It can be said for many people, starting a business may seem exciting. Creating a new product or establishing a new brand might seem like the breath of fresh air needed to break away from a boring job or life. Although starting a new business does have its pros. Some examples include not paying an owner, not having business problems on your head and freedom to define a work cycle. However, the above statements are rarely grounded in reality. The failure rate for a start-up business is sixty per cent in Australia. Dealing with business plans, legal issues, business investors, employment, buying equipment, acquiring new customers, suppliers and all different aspects involved in running a start-up can put a dent in any motivations etched in starting a new business.
At the DG Institute, rescue is offered to anyone looking to buy a business from some of the Cons of buying a new business. Some of which include falling for a scam, challenging to make it ‘your’ business, the business might have a bad reputation among others. With the below steps, they can ensure these cons will not hinder anyone looking to buy a business. It’s not all gloomy while buying a new business. Some pros include acquiring an established customer base, a tried and tested business model, buying an existing brand and inheriting an immediate cash flow.
An existing business will usually have a stable set-up allowing any new buyer to understand it and finally look for opportunities for its growth. The acquisition ensures the removal of risk in the plans of any investor given the rate of failure of start-ups aforementioned.
Before going into details of buying a new business and how to go about it, defining the types of business is worth mentioning. A small business has less than 20 staff including sole traders. Small businesses are known to be the backbone of the Australian economy. Medium-sized businesses have around 20 - 199 staff and finally, big businesses are having more than 200 staff.
Below we highlight the steps on how to effectively buy a new business and how to avoid any unforeseen pitfalls:
Decide what you want:
Investing in a business is a decision impacting your life for years to come. Thus, its important to get a thorough understanding of how you envision your business to be. Mainly, these factors should be thought out - location, size, industry and lifestyle to ensure that you know what you are getting into.
Completing Due Diligence:
It’s important to not jump to acquiring a promising business venture as it can look ugly under the hood. Here it’s important to verify the financial records (cash flow, business activities, tax return), any liabilities present before you buy the business, legal compliance and conditions of business equipment assets.
Acknowledge the Reason of Sale:
It’s a common misconception that if an owner decides to sell their business, there must be something wrong with it. It’s important to realize that this is not always the case as the current owner can be excited about a new business idea or the business no longer matches their lifestyle or they are just not as passionate as before. Still, the current owners have to be convinced that their business is going in the right hands.
By performing a SWOT analysis, you get to see the bigger picture and will greatly improve the visibility of the acquisition. SWOT is an acronym for Strength, Weaknesses, Opportunities and Threats.
Knowing about the business competitors in the market can be a boost to visibility and current business state (If there is a competitive advantage or not)
After having researched all the above points, finally, it's time to evaluate the cost of business which usually has four major legs:
Market Value: Can be known by looking at selling data and with the help of business brokers.
ROI: Return of Investment can be calculated as the percentage of the current net yearly business profit against the business purchase price.
Business Asset Value: Knowing the value of all tangible and intangible assets which we can help out with.
Cost of starting a similar business from scratch.
Now, preparing a strategy from starting from the beginning to the end followed by execution can be a tedious task without the help of an expert. With the DG institutes Business Turnaround Program, you can feel lighter and more confident of your approach to investing. Some bullet points of this program are:
2-Day workshop (Valued at 2,000$)
In this 2-day workshop, Dominque and her team will impart their knowledge and experience with intricate workbooks, exercises and keynote talks.
Accelerator Home Study Course (Values at 10,000$)
12 month’s access to the member’s only portal with workshop videos, templates and forms, course manual and resources.
Online home study course (Valued at 5,000$)
Implement your learning by completing the fundamental knowledge gained by accessing our comprehensive online course.
Legal Repository (Valued at 5,000$)
A comprehensive legal kit consisting of contracts, forms templates and special conditions with 12-month access.
Equifax Professional Subscription (Valued at 8,750$)
Providing access to a custom-built Equifax online platform for 12 months.
12-months access to support via emails for your business deals with the help of qualified experts.
Along with the above benefits, access to a member’s only deal hub, monthly webinars with Dominque and finally access to finance and support teams are also provided as separate courses.
They have also highlighted a handy check-list on our website for buying a business. This check-list can save you from loss and landing that bad business deal. We also offer a variety of other programs such as Asset Protection (Master Wealth Control), Real Estate Rescue and Property development (Property Uplift Program). Head on to their website for more details today.