WHY DO YOU WANT TO BUY A BUSINESS?
Is it for:

• Future financial security - building your own future?
• Job stability, as you will be the boss?
• Unlimited earning potential?
• Using your current skills for your own benefit?
• Providing other family members with a job?
• Building a strong business for your family to takeover in the future?
• A change in lifestyle?
• A recent arrival in Australia as a Business Migrant on a 457 Business Migration Visa?
• You have inherited some money or just won a Gold Lotto prize and want to own and run your own business?
• A business owner that has just sold their business and are looking for something larger or smaller to own?
• An investor looking for a fully managed business which offers a much higher return on their investment than the commercial / residential property and less risk than the stock market.
  

Hints For Buying a Business

• Think carefully about the type of business best suited to your abilities.
• What are your skills and can you learn new skills easily.
• Would it be better to purchase an existing business or start your own business.
• You need to know exactly how much you will need to purchase a business, and take into consideration all of your acquisition costs such as:
  
  
  1. Purchase price
  2. Stock at Invoice Cost (SAV: Stock at Value)
  3. Bank guarantees or bonds required for the lease of the premises (can be three to four months of the total current rent in a shopping centre)
  4. Stamp Duty
  5. Legal fees
  6. Accountant's fees
  7. Working Capital

  8. Debtors and Creditors
     When purchasing a business you not only begin working for yourself, but you also assume other substantial obligations such as:

     1. The lease for the business premises and all of the obligations under the terms of the lease. You must have legal advice on the terms of the existing or new lease for the premises before signing any lease commitments.
     2. Employees- Wage accounting, Group Tax, Superannuation, Workers Compensation, staff training, disputes, staff dismissals etc.
        (3) Detailed accounting records for the business including monthly and / or quarterly BAS Reports for the GST.
     3. Detailed accounting records for the business including monthly and / or quarterly BAS Reports for the GST.
     4. Collecting outstanding accounts

Many of the more substantial businesses for sale will have at least three years of taxation financials available for inspection through your accountant. You should "expect" to be presented with some of the basic business information including:

• Rent and Lease details
• Staffing information
• The Financial Trading Statement and Profit and Loss Statement of the business.
  
  NOTE: It is a common practice to be asked to sign a Confidentiality Agreement prior to the agent or the Seller disclosing their business details. The Seller's Balance Sheets are normally provided when your serious interest in the business has been noted by the Seller and a further inspection of the books and records are required to formalize your potential offer as a Purchaser.

FINANCIAL INFORMATION

The more substantial businesses (higher priced and profitable) will have their Financial Statements ready and available for inspections. As part of any Business Contract a "Due Diligence" period is normally allowed for a purchaser with their accountant to verify the financial information provided to their full satisfaction.

Many high cashflow "cash" businesses will offer a' trial period' to verify the actual averaged level of sales over a 2-3 week period as part of Business Contract. You should ensure that the trial period covers a normal trading period as many businesses can have their sales affected (+ or -) by school holidays, the different seasons, being closed for public holidays, etc.