Purchasing a business without a business plan is a risky step, so your first step should be to conduct a SWOT analysis to understand your financial position. Feel free to download a copy of such a test by clicking here. You may wish to email or fax these back to us on a strictly confidential basis. Our brokers will be happy to discuss these tests with you as this will help us to meet your needs and help you purchase your desired business.
Consider your start-up options
Discuss with your broker your background, experience, and credentials so they can match you with businesses according to your preferences. There are a wide range of options, including franchises or family businesses. You should also consider whether the business should be purchased on your own or with a partner.
Make necessary funding arrangements
Maintain a healthy and liquid cash flow so as to service any unexpected losses or additional fees that you may incur. By carrying out market and financial analysis, this will clearly define your position, and evaluate your needs to source any further funds or working capital. To assist you in defining your financial position, please download our Asset & Liability test here.
Buying an existing business
When purchasing an existing business, you might also be purchasing or taking over the following:
- Material assets, for example equipment, the premises, furniture and fittings etc.
- Legal and contractual rights
- And any other relevant property
Whether the purchased business will include these is something to negotiate with the vendor. You may also want to take note of why the business is for sale and assess how valid these reasons are. It can be helpful to speak to vendors who have handled the type of business you are intending to purchase.
Create a shortlist of potential businesses and work out the feasibility and potentials of each business. To figure out a business’ desirability, look into the following areas:
- The business idea including inventions and opportunities
- The risks and responsibilities involved
- Will you be fully committed to the business?
- What is a realistic expectation of the outcome from purchasing this business?
- Is the business well-suited and in accordance to my personal values and life goals?
Choose the right business location and site
Decide on your preference of location and site, for example, is it close to your house, in small town main streets, regional shopping centers, the CBD, local shopping centers, highways, industrial areas, small shopping malls etc. It is advised that you attend shop visits to visualize and observe performance, conditions of the premise, suitability to your needs, volume of passing traffic, accessibility, expansion potentials as well as how the business operates. This will assist you in your evaluation of the business and estimate an expected value. It will also provide you with an idea of the size of the local market in the area is and its potential growth.
Professional help & creating a network of advisors
Seek professional advice from solicitors, accountants and brokers to attain the best results. All of our brokers are seasoned professionals, who have access to an extensive network of contacts, and understand all aspects of the buying process. They can assist you in finding a suitable team of advisers by recommending experienced professionals who have dealt with numerous business transitions similar to yours.
Contractual and legal arrangements
Do your own research and make sure you understand your rights and responsibilities. It is also important to understand the business structure in which the business comes under, i.e. a sole proprietor, partnership or company. This will enable you to better plan staffing and other business activities.