Takeover Day Checklist, what you need to be aware of and put in place when buying a business
There is a serious gap in the information market given to newcomers buying a business, especially in the Pub, Restaurant, Bistro, Small Hotel Industry.
Having looked after membership for many years in various parts of the country for the BII, the single comment that was always made, was that no specialist in any field gave them a comprehensive list of the things that they needed to know about or be aware of before buying and taking over a business.
The BII asked me to write a checklist, many years ago, which I did, it was appropriate at the time, but legislation, technology and in some cases threatened litigation has changed dramatically, leaving many honest people chasing a dream, woefully uninformed.
The first six months of buying a business, is and can be a nightmare if you haven’t checked or put a lot of key issues in place, you do have time to make yourself aware of these points before you complete your purchase, takeover day is normally stress laden, business wise and domestically, without a comprehensive checklist.
You might think that all the people that you meet in the course of buying a business, will give you enough information to buy a business and run it, don’t believe it. Many tell you what they want you to know, not what you need to know, much of a good list is common sense with hindsight, sadly common sense goes out of the window with the excitement and stress of buying any new business.
Having talked to many trainers over the years, the one question that I always put to them is “Which day of the month would you buy a business?”. They all said the end of the month, I asked why and none could give me an answer.
This is a vital point in buying any business, always buy at the beginning of the month, if you have a months credit on your major purchases, your first bill arrives the following month and it effectively gives you up to eight weeks credit, which can float a substantial amount of money, improving your cash flow.
If you take over at the end of the month, with new stock you only have four weeks before a major bill comes in.
Setting up accounts can take several weeks, especially when you haven’t been in business before, this can seriously hit your cash flow, if you haven’t got accounts in place and operational.
Commercial Agents are the first point of contact in buying a business, all the people that actually sell businesses that we have spoken to say that a handout link or checklist would enhance their relationship with potential buyers and help enormously, sadly their bosses think otherwise.
Having met a former Chairman of one of the Commercial Property Associations some years ago, he said in an unguarded moment that it was not in their interests to make potential buyers successful, they rely on the failure rate to get more businesses on the market to sell, he’s right but it is morally unacceptable.
Having scanned the Internet for comprehensive Checklists, most relate to the interests of the company producing them, top licensing lawyers have a list licensing issues, which a trainer would cover, none appear to cover almost everything that is needed.
If we can make people buying businesses better informed, we might just stop the failure rate in many cases.
We are not saying that our Checklists cover everything, but they are constantly being updated and consist of seventy plus points with links to more complex issues.
They are free to anyone thinking about or buying a business, they will make them think outside the box, which you need to when you buy a business, running a business is a continual learning curve.
The following link is one of them relating to pubs and restaurants, if you approve please pass the details on to anyone who may benefit, if we can be of any assistance please email firstname.lastname@example.org.