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Buying An Established Business

I found an interesting article today on business.gov.au that provided a simple overview of what to look for when Buying an Established Business. The overview provided a simple analysis of some of the key variables to consider in the process and is a good start for buyers new to the process.

The article was as follows:

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, 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.

For advice and protection in buying a business we suggest that you seek the services of a solicitor, accountant or business adviser.

This post was originally published on business.gov.au .

If you would like to discuss this article in further detail, please contact Attain Business Brokers on 1300 ATTAIN (1300 288 246).

If you do not yet have a Solicitor or an Accountant with pharmacy experience, find one today in our Services Directory.

 

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