Are you tired of working for someone else? Have you been dreaming about owning your own business for a long time now? Bsale can help you find the right opportunities.
Buying a business is an option that many people don’t know how to go about, so we have put together 6 things to consider.
It can be an intimidating task when you think about purchasing a business. You might not know where to start, or you may have heard horror stories about the process.
If you’re ready to take the plunge and buy your own company, these 6 tips will help make it easier!
It includes 6 key points that are crucial for your decision to be successful and it goes into detail about how each point can impact the future success of your company.
1. Ability to own and operate the business
In business, the phrase ‘ability to own and operate’ refers to your ability to take over a business in its entirety.
Many people who buy businesses do so because they want the rights of ownership without having to start up from scratch – it is essentially buying an already-established business that does not require you to create everything Generally speaking, this means:
Can you acquire all assets? This includes tangible items like equipment, vehicles, etc as well as intangible goods such as client lists or contracts with suppliers.
It also covers any copyrights and patents associated with the sale.
Can you run every aspect of the enterprise under one roof or will some parts need separate management? Do employees stay on board after acquisition? If you do not plan to keep the current staff, what will happen with their roles? Are there any liabilities that you need to be aware of? Be sure all legal framework is in place before buying a business.
2. Finances Available
You need to have the necessary funds available to make a purchase.
In some cases, the seller may offer vendor finance or a buy-out period, it will depend on the business you are buying.
While you may be able to apply for business loans in Australia, it will take time for this to be processed, and lenders usually require some kind of collateral when issuing a business loan.
Taking out a loan when purchasing an established business could potentially result in problems down the road. You need to ensure you have a solid understanding of the business you are buying and your ability to make repayments, always conduct a thorough due diligence with a professional.
3. Finding the Right Business Opportunity
The most important thing to consider before buying a business for sale in Australia is finding the right opportunity.
In your initial research you need to find out:
- What is the best industry for me?
- Where do I want the business to be located?
- How much am I willing to spend?
- What is the current net profit to the owner?
- Is there a year-on-year growth or decline?
- How long will it take to get a return on my investment (ROI)?
- Do I want an online component included such as an ecommerce store?
- How many staff does the business have?
- How long has the business been established? Will you consider a business < 3 years?
You need these answers so you can decide whether or not buying a business for sale is the right move to make.
4. Due Diligence Process
The due diligence process is something that a prospective business buyer needs to understand before becoming involved in negotiations with the seller.
It can be daunting and confusing for first-time buyers, so it important to speak with a professional who can help guide you. You dont want to make a mistake and purchase a business that will become a financial liability.
Let’s break it down into 6 easy steps:
- Site visit and access
- Financials review
- Company history research
- Competition analysis
- Hiring management team/advisors (optional)
- Negotiations Once all of these have been completed successfully, you will have an extremely clear picture of what your company looks like from top to bottom!
5. Check the Lease Agreement
It is important to make sure that your new company has good credit, and that it can afford its monthly rent payments.
If there are any issues with the current lease or if the landlord will not agree to renew it, then this could be an issue when considering buying a business for sale.
You’ll need reputable tenants who have enough money coming into their bank account every month so they can pay off all of their bills on time – including paying rent!
This means they should also pass regular reference checks as landlords may request these from previous landlords too.
In addition to checking whether your potential businesses’ financials allow them to these requirements, you’ll want to check the company’s lease agreement.
6. Entering Successful Negotiations
While it may seem like a good idea to just lowball your initial offer, this could actually have the opposite effect.
If you’re offering too little or not meeting their needs then they might reject your offer right away and move on without really thinking twice about it.
Make sure you do enough research so that you know what is fair market value for an Australian business before making any final decisions.
This way when the negotiations come around, both parties will be more willing to compromise to seal the deal quickly.
The decision to buy a business will affect you and your family for many years. It’s important to consider all aspects of the purchase before making an offer to any company.
If you want help finding your perfect fit, search now on bsale.com.au—our marketplace has an exclusive amount of listings from Australia!
The Best Part? You can save your previous searches as well, so be sure to look around before making any decisions about where to invest in yourself or your family’s future.