Buy business Australia

There are many ways to gain access to Australia and one of those is to buy a business in Australia which will not only give you income prospects from day one but it will also allow you to use your skills and your experience to improve and expand a business. However, before we get too carried away about the thought of buying business Australia, there are many different issues to consider!

The strain of buying a business

There is no doubt that it can be very stressful buying a business in Australia, or anywhere in the world, especially if you’re just moving there from your former homeland. The pressure of moving to a new country may be enough for many but the added pressure of buying a business and coming to terms with what can be a very different business environment can push many people over the edge. Before you even look to buy a business in Australia you need to be aware of the stresses and strains that will follow and ultimately try not to do too much in a very short space of time.

Starting a business in Australia

Many people move to Australia with a skill or trade which is potentially in demand in the country and offers a useful option for the future. The expat community is littered with stories of new businesses folding after a very short space of time, often leaving their proprietors out of pocket and potentially in serious financial trouble. If you’re looking to work for yourself in Australia then the main options are buying a business which is a going concern or starting your own business in Australia. Those who choose to go down the “start a new business in Australia” are very brave as this is potentially a road littered with disasters!

Buying an existing business in Australia

While even buying a profitable business with a reputation in Australia is difficult, it is nowhere near as tough a starting your own business. However, if you decide to buy business Australia then this will be the start of a long drawnout process during which you need to keep your head, stay focused and ultimately ensure that the decision you finally make is the right one for you. You also need to ensure that the business sector in which you decide to move into is one which you understand and something that you are fully aware of with regards to recent changes.

Yet again, the Australian business arena is littered with expats who have automatically assumed they are moving from a like for like business arena, such as the UK to Australia, where the regulations and laws are the same, when in reality they may be very different. Trading laws, copyright laws, employment laws, tax laws and banking charges are just some of the different areas which you will have to consider before deciding whether or not to acquire your own business.

The business culture in Australia

On the face of it many people see Australia as a laid-back country, laid-back population and one which is ultimately there for the taking if are able to run a profitable and efficient business. The truth is that Australia is a country which has many small businesses, many entrepreneurs and is one of the most competitive in the world. The stereotypical view of the Australian business arena is very different today than it was 20 years ago and with more and more international companies looking for exposure to the region there is certain to be more changes and more competition in the future.

The Austrian economy has been buoyed by large businesses moving to the country but under the surface we have seen the creation of many small to medium size businesses which have proved very popular, very successful and very profitable. Those who think the Australian business arena is a walkover may need to think again and review their ideas!

Traps to avoid when looking to acquire a business in Australia

There are many different areas in which you will need professional advice and many different areas in which you need to use common sense and patience. These include :-

Risk/reward

No matter how good a business looks on the outside and no matter how confident you are about the future never put all of your eggs in one basket and literally risk your future in Australia. Putting all your savings into one business venture is suicide even if you are well aware of the market, never mind doing this in a country which is only new to you.

Knowledge is golden

If you do decide to buy an Australian business then you will need to have an in-depth knowledge of not only the business itself but customers and the business sector. Buying a business in which you already have an interest in the subject matter is difficult enough, but buying a business in which you have no experience and no knowledge of the underlying market can in many cases be commercial suicide. No matter how good a business opportunity looks you need to be aware of the market, regulations and ultimately what could go wrong in a worst-case scenario.

Could you handle your own business?

While the idea of moving to a new country and running your own business would be a dream come true for many people around the world, you have to be sure that running your you own business is actually for you. Can you handle the pressure? Can you handle the good times and the bad times and stay balanced? What happens if you are ill? Are you really motivated enough to run your own business?

These are just a few of the questions you should ask yourself before taking on the responsibility of running your own business. Remember, if you have a family it will not only be you who will suffer if the business goes under, as you could potentially put the lifestyle of your family at risk as well. You need to be sure that a small business is for you before taking on this mammoth task!

Take professional advice!

In this world of expenses and finance it can often be very tempting to try and cut corners, save costs and ultimately leave more money in your pocket book for the future. However, professional advice should always be sought when acquiring a business because there may well be hidden problems which only the professionals could be aware of. In simple terms, very often if a deal looks too good to be true then it probably is and you need to be careful.

There is no problem shopping around for the best deal for a professional advisor, as long as you do not exchange quality of advice with the cost of advice, but you do need to have a professional advisor to fall back upon. There will be laws and regulations unique to Australia which you might not be aware of, but which your advisor will come across on a regular basis. Do not forget, you are potentially investing a large portion of your savings into a new operation and you need to ensure you are buying what you think you are buying.

Buy a business with further to go

The trick if you are selling a business is to sell before the peak of profits and conversely the trick to buying a business is to buy a business which you could add value to. If you buy a business which is mature and growth is starting to slow then potentially you’re buying a business which has peaked and may offer little in the way of expansion and growth potential in the future. Alternatively, if you see a business which you believe you can add value to then the cheaper the acquisition price the better, as long as you are certain you can add value.

You have to be realistic with regards to your business acumen, your business experience and your business knowledge. Do not automatically assume you can do better than the current owner but then again do not always assume that you cannot add value.

If you like a business, check out the competitors

If you’re interested in one particular business or one particular business sector then do your homework on more than one company in that particular area. It is very easy to be blinded by figures and profitability from one operation only to find out that sector as a whole has improved dramatically and this is in fact commonplace across other companies in that particular environment. It order to get a feel for the value of the operation you are looking to acquire you need to compare the figures against similar operations in the sector.

Why is the vendor selling?

As the Australian economy continues to boom we have seen a number of new taxes, increases in insurance premiums and a general increase in the cost of operating a business. While not always easy to confirm, if you can find out why the current vendor is selling the business this may well cast more light on potential problems for the future. That is not to say that the reason for selling may affect your reason for buying but ultimately if there are problems, you need to be aware of these. You need to have as much information to hand on the business, the sector, customers and business costs in order to arrive at a balanced decision which is right for the future and right for you.

Financing your business

The financial markets in Australia are very well developed and ultimately if you have the relevant visa and immigration documentation in place you stand as good a chance as anybody of obtaining finance for a well run business with potential for the future. There may well be some drawbacks if you are relatively new to the country and you may well have to put in more of your own savings in the initial stage, but this is to be expected until trust with your bank has time to grow.

One important point which all business owners need to be aware of is the fact that cash flow in the business should also be taken into consideration and you should ensure that you do not spend all your money buying the business only to leave it short of investment funding which can impact on the performance. If you decide to go ahead with a potential acquisition of a business you need to look beyond the actual deal and ensure that finance is in place to ensure the business runs as smoothly as possible.

Small business development agencies

As with the UK there are a host of small business development agencies in Australia who are more than happy to assist and give advice to those looking to acquire and run their own businesses. You should take as much advice and help as is given because ultimately even one snippet of information which you were perhaps unaware of could have a major impact on your thinking and your business. Never assume that you know everything, no matter how much research you have done, and always leave the door open for advice.

Conclusion

As well as looking at the various potential pitfalls of acquiring a business in Australia you also need to be fully aware of the taxation situation, employee rights and other laws and regulations which could impact on your business. Do not automatically assume, yet again, that you’re moving to a like for like situation because no one business environment is ever the same as another country.

One simple mistake which many people make is rushing into a business acquisition and ultimately regretting this further down the line when perhaps the business turns out not to be “what it said on the tin”. Rushing into a business acquisition is absolutely crazy as you could potentially be putting your whole future livelihood at risk not to mention that of your family. Take your time, take advice, don’t invest all of your money and be 200% certain that the final decision is correct for you now, in the short-term, in the medium term and in the longer term. Do not rush in!

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