Buying a business

Buying a business is a very challenging task even you have been working in the same industry for years.

Before starting any due diligence process, we normally suggest clients to check the following:

  1.  How long the lease is left on the business premise? If there are only less than 5 years left without any options to excises, there is no point to pursue further.
  2. Is the landlord strict with the buyer’s net asset position? This can be found out by contacting the managing real estate agent. If you do not own a house or have any investments, you may have difficulties to persuade the landlord to transfer the lease to you even the business owner wants to sell the business to you!
  3. Is the business a well-established business? Buying a new start-up business is always risky.

Then you need to start a proper due diligence check with our experienced consultant, our services include:

  1. Request at least two year financials, last eight business activities statements from the business owner,
  2. Review financial reports and analyse the main data, including add backs,
  3. Review Section 52 Form 2,
  4. Identify the major supplier and customers,
  5. Analyse business risks and compliance requirements,
  6. Provide an estimated business valuation appraisal based on the financial information,
  7. Check and review the lease agreement,
  8. Check the credit record for the business entity,
  9. Check the owner’s credit record with their approval,
  10. Conduct cash flow forecast,
  11. Setting up the right structure for the purchase,
  12. Negotiate purchase price with real estate agent,
  13. Provide solutions to finance the business purchase.

Our advice will ensure you make the right decision on buying a business.