5 EASY STEPS TO BUYING A BUSINESS
STEP 1 – THE SEARCH
Your GMO broker will give you an Information profile on one or several businesses which match your criteria. The profile has a thorough coverage of how the business operates and a financial analysis to help you and your accountant make an informed decision.
The profile includes information on:
- The overall description of the business
- The historical financial data
- Business history
- Contracts held by the business
- Government licenses held
- The premises lease
THE TOTAL COST OF A BUSINESS ACQUISITION
When buying a business, it is important to be accurate in estimating the total investment and your ability to meet what is required as the total investment can be more than just the purchase price!
For instance, you may need to allow for the following:
- Purchase Price
- Stamp Duty
- Stock at valuation (wholesale value) if applicable
- Fees – such as for Accountant’s Due Diligence advice, legal fees etc
- Possible assignment charges (lease application fee, assignment fee, rental bond, franchise application fee, training fee)
- Loan establishment fees
- Pre- paid advertising reimbursement to Seller
- Work in progress – adjusting payment to outgoing owner
- Working capital needed before cash flow becomes positive
If you’re seeking a loan to purchase your business, we strongly recommend using an experienced Finance Broker to assist as he/ she will know which banks and bank managers suit certain industries. The Finance Broker will assist in making your loan application look as professional as possible.