps you scale up as quickly as possible. You can effortlessly meet the increased workload, grow your systems and stay agile and adaptable – two of the key skills for any ambitious business that’s looking for fast growth.

How can our firm help you with business automation?

Working automation into your business strategy is the fastest way to achieve your key goals.

With your main tasks and processes automated, you have a sleek, systemised business to drive your growth. And we’re always here to help you maximise this use of automation. We’ll help you review your operations to look for the automation opportunities – and can suggest the most effective software automation tools to add into your tech stack.

If you’d like to know more about the benefits of automation, we’ll be happy to explain.

The following content was originally published by BOMA. We have updated some of this article for our readers.

Founding, building and growing your own small business is a hugely rewarding experience for many entrepreneurs. But the road ahead isn’t always smooth.

There are common challenges that crop up and ongoing issues that need to be factored into your business plan, your strategy and your own personal thinking.

So, what can you do to beat these challenges and make the journey as frictionless as possible?

5 proactive ways to overcome your business challenges

We’d all love to know what lies around the corner when it comes to the future path of your business. The truth is that every business journey is unique. But there are common challenges that every owner-manager or CEO will be faced with – and being prepared for these hurdles is the best way to leap over them and take each challenge in your stride.

We’ve highlighted five common challenges and the simple ways to overcome them:

1.    Uncertainty

No-one has a crystal ball to know exactly what’s coming around the corner. But there are ways to be prepared for some unknown circumstances. You can’t fully predict the main external threats like government policy, economic conditions or freak weather conditions.

But you CAN use forecasting and scenario-planning tools to build up contingency plans so you have a Plan A, Plan B and even a Plan C. With forecasts of your business data, finances and industry trends, you can be ready to react, pivot and take positive action.

2.    Competition

Small businesses often face stiff competition from larger, more established companies. To stay ahead of the curve, it’s important to be nimble and agile. It’s also vital to find your niche and to know precisely why your customers value your offering. By ploughing a unique furrow and keeping your customers happy, you can give yourself an edge over larger, slower-moving corporate-size competitors.

3.    Access to capital

It can be a struggle to secure funding as a startup, particularly if you have limited financial resources or a poor credit history. Having a detailed funding strategy is a crucial way to overcome this problem. Keep your finances in order and make sure you have in-depth financial reports to show banks, lenders and investors.

It’s also helpful to focus on paying suppliers on time, keeping debt levels under control and ensuring your cashflow is in a positive position. These are all excellent ways to improve your business credit rating and show you’re a stable, risk-free prospect for lenders.

4.    Hiring and retaining employees

Attracting and retaining talented employees is difficult, especially during the ongoing talent shortage. Offering competitive salaries or benefits packages can be one way to attract people. But it’s also important to think about your brand reputation, your sustainability credentials and your CSR policy – all things that Millenial and Gen Z workers value alongside decent pay and benefits packages. Employees want to be proud of where they work, so make your company a progressive, satisfying and rewarding place to work.

5.    Keeping up with technology

Business technology is evolving at a rapid pace. It can be daunting keeping up with all the available apps, tools and software solutions that are aimed at your business. The trick is to be informed but selective about the apps you use.

Start with the operational and financial needs of the business and look for apps that can automate, improve efficiency or provide improved data and management information. Talk to other business owners and your profressional network to find out what the essential apps are in your industry. And do your research and homework before you choose any software solution to add to your app stack.

Talk to us about being an agile small business

Looking to the horizon for the upcoming pitfalls is essential as an ambitious and informed business owner. As your adviser, we can help you generate the most informative management information, to keep you agile and ready for what lies around the corner.

We’re also on hand to discuss your ongoing strategy, how to react to upcoming risks and the best ways to access capital and manage your company’s finances.

Arrange a meeting and let’s see what the future may bring for your business.

The following content was originally published by BOMA. We have updated some of this article for our readers.

As a business owner, you know you need to produce accounts – that’s a given. But do you know the difference between statutory accounts and management accounts?

Your statutory and management accounts have two very separate purposes, and producing both kinds is good practice for any business that wants a handle on its numbers.

Let’s take a look at the key differences and why you need these specific kinds of accounting.

1.    What are statutory accounts?

Statutory accounts are a legal requirement for any limited company or partnership. They’re the mandatory annual accounts you MUST produce, submit and file as a company. As such, statutory accounts are a regulatory requirement. You and your fellow company directors have a responsibility to ensure that these accounts are filed on time and in full.

Your statutory accounts will usually include a:

• • Directors’ report – giving an overview of business strategy and performance, key achievements and the company’s overall financial position. It will also cover shareholder information and dividends alongside broader information about the company.
  • Profit and loss statement (P&L) – to outline the income coming into the business, and the expenditure going out over the course of the annual period. This is a key indicator of the profitability of the business during the preceding year.
  • Balance sheet – to give a snapshot in time of the assets, equity and liabilities in the business. This is an indication of the financial health of the company on the date that the accounts are produced, a useful report for lenders and investors to review.
  • Cashflow statement – so you can see your cash inflows and outflows over the course of the period. In an ideal scenario, you want your inflows to outweigh your outflows. This is known as being in a positive cashflow position.
  • Notes to the Financial Statements – which contain supplementary details on your accounting policies, significant estimates, disclosures, and other relevant information for a comprehensive understanding of the financial statements.

2.    What are management accounts?

Unlike statutory accounts, management accounts are not a mandatory, legal requirement. But producing management accounts is still good practice for any growing business.

Management accounts are produced to keep you and your top team on top of the business. They will generally be a summary of all the most important financial information and will be run every month or every quarter, depending on your business. This mix of numbers, data and metrics is then used to inform your business thinking and your decision-making process.

A regular management information pack will include:

• • Sales performance and analysis
  • Financial statements (profit and loss, balance sheet, cashflow statements etc)
  • Key performance indicators (KPIs) tracking
  • Budget versus actual comparisons
  • Inventory and stock levels
  • Customer and supplier analysis
  • Cashflow forecasts for the upcoming period
  • Operational metrics re your production and delivery
  • Project updates re your main jobs
  • Management commentary and insights.

Talk to us about handling all your accounting needs

Having your statutory and management accounts at your fingertips gives you the best possible overview of your company’s past, present and future performance. Filing statutory accounts keeps you compliant with the law, while having deep-dive management accounts gives you the data and evidence for making properly informed business decisions.

We’ll help you produce your statutory accounts and tick all the compliance boxes. And we’ll also generate tailored management accounts to keep you on the ball with your numbers.

Get in touch to talk about your accounts.

The following content was originally published by BOMA. We have updated some of this article for our readers.

Running a busy and successful business means you often don’t have the time to step back and work ON the business. This can be a challenge if your aim is to grow and scale the company.

As experienced professional business advisers, we know the value of taking the time to ask yourself some pertinent questions. Holding yourself and the business to account is something we can help with. And there’s never a bad time to pose a few questions and gauge where you’re at with your planning, strategy, financial management and personal goals as an entrepreneur.

We’ve pulled together 10 hot questions to ask yourself as a business owner.

1.    Can you explain why a customer should choose your brand over another?

Knowing your value to a customer is vital if you’re going to market your offering in the most effective way. Think about why your brand stands out in the marketplace, and what opportunities and threats exist. This is the fastest way to tailor your brand to meet customer expectations.

We can help you by running a SWOT-based analysis of your business.

2.    How happy is your workforce?

Your people are such a vital asset, but they won’t work well if they’re dissatisfied and disengaged from your business values. Ask yourself, are your employees motivated and engaged by your mission? Is there anything you can do to boost this engagement?

We can review your people strategy and the staff benefits you offer to your employees.

3.    Are you meeting your cashflow goals?

Are there specific costs or inefficiencies that are holding you back from achieving a positive cashflow position? Ask yourself if your financial management is up to scratch. Identify your failings and tighten up your cash process.

We can review your cash management and look for efficiencies and cost-saving opportunities. 

4.    What keeps you awake at night?

It’s a stressful role being the boss, and there’s likely to be a lot playing on your mind. Consider whether there are any recurring business issues that are holding you back, or unexpected pitfalls that have appeared along the course of the business journey.

We can offer you seasoned advice whatever the issue, with resolutions to ease your worries.

5.    Are you embracing everything that tech and AI has to offer?

Technology is moving fast with AI solutions and digital systems now an integral part of many business models. But are you doing enough to bring your business into the digital age? Are there tasks could you automate, or processes you could streamline?

We can suggest a suite of apps, software tools and digital solutions to boost your business.

6.    Is growth part of your business strategy?

Not all businesses are focused on growth, but outlining your key goals around growth is an essential part of your business strategy. Ask yourself whether you want to scale at speed, or grow organically. Or whether you’re happy to be a boutique business that keeps things small.

We’ll help you define your growth goals and build a strategy that aims for success.

7.    Do you have the numbers you need at your fingertips?

So much of what you do as a business is driven by data. But are you getting the overview you need of your important business metrics and key financial numbers? Think about where you need detailed data and metrics, and how this could put you in better control of the company.

We can help you expand your reporting and management information, so you have a better eye on performance, spending, cashflow and sales targets etc.

8.    Have you identified your ideal customer?

Identifying your ideal customer is something every startup and new business should do. But when was the last time you updated your ideal customer outline? Think about who you’re selling to, how this audience has evolved and whether they are still the right customer to target.

We can run detailed customer profiles to help you pinpoint the best customers to target.

9.    Have you thought about where your business will be in five years?

When the business is busy, the temptation is to focus on the now and to put your energy into fighting the most pressing fires. But without a forward-looking focus, you can lack direction. Ask yourself where you want to be in five years and how you plan to achieve these goals.

We’ll help you create a detailed five-year plan, to give your journey more impetus and direction.

10.  Are you planning for your own financial future?

You obviously spend a lot of your time thinking about your business – but how much time have you spent considering your personal financial future? Think about your life goals and how you plan to fund them, and where this money is likely to come from.

We can advise you on wealth planning, tax planning and the advantages of good all-year-round financial management.

Talk to us about running a health check for your business

If these questions have got you thinking about your business efficiency and growth plans, that’s a good thing. If you’d like to take this process further, we’d advise running a detailed health check for your business and your personal finances.

Book a meeting with us to talk through your goals, aspirations, challenges and strategy, so we can help you take the next step in your journey to entrepreneurial success.

Get in touch to book a health check.

The following content was originally published by BOMA. We have updated some of this article for our readers.