When business is booming and you’re looking for ways to expand, you might consider acquiring another company. It’s a great way to reduce the competition and increase your market share or, in some cases, it can be a great way to expand your reach and move into a new market area. If you get it right, it can really push your business forward and help you reach that next step. However, acquiring another business is no easy feat and there are a lot of things that can go wrong along the way, so it’s vital that you know what you’re doing before you go in. These are some of the most important tips for buying a CPA practice that you need to remember if you’re going to acquire another company successfully.
Research And Due Diligence
You don’t want to buy a company that isn’t in a good financial position or one that has been involved in illegal business practices because that reflects badly on you, which is why it’s so important that you do your research and due diligence. You need to look over their financial statements, and contracts and leases that they hold, all of their tax returns, and any other important documents relating to the business. Managing all of that documentation is a struggle but you can make it a lot quicker and easier if you use a smart room for m&a service. It gives you a virtual data room to store all of the documents which you can access and review easily using simple software. It’s far easier to do it using a virtual data room than it is to do it manually so you can get on with closing the deal if everything is in order.
Secure The Digital Rights
This is something that a lot of people forget and it can be disastrous. You need to make sure that you include all of the digital rights like passwords to accounts and computers, web domains, and social media accounts in your contract. If you don’t, the previous owner of the company will still hold the rights to those things and they could be used against your new business. Always double check the contracts before signing and ensure that you have all of the digital rights that you will need to run the business.
Don’t Neglect Existing Customers
When you take over a business, you’re inevitably going to do something new with it and take it in your own direction, however, it’s important that you don’t neglect the existing customers. If you take a large business with high overheads and then alienate all of the customers, you’re not going to be able to keep that business afloat for very long at all. You need to respect the existing customers and the product lines that are doing well and try not to change them too much. You can still introduce new products of your own but don’t scrap all of the old ones in the process. You should also send an email out to all existing customers explaining the transition and reassuring them that you still value them as customers.
It’s going to be a long and difficult road but acquiring another company can be incredibly profitable if you get it right.