'TWAS THE WEEK BEFORE CHRISTMAS

Are you dreaming of buying a small business? Great choice!

It's an exciting journey, but also, one where you need to tread carefully. You will need some careful business planning, and our first recommendation would be to call Hills Accounting for the advice and assistance you will need for this adventure.

Before that, let's walk through some vital steps and tips to make this adventure as smooth as possible.

After all, buying a small business means you’re not just a business owner; you’re part of a community. You have an established customer base and a real chance to grow something amazing. Plus, who doesn’t love being their own boss?

What Sort Of Business Did You Have In Mind

You do not need to be an expert in a specific field to run your own business, but it is not a bad idea to have at least some knowledge or interest in the industry of preference.

If you are unsure where to start looking for a business to buy, the first step would be to sit down and make three lists of your interests, hobbies and work experience. Then you should work out where the items on each list overlap. It might well point to a specific industry in which to start looking.

Most importantly, consider what funds you have to cover purchase, setup, opening and running your new business. Again, your new accountant will guide you on what you can and cannot afford.

Once you have this information, or you have decided on a specific industry to tackle, one of the team at Hills Accounting can help you make a selection and then work through that to the next step.

Understanding the Market

You need to have a feel for the lay of the land. The Australian small business scene is vibrant, like a Christmas parade, but just like the parade, you need to know which street to stand on to get a successful view. Do a bit of digging into current market trends for your chosen field. It’s all about finding that sweet spot where your passions and strong market opportunities intersect.

Questions for the Vendor

Alright, you've found a business that's caught your eye, and it is within your budget. Now, it's interrogation time – but in a friendly way, of course!

• Ask the vendor why they're selling - this can give you insights into potential challenges.
• How's the business been doing financially - You're looking for stability or potential, not a sinking ship.
• Ask about operational costs, existing contracts, and the customer base.

Think of yourself as a detective in a business mystery novel.

Evaluating the Business

One of the most important sayings in business is "location, location, location" It highlights the importance of the physical location of your business to passing trade, supplies, parking and many other things relevant to the industry you are looking at. Even an online business requires the same consideration. Having a beautiful website selling your products is a great idea, but if nobody ever sees it...

So, first check out the location of the business, and then look into its assets. Importantly, check out the business's reputation. You wouldn’t buy a car without looking under the hood, right? Same deal here.

Next, you will need properly prepared and lodged financial statements for the last three years and copies of Tax returns for those years so you can check one against the other. If you are reading this and you are thinking "But I wouldn't understand what I am looking at" then let me refer you back to a recurring comment throughout this article. PLEASE!, get an accountant on your side from the very start.

You might think you’re good with numbers, but when it comes to buying a business, your accountant is your guardian angel. They’ll help you make sense of the financial health of the business and navigate through the tax maze. It’s like having a GPS when you’re lost in the Outback. At Hills Accounting, it is what we do!

Legal Stuff - It Matters!

Plus, of course, there is the not-so-fun, but oh-so-crucial part– legal and regulatory stuff. Australia’s got its fair share of rules regarding buying a business. You’ve got to dot your i’s and cross your t’s here. Your accountant can do much of this with you and will point you at a solicitor when necessary. Due diligence is your best friend.

Negotiating the Purchase

It's time to talk turkey. Negotiating can be tough but it’s also where you can shine. Arm yourself with all your research and be confident.

There is no reason why your accountant cannot help with this process in case something comes up that you are unsure of. Plus they will have a better sense of "that doesn't sound quite right".

If you, or they, get that feeling, remember, it’s okay to walk away from any deal and look for something else.

After You Get the Keys

Congratulations, you’ve got the keys to your new business! But the journey doesn’t end here. Now, you’ve got to steer the ship. Plan your first few months meticulously and always keep one eye on long-term goals. That sort of business planning is just one of the services Hills Accounting specialises in.

Wrapping It Up

So there you have it – your basic guide to some of the basics of buying a small business. Remember, it’s about asking the right questions, doing your homework, and getting the right people to help you.

Good luck, and here's to your success in the land of opportunity!

For more information, email us today at admin@hillsaccounting.com.au or call us on 03 62737800