New business series - ask the experts

Over the past few weeks, we’ve been running a series of blogs for people thinking about buying a new business or striking out on their own. Our business strategist Barry Mosely has discussed the questions to ask before embarking on a new venture, as well as covering experience and capability and adequate capital.

Over the past few weeks, we’ve been running a series of blogs for people thinking about buying a new business or striking out on their own.  Our business strategist Barry Mosely has discussed the questions to ask before embarking on a new venture, as well as covering experience and capability and adequate capital.

This blog, is the last of the series and is about the importance of surrounding yourself with a team of trusted partners and professionals.

professionalsA mistake often made when looking at an opportunity to go into business, is to take short cuts or not seek adequate advice before making a commitment to the project.

Another mistake often made is to get “independent advice” from a friend or family member. But how independent is this advice and what experience do these friends and family have?  It is quite possible they have been in business previously but this does not qualify them to advise you on what potentially could be one of the most significant decisions in your life. By all means, talk to friends and family and gain some insight from their experience, but advice from an independent professional will give you a true, unbiased perspective.

The right advisors can provide you with legal advice that fully assesses the liabilities and risks associated with the business contract. This should be done simultaneously with your accountant to independently run the numbers on the business and prepare thorough budgets and forecasts, using actual data if possible.  The forecasts should be fully integrated running through to a profit and loss and balance sheet, so that you can see the full impact of the trading result down to tax, and the impact on the balance sheet.

This should also be sensitised to look at different scenarios.

Talk to the team at Winstanley Kerridge if you're thinking about buying an existing business, or starting out on your own.

Would the business still be viable if revenue dropped by 15% and the costs rose by 5%?  What would you do to counter it?  Would the business provide you with a level of income adequate to compensate for your time, and the risk you are entering into?

How would you monitor progress to ensure you were reacting to the issues or opportunities in a timely manner?

The cost of robust professional services is not insignificant, but they should be seen as an investment in the business, and scrimping on costs at the outset could have serious long term consequences.

Should you be considering a business opportunity please contact our business strategist or one of the directors of Winstanley Kerridge Chartered Accountants who can assist you to analyse the proposal.