Buy a Business

So you are thinking of owning your own business. Perhaps you are sick of working for someone else, perhaps it is a drive to be in control of your own destiny, perhaps you see that you can generate a far greater return by owning and operating a business than in other investment categories such as shares or property. than either working for someone else or other investments.

Whatever your rationale, your biggest question is – How much RISK am I comfortable with, in order to get that flexibility, return or control?

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You need to understand your appetite for risk and then work to minimise that risk in the buying process.

Why do you want to buy a business?

As above. The answers will assist you in defining the business you should target.

What do you see as the main criteria for the business that you want?

How far will you travel to the right business?

(Buyers who are “completely open” about the type of business they are seeking, rarely end up buying!)

How much can you invest?

  • How much you need to earn from a business.
  • How much capital do you have to use?
  • What security do you have to access finance?

Franchise or Non franchise?

Franchise businesses are well suited to people with no previous business experience. By definition, franchised businesses are standardised models with well established processes and systems of operation and a franchisor who provides marketing support. However, you pay for this support and standardisation, primarily in control, and also in price. Franchised businesses have less risk but less upside than non-franchised businesses. There is also less choice available in franchised businesses, as again by nature they need to be scaleable and systemised.

Will you be an Owner Operator or Investor?

Obviously if you are an investor only the business will need to come with management which generally puts it in the higher price bracket – over $1million. If you will be running it yourself, then your own experience and skills are relevant in determining what type of business you buy. Ideally you wouldn’t buy a manufacturing business unless you had experience in manufacturing or had specific technical skills. On the other hand, no specific technical experience is probably required to run a retail or distribution business. Having an interest in the product or service is valuable if you are to be working in the business. The more genuine or even passionate you are about your subject matter the more motivated you will likely be and your customers and staff will see this positively.

Now you are ready to buy, let us help you find the right business