Buying a business
Due diligence, done by a specialist.
We arrange the finance and prepare the lender file. Financial due diligence is a separate job, and for that we introduce buyers to Kate Groom, business adviser and franchise specialist and co-founder of Franchise Accounting & Tax.
What it covers
The vendor’s accounts are a claim, not a fact. Financial due diligence tests that claim against records the vendor cannot easily shape, before you agree a price.
- Revenue reconciled to BAS lodgements, bank deposits and the ledger
- Every add-back the vendor has claimed, tested against evidence
- Owner remuneration and related-party arrangements unwound
- A normalised earnings figure, with each adjustment explained
- Working capital, and what the completion adjustment should be
- Findings written so a lender can rely on them, where the deal needs it
Who you will speak to
Kate is a Sydney business adviser and co-founder of Franchise Accounting & Tax and The Franchise Accountants Network. She works with small business owners on their numbers, and is especially useful if the business you are buying is a franchise.
Who does what
- 1Financial due diligenceKate Groom: the earnings, add-backs and working capital, tested.
- 2Tax and structureYour accountant: assets or shares, the buying entity, duty and GST. Settle it before the contract is drafted.
- 3LegalA commercial solicitor who does acquisitions: the contract, warranties, lease assignment and restraints.
- 4FinanceUs: what the deal will borrow, the lender file and the facility, sized on the tested earnings.
A short discussion about the business you are looking at, what diligence it needs, and what it will cost.
Due diligence is provided by Kate Groom, not by Levelhead Business Advisors, and is engaged and paid for separately. We receive no referral fee or other benefit for the introduction.