You’re always on the lookout for a chance to identify ways to make life a little better. When you heard about a bookkeeping business for sale, it made you stop and think. Would purchasing the business be a good move? The fact is that you will likely benefit from this more a great deal. Here are some reasons why this could be the ideal decision for your future.
What is Bookkeeping Business?
Every business, no matter how big or small, is required by law to keep financial records. In today’s busy world of business, more and more companies are outsourcing their bookkeeping to maximize efficiency and keep payrolls down. If you have an eye for detail and want to be your own boss, buying a bookkeeping business can be a great investment and a very rewarding career.0
Bookkeeping businesses can perform a variety of tasks, depending on the needs of their clients. Typically, they maintain financial records and prepare financial statements. They might also process payroll, pay bills, prepare invoices, handle tax accounting, and much more. A bookkeeping business can be as large or as small as you choose to make it. Smaller operations can potentially be home-based businesses. Larger operations may have several employees and require office space. Bookkeeping or accounting firms are busy year-round but could have increased workloads during tax season.
Buying an existing bookkeeping business gives you the advantage of having an established clientele. This provides cash flow from the start while still giving you the opportunity to put your personal stamp on the operations.
Your Career Experience is a Great Fit
Most of the work that you’ve done during your adult life is connected with business accounting. At times, you worked in the accounting departments of different companies. You’ve also been an employee of a business that managed the financial accounts of a number of small businesses. In short, you know what it takes to make this sort of operation a success.
That prior experience means that you are a perfect candidate to own bookkeeping business. Along with your expertise in keeping accounting records, you also have experience managing teams of people who do a lot of the work. That makes you a natural for this type of company.
There’s Enough Demand in Your Market
The business already has an established clientele, but it does need to expand. As you look around, there’s definitely a demand for the types of services you will offer. In fact, you can think of several small to mid-sized business owners who would be open to talking with you.
This will allow you to hit the ground running with the clients already in place. At the same time, you can mount a targeted sales campaign to bring in business from clients that others have not given much attention to. You may soon need to hire more people to keep up with that demand.
You Have Ideas About How to Run a Business
The years you’ve worked in finance have helped in more ways than one. For example, you’ve learned a great deal about what procedures make this type of company operate efficiently. At the same time, you’ve seen some serious mistakes that cost a lot of time and money. By drawing on what you know, you can avoid mistakes while adapting successful strategies to your operation.
This would allow you to buy that bookkeeping business for sale and take it to a whole new level. Everything that’s working will remain in place, but you can jettison what’s not serving the company or the clientele, replacing it with other approaches that benefit everyone.
You Like the Idea of Having a Business of Your Own
The bottom line is that you’ve always thought about having your own business. Now you have an opportunity to make it happen. This alone is reason enough to look closely at the specifics and see if the idea still looks like a good one.
You realize that it will be different in spite of your experience. Before, there was always someone higher up to go to if the need arose. Now you will be that higher up. While that’s a little intimidating, the idea of being able to do things your way while still remaining in compliance with applicable laws and regulations holds a lot of appeal.
Why not learn more about this bookkeeping business and what it has to offer? You may find that there will never be a better time to step out on your own and build something that will be around for a long time.
Why buy a bookkeeping firm?
For the last few years I was doing small business advising and kept seeing bad, out dated bookkeeping. So we’d refer clients over to a good option and it was transformative. Clients suddenly had up-to-date financials, they started to understand their numbers, and they could make decisions with data.
I had an itch to buy a business and kept coming back to bookkeeping.
It can be solid margins with recurring revenue and a chance to serve the small business clients I love.
Advantages and Disadvantages of Acquiring an Existing Business
When you operate an existing business, everything is already set up. An existing blueprint is available, there is an established customer base, fully trained employees, and defined operating expenses.
Having an established customer base translates to sales from customer commitment to brands and referrals through word of mouth. According to a Nielsen survey, 60% of consumers with internet access are most likely to purchase new products from a familiar brand rather than change to a new brand. In this scenario, you can focus more on understanding customer needs and improving the customer service experience.
It is given that any existing business has its set of experienced workers who can assist with the transition. This will save you a valuable amount of resources as there is less need for on-the-job training.
Similarly, a fully-operating business already has established contracts with vendors making it easier to get products from manufacturers.
On the other hand, buying an existing business may have some disadvantages, most that you can avoid with a thorough evaluation.
Factors in valuing a business include competition, demand, future community development, legal commitments, union contracts, buildings, and product prices.
When you buy an existing business, you also inherit both short term and long term existing obligations that come with it. This includes a lease agreement, collateral, outstanding loans, and significant account receivables to be inherited.
Financial Data of the Business
Intensively go through the paperwork information- tax returns, bounce sheets, profit and loss statements, financial documents, and business loans. Review financial statements and tax returns for the last three to five years (what it used to be).
Recognize that the data can be misleading, so look out for details in overvalued assets, overstated or understated expenses, underreported income, and unrecorded debts. This can help you adjust the valuations and review the actual status of the business.
Closing the Deal
Once you have decided to purchase the business, do your due diligence, and negotiate the terms, it is time for the final stage to close the deal. In this last stage, it is best to rely on a third party to do the legal work for you. You can hire an accountant or attorney and ask for the advice of an experienced business owner.
With thorough investigation and evaluation, investing in an existing business can be a profitable endeavor. Remember to take note of the things to consider when buying an existing business to avoid buyer’s remorse.