In this episode of the Sky Accountants Podcast, join host Ashley Carmichael and guest expert Michael Ferris from Probooks Accounting as they delve into the intricate process of purchasing a business.
This insightful discussion is a comprehensive guide for anyone considering or actively pursuing business acquisitions.
Michael, with extensive experience in successful acquisitions within the Australian SME market, shares invaluable insights, covering crucial aspects from initial considerations and identifying potential targets to negotiation strategies, due diligence, legalities, and post-acquisition management.
Tune in as they navigate through each step, offering practical advice and highlighting essential tips for a successful business acquisition journey.
Connect with Michael on LinkedIn or learn more about Probooks Accounting by exploring their website.
ABOUT SKY ACCOUNTANTS PODCAST:
A Podcast focusing on the issues that affect business owners in Australia.
From the latest tax changes, to finance and developments in employment law and HR, the Sky team bring you all the latest on the most topical issues that Australian business owners need to be across.
In this episode of the Sky Accountants Podcast, join host Ashley Carmichael and guest expert Michael Ferris from Probooks Accounting as they delve into the intricate process of purchasing a business.
This insightful discussion is a comprehensive guide for anyone considering or actively pursuing business acquisitions.
Michael, with extensive experience in successful acquisitions within the Australian SME market, shares invaluable insights, covering crucial aspects from initial considerations and identifying potential targets to negotiation strategies, due diligence, legalities, and post-acquisition management.
Tune in as they navigate through each step, offering practical advice and highlighting essential tips for a successful business acquisition journey.
Connect with Michael on LinkedIn or learn more about Probooks Accounting by exploring their website.
ABOUT SKY ACCOUNTANTS PODCAST:
A Podcast focusing on the issues that affect business owners in Australia.
From the latest tax changes, to finance and developments in employment law and HR, the Sky team bring you all the latest on the most topical issues that Australian business owners need to be across.
welcome to another episode of the Sky Accounts podcast I'm your host Ashley Carmichael director and client manager here at sky and today um we're talking all things buying businesses um and to do that I have with me Michael Paris from Pro Books Accounting um Mick welcome um Mick's got Mick's got a wealth of experience in helping um small and medium enterprises to acquire um businesses in the Aussie market and really glad that you could join us today to share a bit of your knowledge make oh thanks ash and thanks for having me um yeah there's certainly lots of great opportunities out there for those that are looking to get started in business and all those who are looking to grow their existing business by acquisition yeah that that's great so Mick you've been around the block few times um tell me you know um someone's looking to buy business how do they set a zero in on that business and and execute that deal yeah so there's a few ways that you can turn up acquisition targets if I can put it that way um the secret is really to cast a wide net uh rather than focusing narrowly so um before I get into that though it's really important for you to do a bit of self reflection and assess your skills um your interests your financial capacity those types of things before you before you decide on the opportunities that you that you wanna pursue um yeah do you have the know how um about how to run the business successfully are you looking in industry that's healthy and has good future prospects can you afford the investment without taking too much risk that's a big one um yeah it's often quite attractive isn't it people think of you know business is gonna make me so but uh you know if they bite off a bit too much uh or more than they can chew in the first instance that can be a really big risk uh sometimes quite detrimental so um yeah and thinking about um can you afford the investment have you engaged with your lender or your bank to see whether you can uh borrow some money to get into the business in the first place so um and then another important thing is you know do you wanna be active in the business or take a more passive role yeah yeah right yeah well come you know I know I've seen my fair share and I'm sure you have too you know those people who do sort of buy it off a bit more than they can chew you know take on a business that I don't have the skill set for and uh you know becomes a bit of sink and swim sink or swim and sometimes they sink um which is unfortunate but um so that's true you know they've they've done that introspection as he as he said Mick and and they've um formed a bit of an idea about what they're looking for um how do they find it yeah so you know we live in a uh a very digital world these days so often the first place is jump on the internet and you know Google businesses for sale potentially um but yeah generally you know get out there and have a look around and see what you can find that could be um available so um you know there's plenty of business brokers out there who are you know their businesses moving businesses from one owner to another so they're gonna have some pretty decent marketing and advertising that's readily available so you know search up some local business brokers or even Australia wide depending on what business you're after um and check out their websites and see what's available there um and then you know if you find one or two or more that you that seem to have some businesses that you know might fit the Bill for you um you can consider getting in touch with them and getting on their book so to speak um so yeah once they know what you're looking for uh then they can uh keep an eye an eye out and keep their ears open and if they see something that sort of fits the Bill for you then they can um contact you and let you know um yeah look I found that you know they're in the business they're selling businesses and you know they're they're quite happy to have people on their books it um makes their job easier yeah exactly um you can it can also be useful to register your interest with insolvency practitioners yeah liquidators um they're often on the lookout for buyers to buy businesses who um yeah might be failing not through uh the business itself being bad but through other circumstances and and influences so uh sometimes that can be a good way to get hold of uh a bargain in some cases so uh little bit uh left of centre approach I suppose but yeah definitely one worth considering hmm yeah absolutely another time monitored approach is you know to research potential businesses that are not on the market um you might have heard the saying that everything's for sale for a price yeah you know sometimes you can be lucky you know you make the right offer at the right time to a particular business owner and you never know what could happen so you know you can contact them directly or you can contact them through an agent um you know you might better get someone to act on your behalf if you you would rather not deal directly and just express your interest in potentially acquiring their business so yeah I don't think there's any uh set rules around that it's uh about conveying your interest to the to the potential vendor and uh seeing what their appetite is to sell yeah look I'm I'm a fan of that approach I think you know that old saying there's no harm in asking um and I like it because it's really deliberate you know you you're assisting businesses that that really fit the profile that you want and and they're the ones that you're targeting and rather than just sort of having what's available you you going after what you want that's right exactly and you know um that approaches is often a slow approach but it can be quite good because um you know if you contact a business owner they might not be ready to sell right now but anything could happen down the track you know they could have some family circumstances which means it'd be great for them to get out of the business or now they might wake up one day and go you know what I've had enough and oh that's right you know that person contacted me some time ago I wonder if they're still interested I'll get in touch yeah yeah oh yeah definitely worth a look so um you know I'm in the market looking for business I found something that I'm quite interested in what next yeah so yeah that's right so you really start need you need to start doing some uh analysis around this particular business um so you need to get your hands on some data and and start saying whether it is a good prospect um and if so what the deal might look like um from your perspective you know um often the vendor will have some information prepared um you know some sort of memorandum of data or you know there could be a um a Section 52 you know potentially for sitting with a real estate agent currently so there'll be some financial reports already prepared if the vendors you know already actively trying to sell um and that'll just be your starting point to really get a gauge um of the financial performance I guess and and position of the business um yeah in in regards to that Section 52 sometimes there can be some other information about you know the business locations the hours of operation that type of thing it will just give you sort of a high level um understanding of how the business actually operates day to day um and then you can request additional information and ask some questions but um you don't have to get too carried away in that first instance you know don't get too granular um there's plenty of time for that later on in the process yeah yeah it's good to ask questions but you know we're not we don't know need to know what colour underpants they wear at this girl ha ha ha part in the process so um to let me sort of make sure I've got um my head clear on what you've been telling me so you know this part of the process it's really about forming a picture about what that business really looks like isn't it yeah that's right um the objective is to get clarity around how the business operates uh the key people the customers uh work at how the numbers fit together and get an understanding of the economic engine that drives the business um you can't even begin to contemplate making an offer until you you really know what you're looking at and you've assessed it against your own criteria about what's gonna work for you hmm yeah alright so let's assume that we've done that analysis and the business that we're looking at it seems to be ticking all the right boxes what's the next step so um we've just discussed that um you know you need to get that data to um help you into formula into the position to formulate an offer um if you got a clear picture on the risk and return profile of the business you can make an assessment of the price and what you're prepared to offer in the key terms and so this sort of gets to a point that that often comes out which is we get asked you know do I need to have the business valued yeah that's a good yeah it's a good point um it's a bit of a misconception isn't I'm sure you've you would have seen it in your experience as well um when there's really no specific need to get a valuer involved at this point in time um but a definition of market value that I was told you know many years ago was that the market value is um the price that two uh parties with no urgency and no influence are prepared to settle on for a deal so you know you could have three valuations come in and um neither of them actually hit the Mark because that's not the final price that gets settled on so you know at this early stage there's probably not a lot of point in and you as the purchaser engaging any sort of like a valuer to do the work maybe the vendors already done that and that's how they've arrived at their asking price potentially but ultimately you're only gonna pay what you're comfortable with so um in my view you could probably save your pennies there and do some of your own homework look at it's a bit of a challenging one I find it that you know there's that old saying that time kills deals and and getting valuations prepared is generally a time consuming process um but there's also the element of you know are you actually going to have access to the all of the information you need for a valuer to do their work and the answer that is probably no at this point um but there is you know depending on I think your level of experience um particularly with the an industry or a type of business you there may be benefit from talking um with a valuer to leverage their knowledge um without actually having a valuation prepared or at least not at that point yeah exactly I mean that's their bread and butter again isn't it so they'll have lots of thoughts um particularly if they're an industry specific value it you know they might have some really good insights that you can um take away from that discussion as well so um yeah in the absence of going to a valuer uh normally you go to your accountant as the first port of call um because you know if there is a need for a valuer um people like selfish we've got a network of people we can put you in touch with if need be uh but otherwise we can certainly help you get the ball rolling in terms of establishing what the business might actually be worth and what it might be worth to you um and you know there's there's a myriad of valuation techniques out there and there's some that are that industry specific you know like uh the accounting industry for example that's right that's a bit interesting the way we we value all the the industry values accounting businesses isn't it that's right yeah so you know typically we're based on a multiple of the top line revenue you know could be 90 cents in a dollar a dollar ten um per dollar a fees for example at this point in time but yeah every industry is different hmm alright so we've uh we've sat down we've done our homework we think we know what that business is worth um and we're keen to make an offer Mick what do we do ha ha there's a couple of things to to keep in mind um and the first is that the price is is just one element that needs to be considered when making an offer so uh beyond that you need to consider um whether the deal should involve some sort of deferred consideration um or an earnout uh potentially um deferred consideration is really about protecting the downside risk um and the earnout is more about bridging the gap between a business's uh present value and it's future value that may be achieved um if it's on or when it's on a rapid growth trajectory for example so um then there's a the consideration about whether there needs to be a handover period from the vendor and any other conditions that may be needed to ensure a a smooth transition yeah it's a bit of there is an element of making sure that what the business looks like now is what it is going to look like on the other side of the deal with the um the vendor stepping away isn't there yeah that's right you know particularly when there's um client relationships involve for example you know it might be simple as flicking a switch and uh you know the customer or client turns up to see a new face the next day um often uh that's one of those examples you mentioned right at the start ash where it can go south quite quickly well the other the other biggie that I've come across is where they've got um customer contracts and you know as is normally the case for when these are done professionally there's clauses in there that talk about you know you have to notify the customer if there's a change in in control or ownership of the business and and I say often these deals that that get done have dependent on um having all of those contracts that are cemented to move forward yeah exactly yep and you know we might be skipping ahead a little bit but that could be part of your due diligence as well um so it's a it can be quite common where the owner once they get to a point where they can sniff an exit you know they're gonna get it an offer that they're gonna take and they can see the light at the end of the tunnel so to speak for getting out then sometimes they just bolt towards that and kind of forget some of the other details so getting a bit ahead of myself so couple of other things that we need to consider of course is finance um and you know is there any other um conditional elements of the deal uh that could be subject to the due diligence process um need to be clear about whether it's a share sale versus an asset sale little bit of accountant speak there ash we can get carried away in that in that language but ha ha yeah you know in simple terms are you buying the business or are you buying the Vendell's company and they're two very different things um with different price tags and different risks and all sorts of things there yeah yeah exactly and you know that can then affect the the price from the point of view that it changes the risk profile you know if you just buying the assets and that's far less riskier than than buying the uh the whole company for example of the of the current business owners so um yeah and it look above all else it's really this part of the process and the whole process in itself until you agree is gonna be a negotiation so um you need to you know for those that are inexperienced you need to uh make sure you've studied up on your negotiation strategies um and you could also consider getting someone else involved you know who has that experience to to help you through that part of the process yeah that's right you know like and it's a bit to knowing your strength and weaknesses um you know some people they just struggle with negotiation it's not something that they're comfortable doing and so it's often good for them to have someone to support them and you know you can even sort of do a bit of a good cop bad cop routine um but um you know one thing I think is you know that needs to be kept in mind is that 99 times in 100 you're going to have to have a haggle ha ha ha and so just be ready for it yep exactly um yeah so you know as you said ash the negotiation um technique is is uh very important that inevitable haggle is gonna come up um but yeah I mean the negotiation strategy technique itself is not something we can delve into today it's a bit of a fine art isn't it like you said you might choose to get someone who's a bit of an expert in that a lot outside it's a bit of an art and the sides have and I certainly like if you go to have a look on book type here and that sort of stuff this a load of different books all about the you know the best way to negotiate deals and that sort of stuff it's um you know there there really is a lot to it and you can't underestimate how much having some good skills or support in that area is gonna influence the outcome yeah and yeah it's important to remember that you negotiating in good faith towards a win win deal I mean ultimately that's the only way the deal is gonna go ahead is if it's win win yeah you do have to keep that in mind don't you like you know everyone wants to get a good deal who doesn't right but you know in a sailor business scenario in some shape or form you're going to be reliant on the vendor supporting that style of business going through and so you know if you get one over them you might find that it pays you back in spades on the other side of the deal while you're trying to transition that business that's it yeah yeah and um I I guess the other thing as well like you know people get really invested in the process and it and it's quite understandable like you and you found this business you really wanna go ahead with it and um it it can be tough to do but you've gotta know your limits and be prepared to walk away that's it exactly um yeah remember Kenny Rogers you gotta know when to hold him know when to fold him and know when to walk away and know when to run yeah spot on and um I'm sure you've probably told a few clients to run from time to time ash you know when the deal is just you know just not what they believe it is to be is going to be oh look it's um you know it can get quite protected than the negotiation and um yeah that sort of you know you invest a lot of time and money in it and it really puts a bit of pressure on you to to wanna make it happen but sometimes you know pulling all the stops out of making it happen is the worst thing you could possibly do cause that's it and you know that that's where uh being an unemotional accountant can sometimes be a saviour for some of our clients you know who as you said you get so invested in it the emotions start to come into it then all of a sudden the the business sense gets clouded and um yeah sometimes when you know when to run we'll we'll avoid a catastrophe yeah alright so we played our cards right you know continuing the Kenny Rogers pun but that's it we played our cards right and we've struck an agreement with the with the vendor um everyone's happy to go forwards what's our next step yes at that point it's um really important to get the the key terms of the deal documented and that can sometimes be referred to um as a heads of agreement and so that's really you know the high level the high level understanding um you know if there's any indoor finance that type of stuff in there the prize just the big rocks the big the big bitch you've agreed on the big things now we're gonna start stepping into the next part of the process and um yeah really reaching agreement on some of the finer the finer points to the deal so um the main thing is getting that heads of agreement done written and signed by both parties uh before you really invest any more time in this process yeah so that that's really about making sure that everyone um is is very much on the same page about what to be agreed to through that negotiation process isn't it yeah that's right and it gives everyone the confidence to go forward um because yeah we've got that there if if somebody's somebody gets a little bit off track we can always refer back to that and say hey this is what we agreed on is this next step gonna be following what we've agreed on or are we starting to deviate a bit which could materially change the whole deal and um you know deals can still fall over after heads of agreement stage can't they ash God they can fall over at any stage yeah that's right but um and I like it yeah having the heads of a grey metal the term shape whatever you wanna call it um you know it's really helpful and I if everyone side that's not legally binding of course but um it makes it hard for any party to start trying to change the rules of the game once they're being agreed to so and they help the lawyers too don't they you know we need proper contracts that are legally binding um and it's gonna make the lawyers job a lot easier if they've got that term sheet or heads of agreement yeah absolutely and one of the things that you know these processes can really consume a lot of his time both of the purchaser and the van door so you know you've already done all the towing and throwing to get to this point so let's document it and uh get it on paper and then you know the vendor on the purchase that don't have to regurgitate that to each of their solicitors or lawyers it's you know a copy of the heads of agreement to each party um just to just to review and then obviously one party will be responsible for drafting the contracts um and you know that's as you said based solely on the heads of agreement and so look we're we're sort of getting to the the next part which is that you know we do have the the term shade the heads of agreement squared away um we've got some more things to do now don't we instead of never ending yeah that's right just when you think the work's done oh my camera's getting a little bit confused there we go um yeah so you know there's some more important things that we need to consider which is the due diligence um the financing the legals and the contracts and the structuring so we sort of touched on each of those in some capacity so far but you know financing you've obviously you'll have talked to your bank you know to see whether you're in the ballpark now you've got the heads of agreement um even that in itself can can help start the next part of the conversation with the bank cause they know what the price is and they know what the terms are yeah yeah so look obviously there's there's a lot involved in those four areas it mentioned there make but um and we don't have time to sort of go through that they're probably all at you know a podcast in and of them themselves really but can you just at a high level take us through what's involved in each one so say due to alligence to kick off with yeah sure so the due diligence is really a process of verifying the information that's been provided to you by the vendor um and that's informed the deal that's been negotiated um particularly from your side you've got a certain understanding of how the business operates for example who the key people are are they staying are they going all that sort of stuff um and it's really yeah the due diligence is to give you the highest possible level of confidence um that you're buying what you think you're buying in a nutshell ha ha yeah yeah and look it it's not just the being count as that like us that get involved it it's beyond accounts isn't it yeah that's right so we need to get everyone involved in various elements and aspects of it so finance people lawyers um existing operations team potentially if we're you know buying for growth um and you know we need to make sure that everybody uh who has to put a signature somewhere on this deal is happy with with what's um yeah just make sure everything's in order yeah things like you know are the financial statements we looked at accurate does the business actually own the assets that we we think it does um and I and I guess there's also and it depends on sort of parking back to what we were talking about whether we're buying the company or the business um and I particularly there but you know are there skeletons in in cupboards are there risks and yep looking at um employment contracts of existing employees and are those conditions um being carried over you know to you the purchaser to make sure that those those staff are keen on hanging around um yeah so there's a lot to it have they been paid right you know like you don't wanna take on staff that are not being paid award rates or ha ha you know that sort of stuff exactly yeah and you know it could be a really uh extreme example as the vendor says yeah everyone's on award rates but when you get into due diligence they're all paid 10 bucks an hour over reward and all of a sudden you come in expecting to pay a ward and they all leave cause they're not getting what they used to get hmm yeah oh look you can and I have that sort of stuff up you know I've seen a lot over the years as I'm sure you have and it can even just be things like environmental um elements around the business like you know I can remember why many years ago that involved service station and and we ended up getting some environmental consultants in because of you know the potential liability you know there was you know diesel spilling out of the underground tanks that we didn't know about we're going to you know ultimately take responsibility for yep for sure hmm just one other common one two ashes um lace of premises business premises that's one that I know every deal that I've been involved in it's the first question the lawyer wants where's a copy of the existing lease yeah yeah and look that's a bit of a hurdle to clear too can you get that assigned but um and I do also have the sort of that the tenure there in that those premises or might you be getting the boot before and the the inkers dried on the deal that's right yeah exactly hmm so obviously pretty involved um yeah um to move on to financing ash which we've talked on talked about a bit um yeah obviously you need to uh get that process started with your lender um and we know in the last few years ash that process is really sort of escalated in its intensity hasn't it just the amount of information that the banks are looking for these days um in order to you know for them to do their own due diligence I suppose and enable them to to lend to the funds so um you know they wanna they wanna review the finances make sure the number stack up themselves um they're probably gonna wanna see forecasts you know six or 12 month forecast maybe even longer um to support the deal um and so you gotta be organised when you get into this you know um have your own tax up to date for example that's a huge one at the moment the bank's pretty much won't talk to you if you got overdue tax lodgement so um yeah that's you know does it this the financing stage you spend a fair bit of time with your accountant um doing the projections making sure the figures right make sure taxes right tax office reports all that sort of stuff hmm hmm and and look at Sam like you said you've you've got to be organised and on the front foot there one of the best things that you can possibly do is when you're having those early discussions with your Lindor um ask them what am I going to need to give you um to get this deal over the line so that you can actually get to work on that and and be ready to roll once you've sort of got that heads of agreement signed yeah and you're probably saying as I have actually fair few times where you know heads of agreements assign but then the purchase goes to the bank and doesn't stand a chance getting the finance cause they didn't ask that question you just said of their lend or what am I gonna need to give you in order to to get this across the line and you know that's that's really frustrating for everybody you know the purchaser would be disappointed the vendors probably a little bit little bit annoyed that they've burned up a bit of time for a deal it's never gonna proceed so yeah there's a lot in that part hmm hmm and so contracts or or legals um what's involved in that make yeah so you know it's not strictly necessary to have formal contracts um so um but you and I as professional accountants would always say their advice go and get some legal advice and make sure you know you've had your own um lawyer review the contracts at the vendors potentially drawn up um absolutely from my point of view I you know legally speaking do you you know is there a law that says that you must have a formally prepared contract not to my knowledge but it's not sensible it's a non negotiable thing from my point of view get a contract done exactly yeah and you know you're you're buying a business you're not a a legal practitioner who can understand all the legales in the contract in every last dot point in there I've seen many occasions when um you know I've reviewed a contract myself and thought that I had a good understanding of it and then it goes off to the to the purchases solicitor and the solicitor comes back with all of these questions that hmm you know once once they raise they seem obvious but it's really hard to understand some of the language that's used in these particular documents yeah well that's right and you know they can be pretty dense but you know we've got to keep in mind that the contract becomes the rulebook of who's gonna do what when um and it's what we fall back on if you know any issues arise as to how we got to resolve it so I think like you like you said affiliated to before make it's it's important that you're getting the right legal advice and make sure that you are actually understand what power it is that you're signing exactly and you know we talked about the third income and earnouts and things so the contract can not only work right up until the date of handover it can actually extend quite some years into the future as well and like you said I like the way you said it the rule book if there's any problems go back to the rule book and let's see how we deal with it hmm and and I guess from my point of view and I you know I've seen this in the wrong settings um is that some people are a bit flippin when it comes to contracts you know you might have a vendor who's this oh design that but they're really not committed to following it um and if you get a whiff of that take my advice run a mile um because there's a good chance you're gonna end up in court and that's not a fun place to be and it's not cheap either no um it it's a good point you make ash because you know fundamentally the deal to a large extent relies on the integrity of both parties so you know and again on hand over date is not the last you're gonna see at the van door there's potentially some hand over periods after that um and you know you're gonna need to work with them for a period of time in order to have a successful transition so yeah make sure you uh you know who you're dealing with as best you can as well okay and uh the last item you mentioned Mick was structuring yeah so again you know structuring is largely um a legal question uh your accountant can give you some some advice around that as well you know based on our experience and the tax implications of certain structures um but yeah there's certainly uh it's quite common for us to have a conversation with the purchasers legal advisor isn't it ash around the structure we can we can come to them with a with a beautiful tax structure that that might leave them with an element of exposure that the cut that the purchaser is not quite comfortable with in terms of asset Protection along those lines so uh yeah believe it or not it's not all about just paying the least amount of tax is it no that's right exactly sometimes tax is cheap if uh if the structure doesn't work from a uh asset Protection site and I I think also just from an operational point of view as well like you know we sort of this is more general than just in the setting of buying a business but you know it's not good when you see business owners who don't understand how their own structure fits together and works um it's important that operationally and the owners understand it and run it the right way exactly yeah that's one of the things I like to take some time with with my clients is to make sure they understand their own structures because the better they understand it the better they can operate it and then their business decisions are vastly different once they understand it they can actually use it for what it was intended for alright Mick so surely we must be getting near to the end of this process please tell me yeah we're getting closer ash but we're not there yet so so now we've got to work towards completion so um you know in amongst the deal there'll be some things that need to be done by so we've signed all of the contracts and that sort of thing yep ticked off our due diligence got our finance approved we know what date is settling but we know that there's a few things that need to happen before then so yeah there could be um some employee entitlements and a few other things that are conditions um precedent um yeah to make sure all of that sorted out and understood and quantified um between the parties um and there'll be other things in the contract as well every deal is different um but conditions precedent is really key to understand and make sure that um together both parties have got a plan to to execute those things prior to um settlement yeah you've got it do you have to be organised like that you know the most common one is that you know all the employees that are coming across with the business of sign the new employment contracts for example um you're not gonna be it wouldn't be sensible to settle on the deal until that's done exactly yep so um uh yeah so then there's those associated calculations that we talked about if we're buying the van doors company there are heap more complex calculations um around what's often referred to as the working capital peg um so you know you if you're buying the company there's there's cash in the bank that you're buying creditors creditors exactly yep so uh yeah this yeah once the deal signed off on between that and settlement is there's a really quite a bit of work to do and there's some quite important tasks and I think again like this is the important part to have the right support so to have a lawyer that's supporting you to have an account that supporting you because up and I'm certainly seen deals get delayed significantly at this point because there's a bunch of reasonably technical things that need to happen before completion can occur and you know the average sort of small business person hasn't had any training or experience in this and they're just gonna really struggle on a DIY approach yep absolutely it's key to have your professionals um in support and sort it out and onside make sure they've they've got it planned in their schedules as well so there's no surprises yes yeah alright so you know the big day arrives no we're not getting married but it's sort of not that different as well but you know the big day's arrived the deal's gone through um where we at yeah so pause for a quick Celebration ash there's been a lot of work up until this point yeah but uh this is really where it all begins isn't it so we gotta get on with it day one open the doors and and keep trading as if uh nothing's really happened that's not the finish line no it's the start ha ha ha ha ha we wish it was the finish line hmm yeah so uh in all seriousness there is a lot you know to go from now you know you you now own the business it's it's your baby it's your responsibility you've possibly got your first finance payment coming up in 30 days ha ha but you gotta make so uh yeah there's there's quite a lot um for the new owner to do um from this time on so um yeah we've really got to make sure that we've uh we're executing the transition plan now I suppose hopefully we've had um a bit of a discussion with the with the vendor you know particularly the hanging around doing a handover um process for a period of time um so yeah and you know above all else now now we're the owners we don't really want anything to go pear shaped yeah well that's it well let's you know we're paying for it now if it does so it's important this is and you know one of the things I think is really important is that as much as you can you you make sure that you you sort of clearing the path to be able to really give it the focus that it needs in the early days and and support it through that and I think also you know this is a change management you know to use that sort of corporate speak this is a change management scenario um and there is again a bit of an art and science to that that you need to make sure that you've got the right skills or the right help to do it and I'm sure you've seen it Nick um I definitely have I've seen you know people given advice about what to do after my post acquisition and it couldn't be more wrong and jeez does it end in tears absolutely yeah that change management piece you mentioned um is particularly important with the with the staff you know make sure you've you well engaged with them um they're happy they're on side they share the share the vision with you I suppose you know the last thing you want is for them to start looking for greener grass sooner rather than you know otherwise that than they otherwise would have yeah look I think um you know it's a it's a stressful and busy time for the vendor and for the buyer and it's really easy to forget that when there's sort of this level of change happening it it can be a stressful and worrying time for the staff and the customers as well and you know you need to make sure that that they are reassured that um that it's going to be a positive experience for them yep hmm alright um is there anything else that we need to remember you know once we're in that sort of post acquisition period make yeah so um just in particular uh in relation to deferred considerational earnouts yeah we need to make sure that we're keeping appropriate records to calculate those payments um yeah that no doubt that'll be an undertaking that we've made through the developing the contract um but equally from our own perspective as the purchaser we wanna make sure that we're you know only paying what we need to um for the for the business and for those calculations so it's in our interest to um in our self interest I should say or could say um to do a good job of um keeping track of that um and obviously if there are those calculations you know keeping the vendor in the loop and um making sure that their expectations are managed and how the business is performing um that type of thing so um yeah yeah and like I think there's a you know a bit of expectation management involved in that like you know they can often be some quite significant dollars at stake and and that can weigh heavily on the vendors mind um and so there's a lot of room for conflict around um an outdoor or deferred settlement if things start you know going off plan ha ha or not according to plan and so you know you do have to be prepared to work together so that everyone gets a good outcome yep hmm agree alright Nick well you know we've been going a little while now talking a little while and this like clearly there's a huge amount of of information or or um you know knowledge that needs to be absorbed um in this sort of process and I feel like we're probably only really just scratched the surface yeah I think we have ash you know it's been a fairly high level discussion um and it just shows that the buying of business is a pretty serious undertaking and you need to uh have the right people in your corner to help you get it right hmm so look before we wrap up um I just like to give you an opportunity to share a final few tips or takeaways yeah um so No. 1 research thoroughly I think is probably um a good tip you know you wanna make sure um that you understand the industry you're getting into if it's a new one um if it's an exist like you're already in that industry you wanna know um as much as you possibly can about this particular business you know is it the geographic location is it the business itself you know what's it's history what's it's reputation all that sort of stuff so yep you can't really spend too much time on that element of it um before you start knocking on doors and making inquiries um obviously professional guidance from you know people like ourselves and legal teams and banks and things like that as well um you can't really underdo that at all and um above all else be patient um yeah a lot of people I've seen it yeah over the years where people see the opportunity and they think it's gonna escape them if they don't act now ha ha and uh it's quite easy for them to to go in well and truly underdone and have a a really poor outcome you know just something that they don't really want and nor are they expecting um in some cases so yeah don't forget you can't let that FOMO set a rule you too much can you yeah exactly exactly so that's it actually they're the big tips well thank you Mick I think this has been illuminating I hope our listers will really get something out of this um and um yeah certainly remember that um you know preparation and and diligence a key in this sort of stuff and um you know if anyone wants to find out more about the process of buying a business they just need to reach out to to Mick or ourselves at sky so thank you Mick thanks for the opportunity thank great thank you see ya