Buying a Business
Buying a business is easier than setting up and launching new businesses from scratch, as the infrastructure is already established. There is also an existing market for the product or service and the financial record so the initial groundwork has been done for you, which allows you to launch into an ongoing cash flow. However, there are generally more upfront costs or additional invest requirements, outstanding contracts that need to be honoured and hostile staff after takeover.
Whether you’re an experienced business owner or you’re planning to buy your first business, PGH Corporate can help you make the right decisions. We conduct thorough financial assistance analysis of accounts of prospective business and provide advice on its viability and help you determine a fair price when purchasing the business.
When buying a business it is important to choose a good investment and then carry out due diligence and evaluate the risk on the business. It is critical to get the business independently valued and assess the existing employees against business needs. You should also consider why the owner is selling and if they are under time pressure, for example is there a competitor planning to open nearby. You should research the future demands on the business and investigate whether the prices and margins are rising and if the competition in the market is changing. These are important things to determine before purchasing the business because this can reduce the purchase price.
We provide a full due diligence review to ensure you know exactly what you are purchasing and also take into account your experience and ideas to help maximise your investment.
How to buy a business:
Decide what you’re looking for. Consider the location of the business and if you want to move. The location also affects the labour costs, taxes and finances. The size is also important to consider. Is it a small business or a large enterprise? It is also important to consider the upfront costs and if you have the funds to support the business if it requires additional investments. The industry is important to consider too, do you have the adequate experience or passion in this area.
Research available businesses and do not just choose the first business that you see as it may not actually be a good deal. You also need to research market and main competitors and assess business risks associated with business future trading and industry. It is important to research customers and suppliers and estimate sales activity of the business.
It is important to consider the owner’s involvement and if they are critical to the business or if the business can be taken over without them. It is just as important to consider your own skills and experience too.
Analyse the forecasted profits, sales growth, overheads, working capitals and profit margins.
To get the best deal and negotiate yourself a good purchase you should consider using a business broker. But don’t let them put you into a business decision unless you are comfortable!
Complete due diligence to determine the health and value of business.
Acquire the funding then the sales agreement. It is important to understand all the terms before you sign it.
Preparing a Business to Maximise Value
We help businesses develop and execute a growth and exit strategy to increase the value of the business while reducing dependence on your involvement to achieve it.
We develop financial modelling that provides business owners with a detailed understanding of the financial health of their business to guide strategic decision-making.
We provide objective, experienced insight and management guidance to help you position your business as a desirable and high value opportunity to a strategic acquirer.
Our experienced advisors help you develop, review and refine your forecasts with the goal of articulating a dependable, stable growth story for potential acquirers.