There are few things more exciting that deciding to go into business on your own. Rather than facing the blank sheet of paper and starting your business from scratch buying an established business could be the best way for you to get started in New Zealand. I have done both and are perfectly aware neither is easy but pre-existing does have advantages.
There are significant advantages to investing in a business model that is already proven and taking on an existing business which has customers already with the all-important cash flow that goes with them.
There are various ways to find the business for you in New Zealand. You could start by contacting a business broker. These will generally at any one time have a number of businesses on their books for sale. Some brokers specialise in specific sectors and can offer industry advice and point to opportunities. It should always be remember though, that these brokers are working for the sellers, plus the better the sale price they can attract, the bigger their commission will be.
If you are sure what you are looking for these days a lot of people choose to search online.
You will be spoiled for choice if you search for “businesses for sale in New Zealand”. There will be a huge variety of websites with businesses up for sale.
Another way to find business opportunities is through local Chambers of Commerce and the Economic Development Agency. These will know of relevant and trade associations who will know of opportunities in their area.
Professional advisers, like the big law firms and accounting companies, can not only help investors buying a business by providing the necessary financial and legal services, they may also have useful guidance on business opportunities.
Then there are Business Advisors like Immersion Group who have hundreds of businesses working with them on a daily basis of which some are being prepared for sale. If you would like to get a ground floor opportunity then we are a great option.
With these methods of selecting a business to buy an increasing number of people are making the leap, especially as the economy improves.
In New Zealand the brokers are reporting that many people are looking to “to buy a job” and are in the market for businesses being sold for less than $150,000. A lot of these are using redundancy money to buy businesses that will give them an income while they build the business up gradually.
When you are looking for a small and medium enterprise (SME) to buy it’s a good idea to make sure it has the potential for a lifestyle fit. Look at the businesses that interest you and which you feel you could run and you would be happy to call your own.
Take time; visit the businesses you choose incognito so you get a feel for the business without anyone being aware.
Identifying the business to own is the easy part. Buying it can be a bit trickier. Once the purchase decision is made it’s time to get serious, because negotiations and due diligence need to start. You will need an accountant and a lawyer as well as possibly other advisers.
A business sale is bound to involve a lease so a solicitor needs to be involved to make sure your tenancy is secure. The due diligence process ensures any information provided is accurate correct and is usually carried out by an accountant who is looking for the business’s viability.
It is essential you meet the owner of the business you are buying. This is where you find out why the owner is selling and how much he thinks you can expect to take out of the business as it is.
I love this part of my Advisory Practice and would be very happy to help anyone, even if it is just a friendly chat.