Buying a business

kingarhu

My boss has offered me the chance to buy the business (or take redundancy!), but I have no idea how much to offer. I have full access to the company accounts, but can anybody give any advice on what I should base any offer on?

Pennywise

You must go and see an accountant. You need a proper valuation of the business and you also need them to do "due diligence" which is a process to prove that there's no skeletons in the cupboard - how can you be sure that you aren't taking on some hidden liabilities such as VAT bills, leases etc?

mr_jetlag

Just as with an individual net worth = assets + cash - liabilities. If you have full access to the company's accounts wouold you also know about any off balance sheet shenanigans, any personal loans against the company's assets, all that crap that larger PLCs pull...?

If you're not 101% sure or have a good relationship with your boss frankly I'd say no.

Primrose

Yes, you definitely need to get some good solid advice from an accountant. The fact that you are facing redundancy is a pretty obvious sign that the business isn't doing well at the moment and you could end up putting in all your money and then find it goes broke. Being an employee in a business is a vastly different role from being its owner. You don't say what kind of a business it is but if you don't have the business administration skills to make the transition from one role to another you could well struggle to keep it afloat in such difficult economic circumstances, even if you can find the funds to purchase it.

jonesMUFCforever

Can you tell us what sort of business it is?
I would consider taking redundancy and set up by myself for free rather than buy a business.