What Is Goodwill?

GOODWILL CAN BE DEFINED AS…

“THE EXPECTATION THAT A BUSINESSES CUSTOMERS WILL CONTINUE TO PATRONISE IT REGARDLESS OF WHO THE OWNER IS”

Let us examine three different businesses:

  1. A newsagency

        2. A hairdresser

        3. A television network

Do you really care who serves you in the newsagency? Within reason, you will be in the habit of using a certain newsagency and your habit will be ingrained. What you really like is that it is convenient and that it has a product you habitually need, such as a daily newspaper or bus card or lotto ticket. So long as the person who is serving you is efficient and friendly you won’t change newsagencies. This is called locational goodwill.

But what about the hairdresser? Sure it may be convenient, but what if your favourite hairdresser sells the salon and the new owner just doesn’t cut your hair the same way? Chances are you will move to a more convenient location or alternatively follow your favourite hairdresser to their new salon! This is called personal goodwill.

How many years have you been watching the six o’clock news on the same station? You may be stuck on Seven or you may be stuck on the ABC or Nine but chances are you are “rusted on” to one TV news service and you won’t change easily! This is called brand goodwill.

Understanding their goodwill helps the TV networks chase ratings. The higher their ratings, the more they can charge advertisers.

GMO understands goodwill in all its forms (brand goodwill like channel nine, locational goodwill like a newsagency and personal goodwill like a hairdressing salon.)

 

To have your business’ goodwill assessed by a professional, contact the GMO office on (08) 9481 4422.

Whether it’s the goodwill of your business or a business you are looking at purchasing, it’s vital that the figure on paper reflects the business in question. 

 

GMO-logo-white@2x
Facebook Twitter

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.

© GMO BUY A BUSINESS 2024. ALL RIGHTS RESERVED

Created by Websupport.net.au | Designed by White Mouse Design

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.
    By ticking you are accepting and agree to our Terms & Conditions including Confidential Disclosure Agreement & Privacy Policy.

Subscribe to GMO's Monthly Hotlistings

Subscribe today to receive GMO’s monthly updates and a list of all current business opportunities
  • This field is for validation purposes and should be left unchanged.

All Search Filters

  • Business type

  • Industries

  • Search by keyword

  • Price

    $ - $

  • Net Profit

    $ - $

  • Location

  • Agents

  • Sort by Price

  • Reset