How to search for the right business for sale in Brisbane
Brisbane is one of the major business hubs in Australia and one of the fastest growing state economies. It is the capital city of Queensland, Australia. The economy has grown steadily over recent years with industries such as IT, financial services, and manufacturing industries. The city, with a population of 2 million, offers many opportunities to those looking to operate the business. The main business district is located near the original European settlement that was built in 1825. Tourism counts for as one of the biggest business industries in Brisbane.
Brisbane provides a free, supportive, reliable and cost-competitive business environment conducive for investors.
There are several advantages of buying and already existing and running a business. Staff, customers, and suppliers can be quickly transferred and it also saves the time and money involved in setting up a business from scratch. Buying a business is less risky than starting a new one, also financial institutions or banks often lend money easily in case an existing business unit is being bought. Buying a business also ensures transferring skilled employees, customer base, etc. With these advantages, a few disadvantages follow as well such as, a large amount of investment might be needed to buy and repair old machinery, staff having morale etc.
Searching for a business comprises of two steps, first to find the business that fits the entrepreneurs dream and secondly to evaluate the business as selected.
There are two optimal ways to search for the best option, namely, self-assessment or hiring business brokers.
When an entrepreneur decides to buy a business after assessing the market on his own, then, while deciding, following are the key areas which have to be studied in detail;
- Market Analysis: The industry/market which is booming and its growth trend over a specified number of years.
- Costs Analysis: Ability to control operating and other costs. Analyzing both controllable and non-controllable costs.
- Competition Analysis: Ability of the market to sustain current level of competition.
- Geographical Analysis: Identifying the areas where an entrepreneur wants to locate his business.
A detailed checklist should be prepared while an entrepreneur is considering to buy a business. This checklist will help conduct a due diligence and ensure that the relevant & important information is available with the entrepreneur before the decision to seal the deal is taken. Through this process, the entrepreneur gets a perspective on the business operations, financials, legal and tax compliance, intellectual property, assets etc. It is a complex and a time-consuming process. Each and every minute detail is to be studied. As it is a serious, valuable and a long term investment, it is advisable to take professional guidance and thus hire a business broker. However, networking with actual business owners might prove be more effective than relying on middlemen like brokers. Trade letters, classified ads, and local business publications are also other resources of searching for options.
Hiring a Business Broker is a wise decision while searching for a business to buy in Brisbane. A business broker is an agent to facilitate the buying and selling process for business owners. They know the market inside out and also offer professional insight as they carry suitable experience in purchasing a business. Paperwork is simplified, owing to their experience. A full-service business broker too can provide professional guidance while searching for a suitable business to buy. They thoroughly screen businesses and compile a Business Information Profile which can be matched to a specific search criteria.
Additionally an accountant can be hired to assist in understanding the matters pertaining to taxation, a legal counsel to learn about the statutory compliances etc. An entrepreneur must give a brief about his background, history, financial ability to buy a business, and overall experience to the business broker. This will help the broker instead in finding the right opportunity for the entrepreneur in turn. After the confidentiality agreement is signed with the broker, a list of businesses meeting the buyer’s needs, are presented for review. Negotiations are lastly, the most important aspect of buying a business in which the brokers assist. They ensure that both the buyer and seller remain focused and the deal is concluded smoothly.
Business brokers too have certain drawbacks if hired, following are a few as highlighted:
- There is a service fee charged by brokers, 5 to 10 percent of the purchase price.
- There is lack of control from the entrepreneur’s perspective.
- At times, there might be a pressure to buy a business or accept a contract even when one is not convinced.
Before a business broker is finalized, following few aspects need to be checked and compared as Brisbane has lot many business brokers offering such services.
- Fees structure of the broker
- Field of specialization
- Major deals that they have helped materialized in the past
- Have they ever owned a business themselves
- Number of clients, currently on their list
It is imperative to note that a broker must have dealt with the kind of business the entrepreneur wants to buy, same or approximately the same size, and has knowledge of the business owner’s business type. Usually, sellers do not make the news of selling their business public, hence it becomes difficult to search for an apt business unit to buy and therefore business brokers prove to be helpful.
Out of the options as suggested by the broker, assessing your own level of experience, the type of business we want, and details of financials etc.
The buyers have an option of approaching their contacts in the industry, other business owners or join the business network groups in order to find the optimum business setup to buy, apart from the above two options. Buyers can run their own advertisement and invite nominations. Whether an entrepreneur decides to go with a broker or on his own, it is essential that his acquisition team is ready comprising of a legal counsel, an accountant, and a banker. The acquisition team usually gets involved after the preliminary analysis as they examine the potential and calculate the purchase price to be quoted. Arriving at a fair price is challenging as the buyer and seller both hold a different view point. Buyers should not be in a hurry to conclude the deal while buying as this can affect the price of the business in consideration. One should take time, evaluate and then quote a price. Mistakes like failure in verifying all data, buying all receivables, treating the seller unfairly should be avoided.