Buying a business requires a thorough do-diligent list and the last thing you probably want to do is add yet another deal breaker.
At StaffScapes, we are an Outsource Human Resource company locally in Colorado that must gather a lot of detailed information and hidden costs for an accurate proposal. One of my past prospects’ now a current client, was having trouble getting the Workers Compensation Declaration Page from the seller of the business prior to the sale of the business. Once explaining the importance of reviewing the workers compensation Declaration page my prospect finally demanded to see a copy.
After reviewing the Workers Compensation Declaration Page with our prospect what we found was that the current workers compensation rate had a modifier of 1.25. That 1.25 modifier was adding an extra 25% to the premium this year. In addition to the modifier we also discovered that the current employer did not have any safety programs in place as well as multiple injuries in the past years that will increase his rates significantly each year at renewal. Estimating what the new rates where going to be at the next renewal date, our prospect was able to negotiate a 25,000 difference in the purchase of the business which would have been added as an unforeseen future expense.
As a local Colorado PEO, StaffScapes helps our clients stay in compliance as well as and manage the risky life cycle of having employees.