How to buy a business

How to buy a business
Author: Gary Johnston

How to buy a business

Written by:
Gary Johnston
gary@johnstonmarketing.com.au
Johnston Marketing

If you are buying a business there are some things you should consider

Our research over the past 15 years clearly shows:

- Business buyers seek security for their invested capital
- Return on invested capital – ROI
- Preferably high barriers to entry (minimises new competition entering the market)
- Lifestyle
- Buyers assessment of his or her`s ability to own and manage the business
- Is this the business for me?

Needless to say people purchase or establish businesses for a number of reasons.

Sea Change
Lifestyle change
Taxation breaks
Increase earning potential
Management buy outs
Or it simply may be a longing desire to succeed on “my own”
In any event there are a number of important factors that should be considered such as -
Prepare a SWOT analysis on a prospective business purchase, by considering its strengths, weaknesses, opportunities and threats.

Do you have enough working capital available?
– never go into business under capitalized, as history shows failure is imminent?
- Are you experienced in this industry
- how reliant is the business on the current owner
– can you step into his or her shoes and manage the concern properly.

Creating a business is somewhat more difficult and it usually takes a lot of time, patience and persistence to become established. Working Capital is of most importance as it could be some time before your new business opportunity “breaks even” or is in profit.

Location, location, location - how many times have you heard this saying! But it’s surprising to know that some people who fail, totally disregard this piece of precious advice. If your business opportunity is retail related then be prepared to pay for the “LOCATION” as it’s probably vital to the very success of your business. Rent’s in air conditioned regional shopping centres range from $100,000 to $300,000pa, so do your figures and take advice from your accountant.

There are a myriad of business opportunities available in the general marketplace today, many of which can be home based – which suits many business buyers and their family commitments.
Due to the ever diminishing manufacturing base in this country “Service Industry Related” businesses are very popular and should be positioned very high on your shopping list.

Establishing a business opportunity or purchasing an established business could be the most important decision of your lifetime, research the propositions, establish your suitability to own and manage a business, or are you best suited to establish a business opportunity.

In any event call or email any of the brokers that are affiliated with this web site and they will be very happy to assist you in your endeavors.

Good Luck with your business hunting and decision making processes.

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