Be Your Own Boss
Have you been dreaming of becoming your own boss?
There are of course many upsides to owning your own business. Are you considering the shift from employee to business owner? Or perhaps you are looking to expand your current business by purchasing a complementary or competitors’ business.
Here are our top 5 tips for purchasers to consider when deciding to buy a business in New Zealand:
Do your homework: This involves understanding your own skills, interests, and financial resources. It also means thoroughly researching the business, the industry it trades in and its competitors. Look for a business with a strong track record that aligns with your goals.
Seek professional help: There are many complexities to consider when buying a business how employees are managed and transferred, the lease agreements and stock are but a few. So don't go it alone. Consult with a qualified lawyer and accountant experienced in business transactions. They can help identify potential risks and ensure a smooth buying process. A business broker can also be valuable for navigating the search and negotiation stages.
Financials are key: Get a clear picture of the business's financial health. This includes profitability, cash flow, and debt. Factor in ongoing operational costs like rent, utility costs, wages, and inventory to understand the true financial picture.
Due diligence is essential: Don't rely solely on what the seller tells you. Carefully examine the business's financial records, legal documents, and the businesses market position. This will help you uncover any hidden issues that could affect the value and future profitability of the business.
Negotiate effectively: Be prepared to negotiate the purchase price and terms of the sale. Consider the business's overall condition and future prospects when making your offer. Remember, buying a business is a significant investment. The more work you can do before the purchase to make sure you have the right settlement structure, the correct lease in place and the right staff for the roles in the business will mean that you can hit the ground running on settlement with no surprises.
If you are contemplating buying a business or want advice on how to get started, then reach out to one of our experts today.
Authored by Kate Chivers.
The Team - Turner Hopkins