Thinking Of Buying A Business?

Our team of business advisors, accountants and marketing consultants can help to review the business you are looking to purchase.  With decades of experience across many industries we can help with due diligence, valuation, growth potential, bank loan documents and many other areas. Call our team for an initial chat to see what the next steps are.

Here Some Things You Should Carefully Consider

If you are thinking of buying a business that’s already established, then there are some factors that you should really think carefully about before you make the final leap. Buying an already established business comes with its pros and cons. Running a successful business is not just about working for yourself, it’s about having the right skills to manage it and some understanding about the industry you want to get into.

Before you close that deal, here are some things that should be clear to you.

Carry out proper research

Carry out thorough research is the first step in buying a business. Here are some of the things that you should analyse during the research.

• Financial records
• Debt checks
• Customers and suppliers contracts
• Tax compliance
• Records of employees
• The corporate structure of the business seller
• Records of the business
• Business assets
• Legal adherence

If you do not carry out the necessary research, you can easily end up buying a business that has many financial issues, is selling assets that do not legally belong to it and other problems that can be avoided if only you take your time to thoroughly conduct research. Additionally, good research will provide you with the real value of your business and you will be able to review whether you are paying too much or the right amount for the business.

Is buying the business the best option?

Why do you want to purchase a business rather than setting up from scratch. Is it because the business has assets that you are interested in? Is it because of the brand reputation? Is it the customer base? There are many questions you need to ask and compare to see whether it’s better to just establish your own business. Our team can help to review the business purchase for you.

Get to know about sales and payroll taxes

If you purchase assets of a business, the state tax authority can trace you if they realize the seller had not paid tax for sales, payroll, or any other business taxes. If the business seller had other employees apart from himself it may be worth asking them if they were using a payroll service and make sure the employment tax payments are up to date. You can then request the state tax authority to give a clearance letter that the business seller is up to date with their taxes on the closing date. This may take a little more time, but you will be grateful you did it.

Get the necessary advice from an accountant and a lawyer

When you are buying a business, there are several legal and taxation implications. Getting the necessary help from Leenane Templeton and a lawyer before signing the contract can save you a lot of legal and tax problems.

Can you assume the seller’s lease?

Is the business seller leasing out the property where the business is currently located? If so, then you should try and find out how much time is left on the lease term and whether the landlord can let you assume the seller’s lease as it is without any increase in the rent amount. If the lease has less than two years to run, then it might be good to negotiate a new lease with a longer term. The location of a business is important and changing it may have adverse effects.

The employees

Before you buy an already running business, ensure the key employees are willing to continue working since they’re the ones who deal with customers on a daily basis and understand any processes, machinery, software or systems. A lot of sellers don’t tell their employees that the business is up for sale since they are afraid that they may quit in large numbers. If you wish to take the employees, then you should be aware of their employment contracts and what they expect from you as the new owner.

Before buying a business in Australia, you should be prepared to carry out thorough research and due diligence.