Mergers & Acquisitions Advisory

A Neumann & Associates, LLC

March 24, 2017

About to buy a business? Evaluate these often overlooked areas first.

By Achim Neumann

The first purchase of a company is a transaction that can be fraught with risk. A rookie entrepreneur’s lack of experience can blind them to parts of the process that can cause serious problems months or years down the road.

They devote the majority of their attention to revenue and profit figures, and in doing so, they often neglect to examine parts of a prospective business that pros seldom ever miss.

Those acquiring a business in the near future should look into these overlooked aspects, as it will spare them from the huge headaches that can result from failing to assess them.     

Legal paperwork

There are few things that keep entrepreneurs up at night than the emergence of serious legal issues. To avoid this nightmare from becoming a reality, prospective business owners should go to great pains to review the intellectual property paperwork, including any copyrights, trademarks, and patents of a prospective company.

Additionally, any consulting agreements should be examined from front to back to make sure everything is in order.

If there are any glaring problems, there’s a good chance the sellers are trying to pass off imminent problems onto the shoulders of a hapless purchaser.

If a buyer uncovers any of these issues, they should run as fast as they can.

Employee retirement plans

It is stunning how many business buyers overlook this large expense when making a decision on whether or not to purchase a company.

This entitlement can have a major impact on its books, tu
rning a business that may appear to be an attractive buy into one that might struggle to make money in the long run.

Those looking to buy any business should take an in-depth look into the regulations they will be compelled to follow when it comes to funding the retirement accounts of their employees.

Furthermore, the previous owner may have neglected to keep their plans up to date with the Department of Labor. This can land an unsuspecting new owner in trouble with the law if the government finds fault with their retirement plans shortly after they take control.

W-2’s and 1099’s

Businesspeople need to be mindful of many different branches of government when it comes to buying and running companies, but of these departments, the IRS tops the list.

One of the biggest tax red flags a purchaser should watch for is the distribution of 1099 forms versus W-2’s.

If this occurs at a company under consideration, they should make certain that this practice is 100% legal as per IRS regulations.

If it is not, consider moving on, as running afoul of this government agency can cost significant amounts of time and money.

About A Neumann & Associates, LLC

A Neumann & Associates, LLC is a professional mergers & acquisitions and business brokerage firm having assisted business owners and buyers in the business valuation and business transfer process through its affiliations for the past 30 years. With an A+ Better Business Bureau rating, the company has senior trusted professionals with a deep knowledge based in multiple field offices along the East Coast and has performed hundreds of business valuations in its history. The firm’s competitive transaction fees are based on successfully completing transactions. For more information, please contact A Neumann & Associates at 732-872-6777 or

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Client Testimonials

“I had been in touch with Karin and Gary from A Neumann & Associates regarding some opportunities and was looking forward to meeting with them. Hence, when they organized a seminar in Princeton, NJ, I was quick to sign up. The seminar was very informative as the team walked the attendees through various scenarios and referenced real life buying/selling situations they had been through. The sessions by Gary, Karin and Achim were crisp and focused and brought clarity to potential seller and buyers. I strongly recommend the team and look forward to continue working with them.”

Gaurav Tyagi

“Thank you for your Event on "How to value, Sell, and Buy A Business for Maximum Profit" and the insight into ANA’s approach on what is involved in the Business Exit for sellers. Garys Hervieiou's "Business Valuation", Achim's "Deal structure" presentation and Karin’s "Preparing the Package" are real street knowledge shared. They answered attendees questions which makes it more interesting for learning from others. Great for small businesses like us. The presentations were totally worth our time and travel for the event to Princeton, NJ from Rockville MD. Ravi Bhutani, President, CIPS”

Ravi Bhutani

“Gary, this is to thank you for an excellent job done in selling our business. We could never have done it without your professional expertise, dedication and time put in without reservation to make it happen. We will gladly and highly recommend you to anybody in our position.  It was a pleasure to work with you.”

Pat Iammatteo, Owner

“Your vetting is simply outstanding, among the best I've seen from a broker.”

Eric H., Investor

“I recently contacted A. Neumann and Associates about getting a valuation of my business done. I spoke with Marc, who explained the process in detail. After meeting with Marc in order to get a clear understanding of my business, and what I was hoping to accomplish. His patience in answering all my questions and his knowledge of the proper way to market my business gave me great confidence that this is the firm I will be using to sell my business for max value. Working with Marc at A Neumann & Associates was very easy and professional. I did not know all that was going to be involved in selling my business but they helped me through the process. What I thought was going to be a just another one of those pushy sales companies was just the opposite. Polite, knowledgeable, and a pleasure to talk to and deal with. I highly recommend this firm to anybody who wants to sell now or down the road. Marc not only knows his stuff, but actually is a real nice guy.”

Double Diamond

“Used A Neumann & Associates to sale my business. could not imagine having done it with out the patience and experience Gary provided. Thanks Gary,”

Dennis Frazier

“Working with Marc and his company was a pleasure. What I thought was going to be a just another one of those pushy sales companies was just the opposite. Polite, knowledgeable, and a pleasure to talk to and deal with. Marc handled most of the interaction and he has one of the greatest demeanors. Again, it was a pleasure working with him and his firm.”

Douglas DiCeglio

“I recently completed an acquisition using A Neumann & Associates. Tony Valentino was very helpful and accessible during the entire process. They do a thorough job vetting both parties and got us to the finish line.”

Srini Mudambi

“Claus out of Florida helped us with the sale of our business. We had never done anything like this and him and his team walked us through the process from start to finish. We had some challenges through the process and Claus continued to show up even in the difficult conversations.”

Colby Harris, Co-Owner, Del Mar Designs

“Claus Madsen thoroughly helped us with selling our company. From the 1st introductory meeting explaining to us what was possible, to providing us with resources to assist with the sale. Claus was invaluable throughout the whole sales process. Claus was with us every step of the journey and always made himself available for any questions or issues that came up along the way. If you are interested in selling your business, I encourage you to reach out to Claus and the ANA team so that they can let you know what’s achievable. These guys will make it happen!”

Ron Harris, Co-Owner and Vice President, Del Mar Designs
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Contact A Neumann & Associates, LLC

If you are considering selling your business, please contact us to learn more about our comprehensive service spectrum. Our experienced professionals will answer all your questions about selling a privately held business in complete confidentiality. Please fill out our contact form, or call us at 732-872-6777. We will contact you directly and will never identify ourselves to your employees.

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