EMAIL NEWSLETTER
FEBRUARY 2014
Welcome
again to the McLean
and Co. Newsletter
in which we discuss current taxation and business matters. We trust
you find it informative.
We
are happy to accept new clients. We would be happy to assist colleagues
and acquaintances as new clients.
INDEX
-
Buying a Business- Due Diligence
-
11 Inspirational Quotes to Start Your Week
-
Fraudulent (IRD) Phone Calls
BUYING
A BUSINESS- DUE DILIGENCE
Due
diligence is probably the most critical stage in the buying process. Many
prospective buyers incorrectly identify this period as strictly a financial
review but it goes far beyond that. Due diligence encompasses a far greater
project and that being the complete investigation and review of the
business.
One
of the keys to buying a good business, comes from your ability to learn the
intimate details of the business. To identify the strengths, weaknesses,
pluses, minuses, growth opportunities and areas of concerns. If you do not
do a flawless job of gathering information, you will not be able t
o complete
the transaction since you’ll be uncertain about too many components of the
business.
When
To Start The Due Diligence?
The
investigation process begins the moment a business becomes of interest to
you. Your goal is to make certain that you uncover everything
about any business BEFORE you buy it. You don’t have to meet the seller or
even visit the business for your research to begin. The Internet is a tool
that will allow you to investigate the business, the industry, the
competition, the marketing, the suppliers, and so on.
By
beginning your investigation early on you’ll position yourself to
ask the proper questions to the seller. Once you progress to the stage of an
accepted offer, you will commence the inspection or financial due
diligence. This is the time when you’ll have access to all of the
company’s books and records.
Once
you look at a particular business, you’ll find a
number
of things crossing your mind regarding the acquisition. Keep a notepad
handy at all times and log your thoughts. You’ll have many thoughts
about things “I need to check out”. Put
together your checklist of what you need to investigate and how you’re
going to do it along with the materials you may need from the seller to
accomplish
it.
Things to keep in mind:
Allow
yourself enough time:
Many
sellers and some brokers will press for a very short inspection period;
sometimes just days. Don’t get bullied into this - give yourself ample
time to complete this part of the process. You should allow for, negotiate
and not settle until you have sufficient time to finalise to your
satisfaction the inspection/due diligence period.
Prepare
properly:
Since
you’ll have some time restrictions (you’ll only have x number of days
per the contract), provide the seller with a listing of all of the materials
required for you and or your
Accountant
to complete this exercise. No matter what you’re told, do not begin the
process until they have everything ready for you.
Dealing
With Surprises:
You’ll
probably find some surprises, don’t panic, it’s normal. Work through
them. Get clarification. Build your case. Don’t run to the seller or
broker every time you find an inconsistency between what you’ve seen
versus what you were told.
No business is perfect. The rule to follow is do not treat any incidents and
catastrophes nor should you treat any catastrophes as incidents. If you find
a major problem, get your facts in order and you can then decide the
appropriate action to be taken with the seller (i.e. renegotiation, walking
from the deal, etc..)
11
INSPIRATIONAL QUOTES TO START YOUR WEEK
- Whatever the mind of man can conceive and believe, it can achieve.
–Napoleon Hill
- Strive not to be a success, but rather to be of value. –Albert
Einstein
- Two roads diverged in a wood, and I took the one less
travelled by,
and that has made all the difference. –Robert Frost
- I attribute my success to this: I never gave or took any excuse.
–Florence Nightingale
- I’ve missed more than 9000 shots in my career. I’ve lost almost
300 games. 26 times I’ve been trusted to take the game winning shot
and missed. I’ve failed over and over and over again in my life. And
that is why I succeed. –Michael Jordan
- Life is what happens to you while you’re busy making other plans.
–John Lennon
- We become what we think about. –Earl Nightingale
- Twenty years from now you will be more disappointed by the things
that you didn’t do than by the ones you did do, so throw off the
bowlines, sail away from safe harbor, catch the trade winds in your
sails. Explore, Dream, Discover. –Mark Twain
- Life is 10% what happens to me and 90% of how I react to it.
–Charles Swindoll
- The most common way people give up their power is by thinking they
don’t have any. –Alice Walker
- The mind is everything. What you think you become.
–Buddha
FRAUDULENT
(IRD) PHONE CALLS
IRD have reported that they've been made aware of fraudulent phone calls where the caller claims
to be from Inland Revenue.
Treat any phone call as suspicious if you're:
- asked if you're aware of your refund or rebate
- told to call back on a non-0800 number
- asked to make an upfront payment to claim your refund (this is usually
explained as a "transfer fee" or "donation to
charity").
If you receive one of these phone calls you should hang up and not call
the number back. If you have concerns call IRD on 0800 227 774.
IRD will never ask you to pay money or supply your credit card
details to claim a refund.
If you've given money or provided personal details to a suspicious
caller, please contact your bank or credit card provider immediately.
The information provided in this email newsletter is for
informational purposes only. McLean and Co. accept no
responsibility for the opinions and information expressed in the
information provided and it is provided "as is" without
warranty of any kind. The user assumes the entire risk
as to the accuracy and use of this document. Readers are
asked to seek professional advice pertaining to their own
circumstances. The McLean and Co. email newsletter may
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can assist further, please email McLean and Co as follows:
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