PJB PEST MANAGEMENT CONSULTANT
  • PJB Services
    • Education & Training >
      • Schedule CEU Hours
    • Pest Problem Resolution
    • Litigation Support
  • Events
  • Articles
  • Pest Info
    • Ants
    • Bed Bugs
    • Cockroaches
  • About

Blog / Articles

Thinking of Purchasing a Company?

1/27/2022

Comments

 
Purchasing an existing company is desirous because, generally speaking, doing so provides immediate increased revenue sources and growth. However, we need to assure that the business being purchased is worth the purchase price and will be beneficial to the purchaser long term. To do this we need to conduct what’s known as due diligence.
 
Due diligence is a business analysis process which involves the collection, review and study of certain information regarding the business entity or investment being considered. This due diligence is conducted prior to making the purchase decision or completing the transaction such that an informed decision is made. Due diligence may be applied to various business decisions but is commonly utilized for business transactions including the purchase of a business entity or investment of significant magnitude.
 
When conducting due diligence, we’re checking various aspects of the business being considered. The overall and fundamental basic considerations and questions when purchasing an existing business include but may not be limited to:

What Exactly Is Being Purchased?

Picture
Assets such as equipment, supplies, vehicles, accounts receivable, real property, the customer list, existing liabilities and other such factors.

What Is The Nature Of The Existing Business?

Are there legitimate service agreements / contracts in place?
  • ​What is the duration of these contracts?
  • What are the existing service offerings or market mix?
  • Commercial?
  • Residential?
  • Government?
  • Termite/WDO?
  • General pest?
  • Specialized services?

Confirmations?

Certified Public Accountants who conduct business and financial audits utilize various confirmation process to assure that the financial statements fairly represent the state of the business being audited. As an example, confirmation of cash, or the bank balance(s), are commonly conducted to assure that the amount of cash reported on the financial statements is correct at a certain date. This is done by attaining confirmation of the account balance from the bank where the cash is deposited. Confirmations of other items may also be conducted to assure the accuracy of the various representations of the business.

How Can We Confirm The Various Representations Of The Business Being Considered?

  1. How do we confirm what we’re purchasing actually exists.
  2. What portion of the business should be confirmed?
  3. These are questions which are at the heart of due diligence.

How Do We Finance The Purchase?

  1. Will it be a cash purchase?
  2. Will it be financed via a business loan?
  3. Will there be terms provided by the seller?
  4. Do we need to include reserves for contingent liabilities which may exist?

Are There Existing Employees?

  1. How are these employees being compensated?
  2. Does the compensation program match your company’s program?

Profitability?

Picture

​- Is the existing business being considered profitable?
​

- Is pricing and services acceptable, compatible and/or similar to your own?

Other Factors

There are a myriad of other factors which may be considered during the purchase of an existing business.
​
What exactly is being purchased is of course an important factor. An existing business may have various liabilities which the purchaser is not willing to assume. These items may be suitably addressed in the structure of the purchase details. For example, the presence of contingent liabilities associated with subterranean termite warranties may be addressed by including an adequate reserve that covers these contingencies.
 
The purchaser may not want to assume outstanding loan balances or other liabilities. When this occurs, these items are suitably addressed in the final terms of the purchase agreement and may be addressed in various ways.
Comments

No Bed is an Island . . .

4/9/2020

Comments

 

​No Bed is an Island . . . Or is it ?
How to isolate a bed to prevent bites.

​Bed bugs suck! And, they bite too.
​
Yes, one major factor that bed bugs are different than other pests, such as roaches, is that they’re going to bite our customers if we don’t get 100% of them when we service the account. It’s not like cockroaches or ants where some customers won’t complain about any post treatment sightings. However, customers will most definitely complain about post treatment bites! Bed bugs are raising the bar for our entire pest management industry and related industries as well. They are, after all, serving to make us better at what we do.

Read More
Comments

Talk the talk

3/18/2020

Comments

 

Dear PJB Attendees,

Picture
​​The ability to sound knowledgeable about your craft is not limited to those who have a college
degree. In fact, the ability to learn is shared amongst all primates and is present in most
humans. It is particularly well developed in those humans who have a genuine interest in
increasing their professional knowledge, expanding their career opportunities and seeking
excellence.

Read More
Comments

FAQ: Identifying Bed Bugs

3/8/2020

Comments

 

3 Things About Bed Bugs


Read More
Comments
<<Previous

    Categories

    All
    Bed Bugs
    Biting & Stinging Pest
    Carpet Beetle
    Contractors
    DIY Tips
    Education
    Events
    Fire Ants
    Professional Learning
    Purchasing A Business
    Purchasing A Company
    Training
    Workshops


    Paul J. Bello

    ​Author, Consultant, Speaker, & Educator

You Have Questions for Paul? Join Bed Bug Practical on Facebook

Search for Articles Here

Telephone

770-500-0460

Get in Touch

  • PJB Services
    • Education & Training >
      • Schedule CEU Hours
    • Pest Problem Resolution
    • Litigation Support
  • Events
  • Articles
  • Pest Info
    • Ants
    • Bed Bugs
    • Cockroaches
  • About