Читать книгу Small Business for Dummies - Veechi Curtis - Страница 67

When you’re looking at buying a business, the term goodwill is one you’ll hear frequently. Specifically, goodwill represents the difference between the purchase price and the combined value of all of the physical assets of the business. The elements that make up goodwill consist of aspects such as the reputation of the business, its loyal customers, its brand identity, its systems, and possibly its staff or any proprietary technology.

The purchase price of a business includes not just goodwill, but also assets such as equipment, furniture, inventory and, in some cases, debtors. In other words, the purchase price of a cafe includes not just the goodwill but the tables, chairs and crockery also, or the purchase of an accounting practice includes not just goodwill but also computers, software, desks and debtors.

When looking at a business that’s for sale, ask the seller to break down the purchase price into the individual components and, as soon as this breakdown is in place, home in on the details:

  Are you paying for any assets you don’t need? If an item is unnecessary or obsolete, don’t cough up a cent for it. (Ask for a copy of the depreciation schedule: The written-down value shown on this schedule usually provides a chillingly realistic second opinion on item values.)

 Does the purchase price include debtors? If so, clarify what will occur if a customer is slow to pay, or does not pay at all.

 Find out if any of the assets are currently under lease, and consider whether or not you will want to take over these leases.

With this process complete, turn your attention to stock (if that’s relevant for this business). Don’t agree to pay for stock at valuation (otherwise known as SAV), without first nutting out how this valuation is going to be made:

 In the contract, place a ceiling value on stock so that you don’t end up paying for a whole load of unwanted deliveries.

  State in the contract that the stock has to be good, usable, current stock. If a stock item is unlikely to sell within six months, based on current sales trends, refuse to pay for it. The last thing you want is a warehouse full of obsolete stock.

 If a disagreement about the value of stock is a possibility, employ a registered valuer.

 Agree on a valuation method for stock. This could be the last price paid or the average price paid, and may or may not include the cost of freight.

  Ask for supplier invoices to verify the wholesale cost of stock and the date the stock was supplied. (Any stock bought more than a year ago is likely to be obsolete or overpriced.)