Are you stuck in a rut professionally? I know it sounds cliché, but if you are ‘working for the man’, 9 to 5 and absolutely hate it, then don’t look for a new job, look for your own business!
It’s every Australian’s dream to be their own boss, own their own business and work their own hours. And with the buying and selling business for sale marketplace booming, more and more Australian’s are ‘giving it a go!’
Where Do I look for a Business for Sale?
News papers and magazines were once the prime choice of advertising when small business owners were selling a business, but these days you won’t find a bigger variety of small business opportunities online! All one needs to do is Google search targeted, relevant terms such and browse through the top 2 or 3 sites. These sites include easy to use search tools helping you connect with a business in your price range, industry and location.
In most cases, you can also make direct contact with the business owner as private business listings are booming and have dominated over the past 5-6 years.
What Type of Business Should I look for?
The next thing to consider once you have decided to buy a business is the type of business should I be looking for.
- Location – It’s always a good idea to start your search in a location that suits your lifestyle. Unless you are prepared to move your entire life including pulling kids out of school, moving away from family and friends, etc, you are best searching in your preferred location. Unless the business is a home based business opportunity like an online business. In that case there is no need to worry about location.
- Price Range – This one is fairly straight forward. 99.9% of business buyers will need some kind of finance to help fund their new business. It’s always a great idea to have a ball park figure of what your budget will allow you to purchase. This way you will know what your financial limits are without over capitalising and wasting every ones times.
- Industry – Before you start randomly searching for available businesses, have a real good think about what it is exactly that interests you. What is your passion? Investing in a business which specialises in a niche that you are interested in or have had previous knowledge and experience in is always a huge bonus. It really makes life a lot easier when you are the owner of a business that you actually love.
If you prepare in advance before starting your search, you can speed up the process and connect with a business that will suit your needs and give you the best job satisfaction.
I Found a Business That’s Perfect, Now What?
Once you have found a business that suits your needs, location, industry and price range, it’s time to find out how the business is traveling. Hitting the vender up with the following question will help identify a good business from a bad business:
- Why is the owner selling?
- What is the current cash flow?
- Can you see the profit and loss statements (for last 3 years minimum)?
- How was the business valued?
- Are there any leases?
- Who are the main suppliers (and customers)?
- List of current employees and their wages
- How many hours per week does the current owner work to maintain the figures?
- Does a business plan exist?
Getting the answers to these questions will really expose the business for both it’s positive and negative attributes, allowing you to make a logical decision on whether or not you should proceed with the acquisition.
Don’t Make an Offer Until………
Before you start throwing offers around and most definitely before making any kind of financial commitment, it is crucial that you get your accountant to take a look at the financials of the business. Your accountant will almost certainly request the actual lodged tax returns of the business and not personal documentation from the owner as these can be tampered with.
Hiring a solicitor or Lawyer to to review the contract of sale will also eliminate any hidden surprises with leases, outstanding law suits, suppliers, landlords, etc.
Due Diligence
Doing your due diligence is a must prior to buying any business and could save you from losing thousands of dollars! Always buy an existing business based on these points and never on emotion. Following these suggestions will keep you on the right track when buying a business.