Johan Gory, managing director of OnPoint Accounting, shares his expertise in financial due diligence in this insightful discussion. He highlights the pitfalls buyers face that lead to overpaying and introduces the 'source of funds' technique to unearth a business's true financial health. Johan explains the significance of goodwill, how to navigate challenges when acquiring distressed businesses, and the complexities of director's loans in valuations. His practical advice is essential for anyone looking to make smart investments without risking their cash.
41:20
forum Ask episode
web_stories AI Snips
view_agenda Chapters
auto_awesome Transcript
info_circle Episode notes
insights INSIGHT
Goodwill Can Mask Insolvency
Goodwill on balance sheets often masks insolvency or overvaluation.
It represents paying more than net asset value, but sometimes it hides financial weakness.
question_answer ANECDOTE
Buying a Distressed Business for £1
Johan bought a distressed business for £1 despite heavy debt due to the owner's difficulties.
He gained value by acquiring the client base and staff without a large upfront cost.
volunteer_activism ADVICE
Use Accountants to Find Deals
Build strong ties with accountants and bookkeepers as they can alert you to exit opportunities.
Leverage their network to find businesses owners ready to sell before they publicly list.
Get the Snipd Podcast app to discover more snips from this episode
In this episode of Business Buying Strategies, Johan Gory, managing director of OnPoint Accounting, offers an in-depth masterclass on financial due diligence. Johan explains the importance of involving a due diligence expert, common pitfalls that cause buyers to overpay, and techniques such as the 'source of funds' trick to uncover the real financial health of a business. He also discusses the relevance of goodwill, the challenges and opportunities in buying distressed businesses, and the role of director's loans in business valuation. This episode is a must-listen for anyone serious about buying a business without risking their own cash. Key moments 00:00 Introduction to Business Buying Strategies 01:29 Meet Johan Gory: Expert in Financial Due Diligence 05:16 The Importance of Financial Due Diligence 08:36 Understanding Financial Terminology and Add-Backs 13:53 Opportunities and Challenges in Buying Distressed Businesses 17:25 Networking for Business Opportunities 22:04 Understanding Director's Loans 23:54 Negotiation Strategies with Director's Loans 26:07 Evaluating Business Owner's Compensation 29:48 The Importance of Cash Flow in Due Diligence 30:57 The Secret Weapon: Source of Funds Report 38:49 Commercial Due Diligence: Beyond the Numbers
** Looking for a great acquisition lawyer in the UK? Use mine! **
If you are looking for a lawyer in the UK to help you get the deal over the line, then use my own lawyer, John Andrews. You can phone his office at (0345) 2412494 or email him at johnandrews.deallawyer@jmw.co.uk.
Ready to get started?
Here's how you can start your business buying journey…
if you've already bought a business, you should be part of my Inner Circle group where we discuss raising capital, integration management, and exiting. Email Maria on hello@thedealmakersacademy.com for more information.
Business Buying Strategies from The Dealmaker's Academy