Your Local Brokers Baseline Finance
Your Local Brokers Baseline Finance
A substantial portion of business owners in Australia are nearing retirement age. This means that in the coming years, many businesses will need to find new owners.
Historically, a decent proportion of businesses were handed down to the next generation, but that’s happening less often. So, is there an opportunity to take advantage of this transition—and secure yourself a well-oiled, functioning machine?
Starting a business from scratch is incredibly hard—just ask anyone who has done it. The statistics say the odds are heavily stacked against you too.
There are four major reasons to consider buying an existing business:
It’s not all sunshine and butterflies. Once you’ve decided to buy a business, that’s often when the hard work begins. It makes sense to be sure it’s the right fit before you pull the trigger.
Generally speaking, these two are inextricably linked. The stronger and more stable the business, the higher its value. A thorough financial analysis should cover historical performance as well as forward orders (if possible). You’re paying money for a working machine—make sure the engine actually starts.
Are you buying a blockbuster store in the Netflix age? Is the industry of your target business declining or on the cusp of wipeout? Is there so much competition that it’s hard to stand out and outperform? On the flip side, is the industry dominated by large players who control the key terms?
Are you buying the shares of the business, or just the assets? It matters—a lot. Buying shares means you inherit all the gremlins hiding in the business’s closet. Buying the assets gives you a cleaner start. Both have pros and cons, and this is a conversation best had with your accountant.
You’re buying the business because it works. Something about it resonates with staff, and that’s often a big part of its success. Introducing new ownership and new ideas can be positive, but it can also dismantle what’s working. Tread carefully.
Buying a business can be a smart way to fast-track your success—but only if you do the right homework. Take your time, dig into the numbers, and don’t be afraid to walk away if the fit isn’t right. The best deal is the one that helps you grow without keeping you up at night.
If you’re considering it, surround yourself with the right people—accountants, advisors, and financiers—who can help you avoid the traps. At Baseline Finance, we’ve helped plenty of buyers structure their finance so they can focus on running the business, not stressing about the bank.
The information provided on this site is on the understanding that it is for illustrative and discussion purposes only. Whilst all care and attention is taken in its preparation any party seeking to rely on its content or otherwise should make their own enquiries and research to ensure its relevance to your specific personal and business requirements and circumstances. Terms, conditions, fees and charges may apply. Normal lending criteria apply. Rates subject to change. Approved applicants only.
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