What to Watch for When Buying a Business

buying

There are tons of articles about selling a business. What if you’re buying a business? Here are a few quick suggestions to keep you on the right path.

Valuation
Needless to say, it’s one of the reasons you’re here and reading this. You need to know the value of what you’re buying and whether you’re paying a reasonable price. Find an expert certified in valuation who can help you. More on this here and here. The language of valuation starts with…

Accounting
Many sellers are maximizing tax deductions instead of profits. Many sellers also have terrible bookkeeping. More on these issues here and here. What key accounting metric should you be looking for? Simply stated…

Cash
The business should be generating cash flow and it should be consistent. If it isn’t, should you walk away? Maybe not. Find out why. There are two other elements that will make or break a business and often outweigh everything else…

People and Culture
Good people can take a business to unimaginable heights. One bad person can wreck the entire business. Find out what kind of people and culture you’re considering buying…before you buy it. More on this here. 

The Bottom Line
It can feel a little lonely if you’re thinking about buying a business. Professionals tend to beat a path to sellers, possibly thinking they’ll get a piece of the deal. If you’re buying a business, review these suggestions, take your time, and please ask for help. I’m here if you want to talk.

Thanks,
Josh

Sign up for this blog here and connect with me on LinkedInFacebookTwitter, YouTube and Instagram.  

Can I Help You?
Hi, I’m Josh Horn, CPA/ABV, CVA of Horn Valuation. I help with business valuations in friendly or unfriendly situations. I also help owners build valuable companies. My clients are business owners and attorneys. If you’d like more information, check out my website hornvaluation.com, email me at josh@horncpa.com, or call me at 217-649-8794.

Josh Horn CPA

I’m a licensed Certified Public Accountant (CPA) and double-credentialed in business valuation (CVA & ABV). I’ve been a tax and business consultant in a top 100 CPA firm and a controller in a large international company. I’ve also valued and been the primary advisor to multi-million dollar and small companies in various industries.

“If you’re not working on business value, who is?” Josh Horn, CPA, Certified Valuation Analyst and Accredited in Business Valuation

Don’t Mix Apples and Oranges Valuing a Business

apples

Some really smart people are getting this confused. Are you mixing apples and oranges valuing a business? Find out at the secure link here or YouTube here:

Thanks,
Josh

Sign up for this blog here and connect with me on LinkedInFacebookTwitter, YouTube and Instagram.  

Can I Help You?
Hi, I’m Josh Horn, CPA/ABV, CVA of Horn Valuation. I help with business valuations in friendly or unfriendly situations. I also help owners build valuable companies. My clients are business owners and attorneys. If you’d like more information, check out my website hornvaluation.com, email me at josh@horncpa.com, or call me at 217-649-8794.

Josh Horn CPA

I’m a licensed Certified Public Accountant (CPA) and double-credentialed in business valuation (CVA & ABV). I’ve been a tax and business consultant in a top 100 CPA firm and a controller in a large international company. I’ve also valued and been the primary advisor to multi-million dollar and small companies in various industries.

“If you’re not working on business value, who is?” Josh Horn, CPA, Certified Valuation Analyst and Accredited in Business Valuation

Why I Don’t do Back of the Napkin Valuations

napkin

Have you thought about getting your business valued on the back of a napkin? Here’s why I don’t do “back of the napkin” business valuations for you or your attorney. Secure link here or YouTube here:

Thanks,
Josh

Sign up for this blog here and connect with me on LinkedInFacebookTwitter, YouTube and Instagram.  

Can I Help You?
Hi, I’m Josh Horn, CPA/ABV, CVA of Horn Valuation. I help with business valuations in friendly or unfriendly situations. I also help owners build valuable companies. My clients are business owners and attorneys. If you’d like more information, check out my website hornvaluation.com, email me at josh@horncpa.com, or call me at 217-649-8794.

Josh Horn CPA

I’m a licensed Certified Public Accountant (CPA) and double-credentialed in business valuation (CVA & ABV). I’ve been a tax and business consultant in a top 100 CPA firm and a controller in a large international company. I’ve also valued and been the primary advisor to multi-million dollar and small companies in various industries.

“If you’re not working on business value, who is?” Josh Horn, CPA, Certified Valuation Analyst and Accredited in Business Valuation

Is Your Business Ready for the Unthinkable?

unthinkable

Are you ready for the unthinkable? Is your business protected from the four D’s?
     -> Death?
     -> Disability?
     -> Dispute?
     -> Divorce?
I reviewed my last five business valuation engagements. Four had no buy-sell agreement. The one was so poorly constructed and outdated, it would likely do as much harm as good. This is an uncomfortable topic for many owners, and I’m about to make it more uncomfortable.

Reality Check
Taking risks may be the reason you have a profitable business. You’re more aggressive and competitive than others but here’s the reality – you will die. Denying it puts your loved ones in an even more miserable place than they could be with your help while you’re topside. Don’t let your “edge” override common sense. 

Why Does this Matter?
When owners die without a plan, I’ve seen the business sit in limbo, get stuck with surviving spouse and child “partners”, and flat-out die itself. Fights are common when livelihoods are at stake and emotions tend to take over. It may not matter that Joe or Sally thinks the business is worth 5X what it’s really worth. You never bothered to get a buy-sell agreement and an annual business valuation. In a court of law where the best negotiator often wins, their off-the-wall opinion may carry the day to the detriment of your family. 

What about the other Three D’s?
If you manage to be the first business owner to dodge death, you’re still not out of the woods. What if you get hurt…physically…mentally? Will you be able to run the business in a disabled state? Unlikely. How’s your relationship with your partner? Hot and cold? What if they turn to you out of the blue and say, “I want out!” How’s your marriage or your business partner’s marriage? If things get bad, what agreement do you have that will clarify your options, and the value of your business? Are you prepared for requests from attorneys to take over your day? Where’s that put your business? 

What’s the Fix?
Imagine the grim reaper came to visit you today…with one twist. He said, “I’m going to give you until the end of the week to get your business ready for your permanent departure. If you care about your family, co-owners, and employees, fix it now and I won’t come back. If you don’t, you’ll be coming with me next week.”

This is how we should treat every day anyway. If you knew you only had one week to protect your family and build your legacy, what would you do today? Give me a call if you have questions about protecting your business with a buy-sell agreement. I’m happy to recommend attorneys who can help and give advice on pitfalls. Don’t wait another day. 

Thanks,
Josh

Sign up for this blog here and connect with me on LinkedInFacebookTwitter, YouTube, and Instagram.   

Can I Help You?
Hi, I’m Josh Horn, CPA/ABV, CVA of Horn Valuation. I help with business valuations in friendly or unfriendly situations. I also help owners build valuable companies. My clients are business owners and attorneys. If you’d like more information, check out my website hornvaluation.com, email me at josh@horncpa.com, or call me at 217-649-8794.

Josh Horn CPA

I’m a licensed Certified Public Accountant (CPA) and double-credentialed in business valuation (CVA & ABV). I’ve been a tax and business consultant in a top 100 CPA firm and a controller in a large international company. I’ve also valued and been the primary advisor to multi-million dollar and small companies in various industries.

“If you’re not working on business value, who is?” Josh Horn, CPA, Certified Valuation Analyst and Accredited in Business Valuation

When an Asset is really a Liability

asset

How can your business show an asset that’s really a liability? Pretty easily as it turns out. Secure link here or YouTube here:

Thanks,
Josh

Sign up for this blog here and connect with me on LinkedInFacebookTwitter, and YouTube.

Can I Help You?
Hi, I’m Josh Horn, CPA/ABV, CVA of Horn Valuation. I help with business valuations in friendly or unfriendly situations. I also help owners build valuable companies. My clients are business owners and attorneys. If you’d like more information, check out my website hornvaluation.com, email me at josh@horncpa.com, or call me at 217-649-8794.

Josh Horn CPA

I’m a licensed Certified Public Accountant (CPA) and double-credentialed in business valuation (CVA & ABV). I’ve been a tax and business consultant in a top 100 CPA firm and a controller in a large international company. I’ve also valued and been the primary advisor to multi-million dollar and small companies in various industries.

“If you’re not working on business value, who is?” Josh Horn, CPA, Certified Valuation Analyst and Accredited in Business Valuation