Wood and Disney, helping you make the right decisions

Buying a business

Buying a business takes time. It is a marathon not a sprint. It often takes many months and takes determination to continue when it seems easier to give up. The advice and support of professionally qualified chartered accountants like Wood and Disney is essential if you are to be sure that:

• The accounts and financials reflect accurately the financial position of the business
• You are paying the right price for the business
• The purchase is tax efficient
• The contracts are legally binding and protect your position
• The new business is integrated into your current business financial systems

Do the accounts and financials reflect accurately the financial position of the business?

Wood and Disney, as the accountant for the purchaser, are there to dissect and uncover a targets true financials. We review the target’s accounting software for accuracy and appropriateness. We analyse profit margins, find any skeletons hidden in cupboards, find undisclosed liabilities or overstated assets and assess potential financial risks.

Are you paying the right price for the business?

Wood and Disney can determine the right price to pay for a business by using our valuation skills utilising various methods to estimate a targets real worth. We help you negotiate from a position of real knowledge and avoid overpaying and sometimes avoid buying altogether when we discover that it is a glossy brochure with no substance underneath. We have dissuaded more clients from buying businesses than helping them to buy as there are a lot of very poor businesses which would give our clients more headaches and liabilities than opportunities. Sometimes the same business comes up with different buyers looking at it and having done the due diligence once we can fast track rejection by subsequent would be purchasers saving them a lot of time and money.

Is the purchase tax efficient?

Taxation can add to a cost of an acquisition so Wood and Disney can advise on the implications of different acquisition structures such as buying the shares in a target or just buying the Goodwill and assets out of the business.

Are the contracts are legally binding and protect your position?

Wood and Disney work with your lawyer to help you achieve your goal with the minimum risk.

After the purchase, the new business needs to be integrated into your current business financial systems

Once acquired Wood and Disney set up systems to integrate your purchase with your existing business ensuring smooth financial reporting, systems reviews to select which system is best moving forward and integrating the two sets of data, and of course tax compliance.

Selling your business

Sadly most business owners overvalue their businesses. They may have spent decades building their business up and often see it as their pension fund. It may have given them a reasonable living but a purchaser is looking for a profit probably using a management team rather than work in the business themselves. What may have been a decent living for you is no where near large enough to attract a purchaser or investor. Most businesses NEVER sell and those that do will often sell for half what the owners thought they were worth.

With this sorry background what can Wood and Disney, as your accountant, do to help.

Preparing to sell

Firstly, Wood and Disney can help you prepare for a sale. You cannot start the preparation process and hope to sell in under 12 months. It doesn’t work that way. Purchasers will be looking for decent profits over the 3 previous years so you need to take that length of time to prepare for a sale. Your business is like a gemstone which needs polishing. It takes time. It takes scrutiny. It takes care. We would need to meticulously review and refine your record keeping ensuring completeness and accuracy. We would be looking to reduce unneeded costs and remove any extravagances or directors’ personal costs. Does your plumbing business really need both a pickup truck and a van when you are the only driver?

Valuing your business

Wood and Disney then apply our valuation skills over the three year period to ensure that your valuation increases every year.

Optimising your tax position

What is the best way to sell a business and pay the minimum level of tax legally allowed? Again selling your business in the wrong way will lead to higher tax bills. Wood and Disney ensure that your business is sold in a manner to minimise the tax you will have to pay on the sale.

Standing by your side during the sales process

Wood and Disney will be by your side during the sales process, your defence against the questioning of the purchaser’s accountants who will be looking for ways to reduce how much their client is paying. During the sale we are there to counter any excuses why the price should be reduced.

Merging your business

Merging your business with another can be a complex process, but it can also be a great way to achieve growth, expand your market, and reduce overheads boosting profitability. Before you go ahead, there are 3 phases to a merger which Wood and Disney have experience and a structured system to advise and support you through:

1. Pre-Merger phase - making sure you choose the right partner business and that the merger is beneficial.
2. Merger phase - ensuring the businesses merge smoothly, integrating systems and optimising operations.
3. Post-Merger phase - the new business becomes a single entity with financial reporting structures, compliance and performance monitoring systems all in place and operational.

Pre-Merger Phase

This is perhaps the most important phase and absolutely essential to get right. At this stage you haven't incurred any significant costs or commitments and you can still back out. Wood and Disney help you make sure that the deal is with the right partner business and will be good for your business. We also ensure in conjunction with your legal representatives, that your interests are protected. Below are some of the most important areas that Wood and Disney carry out at this stage:

• Due Diligence: Wood and Disney meticulously analyse both companies' financials, identifying potential risks, hidden liabilities, and areas of synergy. This information informs the valuation process and sets realistic expectations for both parties.

• Valuation Expertise: Your accountant determine the fair market value of each company using various methods, ensuring an equitable exchange in the merger. This protects both businesses and prevents resentment down the line.

• Tax Optimisation: Mergers can have complex tax implications.Wood and Disney explore different merger structures and advises on the most tax-efficient approach, minimising the overall tax burden and maximising post-merger profitability.

• Financial Modelling: Wood and Disney build financial models to forecast the combined entity's future performance, assess potential cost savings, and identify integration challenges. This data-driven approach helps make informed decisions and mitigate risks.

Merger Phase:

This is a busy time. The decision has been made to merge businesses, now those plans must be put into action!  Wood and Disney ...

• Accounting System Integration: Combining two accounting systems is no small feat. Wood and Disney guide the process, ensuring smooth data migration, standardised reporting practices, and compliance with accounting regulations.

• Internal Controls: Wood and Disney review and streamline internal controls across the merged businesses, identifying vulnerabilities and implementing strategies to mitigate fraud and financial mismanagement.

• Cost Analysis and Optimisation: Wood and Disney identify opportunities for cost savings, such as streamlining operations, eliminating redundancies, and renegotiating contracts. This maximises value and boosts the merged businesses' profitability.

Post-Merger Phase:

• Performance Monitoring: Wood and Disney track the merged businesses' financial performance against previously established metrics, identifying deviations and recommending corrective actions. This ensures the merger remains on track to achieve its goals.

• Regulatory Compliance: Wood and Disney keep you updated on relevant regulations and reporting requirements, ensuring the merged businesses adhere to all financial and tax regulations.

• Reporting and Analysis: Wood and Disney prepare consolidated financial statements and provides insightful reports that paint a clear picture of the merged businesses' financial health and performance. This enables informed decision-making and strategic planning.