When determining your business purchase it is infinitely better in the long term to select an industry that you have a passion for. Passion and enjoyment of a subject will naturally convert into a positive momentum and give you inspiration when the times are tough.
Speaking of tough; hardened business owners will definitely agree that the business world, especially to newcomers, is extremely tough. The highs are exhilarating and the lows frustrating; this is why having a passion can help push you through.
Aside from your skills and passion, you need to review the business you are potentially purchasing free from emotion and through a highly analytical viewpoint. The following is a list of standard ‘essential’ items to consider when analysing an existing business:
> Vendor - reason for sale of business
> Sales - patterns, trends, customer base, 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.
*list courtesy of Australian Government Business Resource
In order to cover the above more effectively; seeking out trusted, professional staff that are experienced in business brokerage, financing and legal issues will also ensure you make an informed decision. For further information contact Alert Property Group today.