Hi,
I've involved the accountant who's also providing business advocacy services and we have signed the contract that he would help us to negotiate the best purchase price of the existing business that we found.
For the negotiation service, an invoice of $5,000 is payable upfront, with the difference payable upon the contract being signed. For some reason, if within the early stages of negotiation and after the due diligence is completed but before submitting an offer to purchase to the vendor, if the buyer decides to not proceed with the purchase $3,000 is non-refundable. Any balances will be refunded if the buyer does not proceed with the purchase before an offer to purchase the business has been made.
However, upon contract signing our fee becomes due and payable upfront.
We have met one of the business owners (his brother, who's his partner in business wasn't present) but without the business broker being present (couldn't make it), we have been presented copies of the financial statements but very unclear and many questions have been unanswered from the vendor.
After the meeting, the accountant/business advocate made an Excell spreadsheet with some adjusted projections and purchase offers (4 options) and kind of rushed us into making a decision although we asked that we would like to have some more information about the finances (section 52, rent bills, etc).
He decided upon our approval to go with the price offer that we have stated to him that doesn't seem reasonable (half price from advertised price) but he told us that is just to test the water if the vendor would accept it and we should completely trust him in what he's doing. He came back to us saying that the business broker has accepted one of the offers and he will ask the vendor.
Now the gut feeling is telling me that the business advocate/accountant is looking after himself and the profit he makes in a difference of what was the advertised price of the business and what he negotiate (he takes 10% of the negotiated price difference). Lower price - bigger profit for the business advocate.
I feel like things moved really quick in terms of going to the business broker with the offer and we didn't even get proper due diligence from the business advocate/accountant.
Now my understanding is if we decide not to go ahead with the business purchase the accountant is going to keep the whole $5K because he went with the offer to the business broker?
After the offer, I asked him that we actually went with the offer but he didn't tell us if this business is going to be profitable from the projections and he said that he looks at it from the perspective of the resell value in the future hence it is profitable if we can close the deal based on his offer. It's not exactly the answer we were looking for. We wanted to hear if this business is good enough for me and my partner to quit our jobs and move into this business and make a living. He answered that this business is reasonable if only one of us takes over and the second person stays at the current job.
Is there any way we can get our money back if things go south or we just wasted $5K by signing this agreement?
I'm not sure now even if I want to work with this business advocate as he doesn't seem to look in our best interest. 🙄
Thank you upfront for any advice and guidance.
Cheers,
V.
I've involved the accountant who's also providing business advocacy services and we have signed the contract that he would help us to negotiate the best purchase price of the existing business that we found.
For the negotiation service, an invoice of $5,000 is payable upfront, with the difference payable upon the contract being signed. For some reason, if within the early stages of negotiation and after the due diligence is completed but before submitting an offer to purchase to the vendor, if the buyer decides to not proceed with the purchase $3,000 is non-refundable. Any balances will be refunded if the buyer does not proceed with the purchase before an offer to purchase the business has been made.
However, upon contract signing our fee becomes due and payable upfront.
We have met one of the business owners (his brother, who's his partner in business wasn't present) but without the business broker being present (couldn't make it), we have been presented copies of the financial statements but very unclear and many questions have been unanswered from the vendor.
After the meeting, the accountant/business advocate made an Excell spreadsheet with some adjusted projections and purchase offers (4 options) and kind of rushed us into making a decision although we asked that we would like to have some more information about the finances (section 52, rent bills, etc).
He decided upon our approval to go with the price offer that we have stated to him that doesn't seem reasonable (half price from advertised price) but he told us that is just to test the water if the vendor would accept it and we should completely trust him in what he's doing. He came back to us saying that the business broker has accepted one of the offers and he will ask the vendor.
Now the gut feeling is telling me that the business advocate/accountant is looking after himself and the profit he makes in a difference of what was the advertised price of the business and what he negotiate (he takes 10% of the negotiated price difference). Lower price - bigger profit for the business advocate.
I feel like things moved really quick in terms of going to the business broker with the offer and we didn't even get proper due diligence from the business advocate/accountant.
Now my understanding is if we decide not to go ahead with the business purchase the accountant is going to keep the whole $5K because he went with the offer to the business broker?
After the offer, I asked him that we actually went with the offer but he didn't tell us if this business is going to be profitable from the projections and he said that he looks at it from the perspective of the resell value in the future hence it is profitable if we can close the deal based on his offer. It's not exactly the answer we were looking for. We wanted to hear if this business is good enough for me and my partner to quit our jobs and move into this business and make a living. He answered that this business is reasonable if only one of us takes over and the second person stays at the current job.
Is there any way we can get our money back if things go south or we just wasted $5K by signing this agreement?
I'm not sure now even if I want to work with this business advocate as he doesn't seem to look in our best interest. 🙄
Thank you upfront for any advice and guidance.
Cheers,
V.
