Buying a business in Australia is always a difficult task without any proper information. Australian business brokers are the best person to deal in this situation. GE Real Estate & Business Agents also provides tips and consultation before buying a business in Australia.
What you need to know before you buy a business.
WHERE WILL YOU START?
WHAT DO YOU LOOK FOR?
WHAT BUSINESS WILL YOU BUY?
CAN YOU GET FINANCE?
WHO DO YOU GO TO FOR THE RIGHT ADVICE?
‘It is important you read and understand the following’.
1. WHY ARE YOU BUYING A BUSINESS
It is a commitment of finance, energy and time. You need to be clear on the reason, why you want to buy a business. Is it lifestyle, buying yourself a job or do you want to use your skills to create wealth for yourself and your family?
2. SKILLS
a) Do you have qualifications?
b) Do you have references?
You need to have the business skills in the areas of planning, budgeting, marketing and supervising of staff and the business.
3. FUNDS
You need to have enough funds available to cover:
a) The purchase price required to purchase the business.
b) The ingoing costs including stamp duty, settlement costs and lease transfer costs.
c) Work capital
4. WHAT IS BEING VALUED AND SOLD?
In most business sales, only the assets are valued and sold. Assets include plant & equipment, stock, work-in-progress, trading name, goodwill and intellectual property. Debtors are not included. These are retained by the vendor who also pays out the creditors at settlement. It is rare for the corporate structure of private companies to be sold due to the possibility of unknown liabilities associated with the company.
5. HOMEWORK
Study the information, check that the figures make sense, check the method of valuation and seek advice from your accountant and/or legally. After investigating and seeking advice, make up your own mind. If you rely on others to make your business decisions, then maybe you should not be in business.
6. FOUND THE BUSINESS
Be prepared to move when you find the right business. Put an offer in without delay. A written offer is always taken more seriously. We have often seen a vendor reject a verbal offer, only to accept the same offer when put in writing from another purchaser. A written offer on the table, together with a deposit, tells the vendor you are serious. You the buyer then carry out a complete examination of the business with your accountant to attend the business, observe its operation. If at the end of this examination, which usually takes 10-14 days, you are not satisfied, you can walk away and get your deposit back. Deposits are always refundable prior to exchange.
