Owning a business can be a great career option. You get to run your own show, reap the rewards of your efforts, back
yourself and enjoy the flexibility and status of being your own boss. All this can be hugely rewarding.
“Buying an existing business or franchise at the right price has some huge advantages over starting a business from
scratch - for a start much of the hard work has been done,”
says Richard O’Brien from the New Zealand Business for Sale
There are a host of reasons why it makes economic sense to buy an existing business. You skip the risky start-up phase
and the high set-up costs, and the need to develop a winning product or service. You also benefit from an existing
customers and from an established business model and systems.
Buying an existing business eliminates many of the headaches involved in getting a start-up off the ground. Despite the
benefits, existing businesses are rarely perfect, so it’s important to do your homework and not overlook any faults.
Most established businesses come with an established customer base and cashflow; they have proven products and/or
services, proven business systems and processes, trained staff, and an existing reputation.
Buying an existing business allows you to focus on growing the business from day one, rather than simply trying to
ensure your business idea is viable.Firstly establish what you want in a business?
Determine what you are after. Are you looking for a lifestyle business to provide a living income, something to grow and
develop, or to add to your current business? Make sure it’s something you can get passionate about and that you have the
necessary skills to add value to the business.Work out your budget
Work out what you can afford. Your budget is often determined by the business’s cashflow, your cash reserves, equity you
may borrow against, and the bank and/or vendor finance. It’s important to ensure you allow for working capital and some
cash reserves.Search for the right business
Work out your must-haves, and like-to-haves. Calculate what income you will be needing, and which industries you are
most interested in.
With your criteria, search the key internet sites, such as the New Zealand business for sale website nzbizbuysell
; chat with business brokers
that work in your area of interest, and network with anyone you feel that could be helpful.Do your research and evaluate
It pays to research the industry and read everything you can so you build your knowledge and ask the right questions to
get the facts for making a well-informed decision. You will need to look at lots of businesses; so search and enquire
about many, and ask your questions - sticking to your criteria to stay on track.Seek professional advice
Once you find a business that ticks all the boxes, consult with your solicitor and accountant to get their input and to
hopefully help draw up an offer. Use a business broker, accountant or lawyer to assist you with the business buying
process to ensure you get it right. Your offer will usually be conditional upon certain aspects being verified and
satisfied as more information is shared - your accountant and lawyer are key here.
Preparation and knowledge is key to buying a business
that will succeed and will best work for you.