One of our offerings at Pragmatic Training is providing business skills that help you advance within your industry. For existing business owners a large part of expansion is related to acquisition. We offer acquisition training among other key business skills training.

Despite all the talk these days about older-generation and baby-boomer business owners selling their stores or offices, it may still be challenging to locate a viable business to purchase in many parts of Australia. While we have intimate experience with Queensland, in particular Brisbane and the Sunshine Coast, we believe these tips can help anyone start with the right foot forward when looking to buy a business.

However because it isn’t as easy as walking into a shop and picking a business off the shelf, it’s critical to exercise patience and exercise caution. Once you’ve identified a target business you think will work well for you, you should conduct extensive research. Make sure you know exactly what you’re buying and that you’re not spending too much. Frequently, consulting an expert is beneficial as they might be able to help you notice some of the hidden disadvantages.

Finding a business for sale

Here are some resources that are a great starting point in your search for a business for sale.

Business Brokers

There’s a reason this one is at the top of our list. Brokers assist transactions by serving as an intermediary between buyers and sellers of private enterprises. In bigger areas, like the Sunshine Coast or Brisbane, it’s easy to find brokers who have knowledge of the area and business needs.

Although we are Brisbane based, we refer all of our clients wanting to expand up the north coast to BizBrokers. BizBrokers are the best brokers to sell your business up at the coast and if you’re looking to buy sunshine coast businesses then BizBrokers should be your go-to brokers. They also have their own range of listing on their site making the process of finding a business even easier. They’ve helped us find a business that matched our clientele perfectly and we highly recommend them to anyone near the Sunshine Coast and Maroochydore region.

Accountants and attorneys

These experts work with business owners and can provide leads for organisations that are either for sale or thinking about selling.

Bankers

Account managers work with business owners as well and are excellent resources for recommendations. They could be motivated to help firms sell because they want to fund the deal and keep the business owners as clients.

Commercial real estate agents

These agents are much harder to find but they could be aware of company owners looking to sell. Along with selling real estate, some agents also market companies.

Bankruptcy trustees

Trustees may be aware of profitable companies that have run into financial trouble for a number of reasons, including poor management.

Financing

You’ll probably need to set up finance once you’ve chosen a company to acquire. Your buy should be financed in a method that optimises your repayment options.

In addition to your personal investment, you will normally look for a term loan from a bank that is secured by the company’s assets. Buyers frequently ask the current owner for financing as well. For a portion of the purchase price, the vendor accepts a note in lieu of cash, which is later paid off. An example of this is a vendor takeback.

Consider expansion and company transition capital to complete the financing since it offers flexible terms and typically needs little to no personal guarantees.

Plan your purchases to prevent a shortage.

When owning a firm, it’s crucial to prepare carefully so that you don’t suddenly require more money because something was missed or wasn’t taken into account.

Your preparations should include a business plan you can show to bankers and investors. Even if the business has been extremely profitable under the previous management, financiers will want to know how you intend to run the company.

What your banker wants to know

Here are some of the points your financial institution will want to know.

How is the business performing? How profitable is it?

Can you supply the financial statements of the company being acquired?

Why is the owner selling the business?

How was the proposed price arrived at? For example, if the price is $100,000, does this amount include equipment, working capital, inventory, etc.

What are your plans for the business? Do you need additional financing to expand or implement changes?

Have you worked in the company being acquired? If so, in what position? If not, do you have experience in the same industry?