Buying a business is always easier and safer than starting one from scratch. So let the seasoned entrepreneurs take the risk, develop the market, and find out what works and what doesn’t.
In buying a business that already exists you get:
- A customer base – this means cash flow from day one.
- Accepted products and/or services. They have already been developed.
- Experienced and skilled staff who understand the business.
- Systems that keep the customers coming and the cash flowing.
- History – the previous owner has operated this business and will have financial records on its performance.
Owning and operating a business will take up a significant chunk of your time, so when searching for a business opportunity, perhaps the most important factor to consider is that it must be something that you enjoy doing. Secondly, if you have specific skills then by using these you are adding value to the business – although some skills can be imported or learnt on the job.
To find the right business to buy regularly check what’s on offer on internet sites like nzbizbuysell, read newspapers and contact key business brokers who operate in your area of interest. If you are wanting something specific, then get in touch with the associated groups and let them know you are interested in buying a business. Also you can ask your accountant or anyone else who may have contact with potential business sellers. Be patient – identifying the right business to buy can take time.
Search the Internet
You will find most listings online – go online and search the key New Zealand business for sale sites. These will usually provide useful information and resources along with descriptive opportunities of what’s on offer; usually you can specify the type of business, it’s location and your price range. If you cannot find what you are looking for, then maybe you can place a free ad under a Business Wanted section. You could also check out any Business Broker Directory and call one of the listed brokers and ask them if they have any other listings that haven’t made it to market yet.
Contact a Business Broker
While business brokers are mosty used in selling business; they will be happy to discuss your needs as a business buyer and will generally be working on new listings that haven’t as yet been listed on the market. Some brokers will specialise in a particular area and will be able to offer industry advice and insights. Remember that the broker works for the seller, and that the better the sale price, the better their commission. Talk to several brokers to gain a complete picture on whats on offer in your area of interest.
Check out Print Media
While the classified section of local newspapers are diminishing, they are still used by some. Also check out some of the Industries’ trade magazines as these can also run relevant business opportunities. Often the businesses advertised don’t go into much detail and you will need to get busy on the phone to filter out those that aren’t suitable.
Do your Homework
Be prepared and have a list of key questions ready. Find out exactly what they are selling, what the market is, the opportunity, why they are selling and the asking price.
The following is a brief list of 10 things to know before you buy a business:
- Are you business ready? Understand your skills, strengths and weaknesses.
- Is the business is in an industry you have or can gain experience in.
- Is there a sound market now and tomorrow for the business?
- Who are the competitors?
- Who are the key customers? What do they represent?
- What are the relationships and contractual arrangements?
- Why is the business for sale? How profitable is it?
- Are all contracts, employment matters and IP legally sound?
- Is the price is fair and reasonable?
- What legal structure you will use to operate the business?
Owning a business can be highly rewarding and financially advantageous, you get to decide when and how long you work, who you work with. When buying a business, make sure its something that you really want to do, something you are passionate about, have a vision for and have the necessary skills to add value to. In buying any business, always do your homework and consult with professionals.
Read the complete list of the 10 things to ask before buying a business.
Buying a Business Video
A 3 minute video on what you need to know before you Buy a BusinessHow to Buy a Business,