Buying A Business

Everything Business Buyers Need to Know

Connecting Buyers To Business

Buying a business can be a process. How good this experience is depends on so many things from the complexity of the business, the level of support a buyer gets with their advisors but most importantly how well the broker manages the process. 

At Merchant Business Brokers we see things a little differently than some. We work very closely with buyers looking after them right from the start. If we can’t have a buyer be confident and happy with our process then what good are we to the seller. A good relationship between broker and buyer can make or break a deal. Getting to know the buyer is part of our confidentiality process. We also go beyond and qualify the buyer not as a test but trying to learn and establish what types of businesses may suit.

It is also very important that our sellers (who often approve the confidentiality agreement) are provided some basic understanding of what the buyers previous skills and experience has been. In some cases this is a direct and obvious match. On other occasions the reason and ability for the buyer to enquire on a business may take greater understanding or foresight. An experienced business broker will manage this process for each business and each potential buyer.

The sooner we establish an enquiry is a genuine and transparent potential buyer the sooner information is provided and the process begins. All deals start with this simple but very important part of the process.

Merchants team are a trusted business brokerage and members of the professional industry body – Australian Institute of Business brokers (AIBB). We are 5 star accredited and multi award winning. 

At Merchant, our aim is to be the best at connecting buyers to sellers that creates opportunity, wealth, fulfill dreams and enrich lives.

Are you ready to start a conversation with Merchant Business Brokers?

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Buying a Business - buying a business

A small-to-medium enterprise (SME) can be one of the greatest assets a person can own and provide ongoing market leading returns on the capital outlay and also a capital gain (or profit) on sale of the investment. On average a residential investment property can provide an ongoing return on investment (ROI) typically at around 3%-4%. A commercial or industrial property around 6%-7%. A business can offer on average around 30%-40% ROI.

Most successful business owners can generally be known for working well outside of normal hours and doing whatever it takes, at least, for quite some time until they have built the business and the people around them well enough to then have some flexibility and control over their time.

People have different needs at different times in their lives and often look for different things so it is important to know why you want to get into business. Are you escaping a temporary issue in your life or are you you driven to be a successful business owner and prepared to work longer hours and risk your financial position.

It’s important to find the right business (independent or franchise) that suits your family, your lifestyle, your needs, match your skill set, work experience and your budget/income requirements. Make sure you are buying a business for the right reasons and at the right time in your life. You need to be self aware and ask yourself if you have got what it takes?

Attitude, commitment and certain skill sets you have can impact on your level of success and may make or break your business ownership experience.

If you have decided to start looking for a business and want to be taken serious by brokers and sellers be serious and communicate your position. Ideally you should have a good idea of what you can borrow and understand your financial position and timing. This may involve talking with your finance broker, bank and accountant.

There are perhaps two initial aspects that you should get some clarity on before starting the process of searching for a business. What are your strengths? What can I afford to buy?

Example: A banker is not logically going to be good at running an engineering business or a retail trained person perhaps not so good at excavating/building pools or a plant mechanic good at running a restaurant. It is a more logical and realistic path to buy a business that matches your skill sets and your experience.

A good potential buyer may not know exactly what they will end up buying but will have a really good idea of their ability to buy (or an estimate of borrowing capacity) and a good sense of self. They will know what skills and experience might translate into a business. There are many business types that can suit a buyers experience and brokers like us can really help what is on the market, what might be coming on or help identify what other opportunities the buyer could and should look our for.

Not many people are capable of successfully owning and managing a business. Having the courage and financial capacity to buy a business is not enough. Being self aware and knowing your skills and work experience is important but also not enough. You will be coming into a new environment and need to have the ability to manage people and must be able to preserve and hopefully improve culture and relationships with staff, suppliers and customers.

As a potential buyer you should have fresh eyes and fresh ideas.  Look for weaknesses in the business that you can fix or  work on. Opportunity is what a good buyer will seek. If you have ideas and possibilities to bring to the business engaging with the existing staff and having them share the vision and help can be great for culture and productivity. 

Leadership and management should be an inherent skill that every buyer brings to the business especially when the staff are looking to respect and trust you.

We have experienced and witnessed many different scenarios and the most successful buyers are genuine and honest people not just with the broker and the seller but most importantly to themselves.

A good buyer will identify and know their skills are and how they can use them in the business. They will also know their weaknesses and manage these. It might be utilising existing staff, a book keeper or accountant, business coach or by bringing in additional people with the skills required to manage and drive other areas of the business.

We get very excited when we find these types of buyers. Sellers want the business to succeed and continue often as a legacy to what they built and want the staff to continue their journey within the business. Buyers want a smooth training and transition period and should have checklists and take notes in preparation for settlement and beyond. We as brokers feel the greatest satisfaction and successful when both parties are happy with the process and result.

Buying a business blog posts

We’ve created a range of articles to help you understand the process of buying a business. This includes information about the steps involved and how to decide which business is right for you.

Buying a Business - buying a business

What Type of Business is Right for Me?

What type of businesses should I be looking at?(how do I know what is out there and suitable?) Know your strengths and know what you enjoy. This means that the skills you have developed or learnt in some way match those required in the business you end up buying and

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Buying a Business - buying a business

How to make an offer on a business

What is the process if I am interested and potentially heading towards making an offer?(steps to getting ready to make an offer) Okay, you have been through quite a process so far in looking more deeply at a business you like. You have sought advice perhaps from your accountant, know

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Buying a Business - buying a business

Where to Find Businesses for Sale

Finding a business for sale may depend on what type of business you are looking for and what price your budget will extend to. Here are some places and ways you might find a business for sale; 1. Key word search via your internet browser for example: café for sale

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Buying a Business - buying a business

How to Engage the Business Broker or Business Owner

How to engage the broker or the owner? Be transparent with the broker and owner – offering a little about yourself Ask fair dinkum questions that the answers will help you make a decision to withdraw or progress Communicate your feedback as honestly and quickly as you can to the

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Buying a Business - buying a business

What Questions Should I Ask When Buying a Business

What should I do with the information and what questions should I ask? With any enquiry you make on a business the agent should have you complete a confidentiality agreement if not straight away at least after providing you with some general information. At Merchant Business Brokers buyers can register

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