Thinking Of Buying A Business?

Buying a business is a real process and there are numerous issues to consider before you commit to the purchase. We have put together the following list of issues to consider but we urge you to consult with our office before you sign a contract or handover any funds:

  • Understand exactly what is on offer and does the business match your needs, location, lifestyle and budget?
  • Consider why the vendor is selling and the timeline and handover required.
  • Obtain as much information about the business as possible before making an offer. Your offer should be subject to appropriate due diligence, finance approval and any regulatory approvals.
  • Due diligence is an essential part of the process and should include a thorough review of the financials to verify the revenue figures. In addition, you need to inspect the various assets and equipment included in the sale and sight all documentation regarding any leases including the premises.
  • If staff are involved you need details of their salary, next review and their skills.
  • Evaluate the future potential for the business as well as any risks or threats.
  • Obtain an independent valuation of the business.
  • Obtain specialist advice regarding the most appropriate business structure to use taking into account asset protection, estate planning, stamp duty and taxation issues including eligibility for discount capital gains tax concessions.
  • Seek professional assistance regarding finance well before purchase. Most financiers have specific policies regarding lending against goodwill, the need for collateral, the loan term, interest only periods and the fees and charges.
  • Prepare detailed cash flows to establish if you can service the loan.
  • Ensure you have all the necessary business registrations in place.

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