After buying a business, it is in the new owners’ best interest to start thinking of ways they can add value to the business which can be implemented over time. How you will adding value to a business you intend to buy is one of the questions you need to ask yourself when buying a business. There is not just one method to add value to a small business that you intend to purchase, there are many. Depending on your business, there are numerous ways to improve the performance and ultimately the profitability of the business. As the new owner shouldn’t make too many changes too quickly as the tran ..read more

Buying a business and becoming your own boss can be very exciting. Not only that, but there are many advantages to acquiring an existing business such as possible existing customer base, suppliers and experienced staff, however, there are important things to consider before making a deal with the seller. Do I need a lawyer to buy a business? Yes! Buying a business is not as simple as buying groceries. It is critical that you do your due diligence before purchasing a business and find an experienced business purchase lawyer. There are many things to consider but a business purchase lawyer can a ..read more

When enquiring about a business for sale, it is common for the seller or business broker to ask you to sign an NDA or confidentiality agreement before discussing the business’ sensitive information. What are non-disclosure agreements (NDA) and confidentiality agreements? A non-disclosure agreement (NDA) is a legally binding contract that is used in situations where sensitive information is to be shared between two or more parties. Non-disclosure agreements are also known as confidentiality agreements. By signing the agreement, the party or parties who gain access to the sensitive information a ..read more

Reasons why you should prepare your business for sale If you are looking to sell your business, it is a good idea to prepare your business prior to selling. Due to the recent pandemic, there will be many businesses up for sale so it is up to the seller to present their business in a way that makes it stand out of the crowd. As is the case with selling real estate where sellers tidy up and stage their property prior to selling, business owners hoping to sell should prepare their business for sale to help potential buyers see and understand the value of their business. Buyers will want to know y ..read more

Freehold and leasehold are common terms used in Australia when buying or selling an accommodation type of business. The terms freehold and leasehold refer to the ownership or lease of the underlying property. Before making a decision to buy a motel or bed and breakfast, it is important that you know the differences between the two terms to understand what assets are included in with the business. What does a freehold business mean when buying a business? A freehold business means that the buyer is essentially buying both the business and underlying property. If you were to purchase a freehold ..read more

What commission do business brokers normally charge sellers? It is common for business brokers to charge a commission between 5-10% of the final business selling price as well as an upfront fee for marketing or advertising. The structure of fees varies from broker to broker and can be influenced by the value of the business being sold as well as the work required to sell the business. Business brokers usually charge a commission with a higher percentage if they expect the business’s final selling price to be too low amount. It may be possible to negotiate a lower commission rate If the selling ..read more

Buying a franchise has its benefits and negatives. Like with anything in business, buying a franchise does not guarantee success. What you can get in return for buying a franchise is a system, processes, brand recognition, refined business model, economies of scale. That said, there are of course just as many drawbacks and limitations. It can be limiting, more expensive and there is the issue of perpetual royalty payments. You are essentially purchasing a business that has an established brand, business model as well as economies of scale from the franchisor, all of which has value to someone ..read more

What is goodwill? Goodwill is the intangible value of a business such as its reputation, branding, and customer loyalty, and other value that makes the business. It is what makes the purchase price of business higher than just the fair market value of all its assets less liabilities. Although goodwill is listed as an intangible asset on a balance sheet, it cannot be bought or sold separately from the business. Without the business, the goodwill does not exist. Read: ATO definition of intangibles What affects the value of the business’ goodwill? Although, not an exhaustive list, here are some t ..read more

The best ways to start a business with a small budget requires you as a business owner to leverage your network, build a business around your budget, choose your business idea wisely, avoid unnecessary expenses, save money on expenses where possible, avoid utilising expensive debts, use sweat equity and be creative with marketing. The common thinking is that starting a business is extremely capital intensive but that doesn’t have to be the case. The capital intensive nature of a business will depend on various factors such as the business model, industry, location, and the minimum overheads re ..read more

What does SAV stand for? You will often notice the commonly used acronym SAV when looking at businesses for sale. SAV stands for “stock at valuation” but what does that actually mean for someone interested in buying the business? Simply put, it is a price–or value–that is levied on the stock held at a given time by that company. Put simply SAV or stock at valuation refers to the stock value determined just prior to the sale of the business and is not included in asking price for the business. Once the stock value has been determined, the final sum that the buyer is required ..read more