Business Buyer Specialist

Buying a business is one the biggest financial and lifestyle decisions you can make.

Cabrera Partners has put together a preliminary checklist below of what to consider when buying a business.

Of course there is a lot more to it than that, such as undertaking a proper due diligence.  

For peace of mind, let Cabrera Partners co-ordinate the process for you and give you the confidence that the business you are buying will help you achieve your financial and lifestyle goals.

Tips for buying a business

  • If you do not know how to read a 'Profit and Loss Statement' or 'Balance Sheet', or even if you are a little unsure, contact Cabrera Partners.  A 5 minute phone call could save you thousands.  Understanding these documents is the most critical aspect in assessing a business.  Cabrera Partners will ensure that the numbers have been properly vetted.
  • Have your finance already organised or know how to do so quickly.  Again Cabrera Partners can connect you.
  • Be decisive and know what type of business you want, as well as its location, size and approximate net profit.  But at the same time be open to comparable alternatives.
  • Be able to confidently settle the transaction in a reasonable period of time.
  • Obtain documentation from the vendor including 3 years' Profit and Loss Statements, a true list of aged debtors, 12 months of Business Activity Statements, and 3 years' income tax returns as well. 
  • Have a detailed list and inventory of plant and equipment and fixtures and fittings.
  • Ensure you have a copy of the lease on the premises together with any deeds of assignment, extensions and options to renew.  Ensure your solicitor thoroughly checks these.
  • If you do not have sufficient skills to run the business then organise appropriate training and support.  Cabrera Partners can help here too.
  • Don’t be negatively influenced by anyone who cannot give sound, balanced professional advice based on real business knowledge (this includes family).
  • Be aware that many accountants and solicitors are naturally conservative and if you listen to everything they say you'll never do anything!  Cabrera Partners will advise you from the perspective of being successful business owners in their own right.
  • Do not over-extend yourself, go into a new venture under-funded or under-capitalised.
  • As a rule of thumb, you should have at least 3 months' total operating expenses in available cash.
  • Cabrera Partners will advise you as to the best way to finance the investment.  Always check with us first.
  • Decide on the entity that will purchase or operate the business.  Getting the structure right up front is often the most effective way to minimise future taxation.  Cabrera Partners will ensure your structure is appropriate for you.
  • Buy the business with the clear view to re-selling it. Think about your exit strategy before you start up!
  • Know the average turnover for businesses in that industry and be careful if the business is turning over less than the average.
  • Find out if there is potential in the region.  Check with local authorities for growth statistics.
  • Don’t be afraid of competition but have a healthy respect for it, keep your eye on it, and be able to learn from it.  Perceived or real competition often attracts more traffic.
  • Get insurance in place – talk to your Cabrera Partners.  We are well connected
  • Buy a business you will enjoy working on!