Buying an established business?
If you plan to buy an existing business, carefully analyse both the advantages and disadvantages. One advantage is that a good business history can increase the likelihood of a successful operation and ensure that finance is easier to obtain. Potential disadvantages can be overestimating the goodwill figure and a poor public image inherited from the previous owner.
As a prospective business owner you should determine the current worth of the business and its future prospects. Some important considerations are:
- Vendor - reason for sale of business
- Sales - patterns, trends, customerbase, current suppliers
- Costs - fixed and variable costs, staff costs
- Profits - analyse financial records, future cash flow and profitability
- Assets - identify and check all assets, including intellectual property and leasing arrangements
- Liabilities - outstanding debts, refunds and warranties
- Purchase agreement - review carefully
- Tax - GST, Capital Gains Tax, stamp duty implications
- Legal issues - leases, business structure
For advice and protection in buying a business we suggest that you seek the services of a solicitor, accountant or business adviser. You may wish to contact our partners below, who have expertise in this area:
BDO Kendalls
Non Executive Management (NEM)
The Retail Doctor
For further helpful information...
What to do...
See what advice and support is available in your state or territory.
Source: http://www.business.gov.au
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