Important Factors For Business Buyers | GMO Buy a Business

CRITERIA THAT INFLUENCE GOODWILL AND PRICE

GMO believes it is important for you to ensure the business of interest matches your lifestyle criteria as well as “measuring up” in respect to the ‘business performance’ you require.Please consider some following points of measurement:
  1. Length and history of business
  2. Net profit stability and gross profit trend-lines
  3. Reasons for variations in sale levels
  4. Stability and quality of staff
  5. Performance of business compared to peer group
  6. Diversity of customer base
  7. Diversity of products and services
  8. Data base size and quality
  9. Systems and manuals of the business
  10. Strategic location of the business
  11. Licences or franchises held by the business
  12. Quality and efficiency of “Stock Turn” patterns
  13. Cash flow requirements
  14. Premises Lease rent, length and conditions
  15. Barriers to entry
  16. Strength of exclusivity (unique buying proposition)
  17. Technology opportunities for the business
  18. Supplier diversity
  19. Preferred supplier status
  20. Supplier contacts held
  21. Government panels and tender qualifications held
  22. Government approved licenses held
  23. Brand equity
  24. Social media exposure and rankings
  25. Foreign exchange risk
  26. Intellectual property

An intelligent Buyer will consider all these points and more. They can then compare more than one business and find the “ONE” which not only suits their lifestyle criteria, but also passes this point test with flying colours!

Your GMO Broker can provide you with an assessment matrix to complete on all the business you consider- so remember, you can profit from our experience!

One feature of our scoring matrix is that it focuses your mind as a prospective buyer on the strengths, weaknesses, threats and opportunities surrounding the business you are considering and also the industry it operates in and the regulatory environment surrounding its operations.

This is not dissimilar to completing a jigsaw puzzle where every piece is important, but also each piece of information contributes to the ‘Big Picture” or a helicopter view of the business. The matrix will also identify in your own mind where you can make improvements and how you can put together an effective business plan.

Remember “the future belongs to those who plan for it”

 
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Whether you dream of buying a business, want to sell your Perth or WA business, or want to know the value of your company – GMO’s business brokers and valuers are here to assist you. We have won the City of Perth Award for Business Excellence and our Managing Director has been elected as a fellow of the Australian Institute of Business Brokers. Whether you are a buyer or a seller, GMO can introduce you to the right person.

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CONFIDENTIALITY DISCLOSURE AGREEMENT

  • The disclosers are willing to disclose such information to the recipient subject to their acceptance of the following conditions:
    1. The recipient shall treat all information received from the discloser as confidential and shall ensure that all such information remains confidential and shall not use any such information in any way other than for the specific purpose aforesaid. The recipient acknowledges that all conditions subsequent in this disclosure apply to the recipient and any associates of the recipient be they partners, co‐directors, trustees, holders of shares or officersin entity(s) the recipient has interest in.
    2. The obligations of paragraph 1 shall not extend to any such information which is in the public domain, or which hereafter becomes part of the public domain otherwise than as a result of any unauthorised activity or omission of the recipient, or which is already in the possession of the recipient and was not derived from the disclosers.
    3. The recipient shall return all such information received other than that which is submitted orally at the termination of such negotiations entered into as a result of this agreement.
    4. The obligations set forth in paragraph 1, 2 and 3 shall terminate 12 months from the date of this agreement or upon the disclosers and the recipients entering into an agreement whichever event occursfirst.
    5. The recipient shall obtain no rights of any kind to such information other than for the specific purpose stated in this agreement.
    6. The receiving party will not utilise any material made available to improve, construct or change another business, in such a way as to allow that business to compete with the business being discussed.
    7. The recipient understands that the information has been compiled by GMO from details provided by the Vendor. Prospective purchasers should be aware that it is not intended that any projections or this information be treated as a representation, warranty or promise by GMO or its representatives, as to the correctness of the information, or that all relevant information is contained in the information provided.
    8. The recipient acknowledges that they will not act on information provided without first seeking independent financial and legal advice.
    9. The recipient hereby agrees to declare any beneficial interest in any business that could currently be interpreted as being in competition with the subject business.
    10. The recipient agrees to return all documents supplied within 50 days of receipt (and any copies) should they decide not to proceed. The recipient further agrees to destroy any electronic information supplied by the Seller or GMO and to instruct their professional advisors to also destroy any information passed on by the Seller, the recipient or from GMO.
    11. The recipient acknowledges they are precluded from physically visiting the premises of the business or talking to any client, supplier or employee of the business without the permission of the discloser.
    The recipient/s hereby accepts the above conditions as binding on them in respect of the information referred to.
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