Across the country, families are grappling with securing childcare, but the strain is particularly acute in regional Western Australia. A recent study highlights that the region has the least accessible childcare in the nation, creating significant challenges for parents and providers alike.

Key Findings:

• Regional WA has the lowest childcare accessibility in Australia, according to the report.
• Parents often face wait times stretching from months to years to secure daycare placements.
• Chronic staff shortages are cited as the primary factor behind the accessibility crisis.

WA’s Accessibility Crisis

The report underscores a critical issue: WA has the highest demand for childcare places, with an average of 3.6 children competing for each spot, compared to the national average of 2.6. Regional areas are particularly hard hit, with some communities facing far worse ratios. For example:

• Gascoyne Region: 7 children per available place.
• Tom Price: 9 children per spot.
• Goldfields Region: 5.8 children per available place, one of the more favorable figures in regional WA.

Calls for Government Action

The findings have amplified calls for systemic change. Ahead of the federal election, the WA Council of Social Service (WACOSS) is urging all political parties to prioritize universal childcare access.

“It’s evident that relying on the for-profit sector alone won’t solve this issue,” said Louise Giolitto, CEO of WACOSS. “Federal intervention is essential to guarantee access to early education and childcare services for all families.”

The Human Toll: Families Under Pressure

Parents like Kalgoorlie resident Amy Southall know all too well the challenges of finding childcare in regional WA. It took seven months for Amy and her partner to secure a spot for their son, Harry—a timeframe she describes as “fortunate” compared to others in her community.

“The process was incredibly stressful,” Amy shared. “Providers couldn’t give any certainty about when a place might open up, which made planning almost impossible.”

The uncertainty took a toll not only on her family’s daily life but also on her ability to return to work. “My partner works full time, but my career matters too. Not knowing when I could go back was really hard,” she said.

A Growing Crisis

The first comprehensive project mapping childcare availability across Australian neighborhoods reveals that over one-third of Australians live in areas with significant shortages. The situation is particularly dire in regional communities, where the demand for childcare far outpaces supply.

Conclusion

As families in regional WA continue to face lengthy waitlists and uncertainty, the need for targeted action has never been clearer. Addressing the childcare crisis will require collaboration between government and providers to ensure that all children, regardless of location, have access to quality early education and care.

Are you buying a business in Perth? Do you have a Perth business for sale? For more information on how you can get the best results, contact Angela at Advance Business Brokers today.

DECEMBER 2024 – CC Seller / Buyer

4 Ways to Becoming a Business Owner With Clarity and Clear Vision

Becoming a successful business owner involves more than just having a great idea or wanting to be your own boss. It requires clarity and a strong vision to guide your decisions and actions. Clarity means knowing what you want to achieve and how you plan to get there, while a clear vision acts as a roadmap, helping you navigate challenges and seize opportunities. Here’s how to establish clarity and a clear vision as a business owner.

1. Define Your Purpose

The first step is to clarify your purpose. Ask yourself why you want to start a business and what you hope to achieve. Are you passionate about solving a specific problem? Do you want to make a positive impact on a community or industry? Understanding your purpose will provide direction and motivation, ensuring your decisions align with your values and long-term goals. This purpose becomes the foundation of your business vision, guiding you through the ups and downs of entrepreneurship.

2. Reprogram Limiting Beliefs

To thrive as a business owner, it’s important to identify and overcome limiting beliefs that might hold you back. Recognizing and changing these negative thoughts is crucial for achieving the clarity you need to succeed. By eliminating these mental barriers, you’ll be able to approach your business with a clear mindset, paving the way for growth and success. Overcoming limiting beliefs is a vital step in becoming an effective business owner.

3. Manifest Your Future

Having a clear vision of your future is essential. Actively manifest your goals by imagining that you’re already running your successful business. When you align your thoughts and feelings with this vision of success, you create a positive energy that can attract opportunities. This concept, rooted in the law of attraction, suggests that what you focus on can help bring your goals to life.

4. Foster Positive Thoughts and Alignment

Cultivating a positive mindset is key to achieving clarity and a clear vision for your business. Embrace challenges, learn from failures, and view setbacks as opportunities for growth. Positive thinking promotes continuous learning and innovation. By aligning your thoughts with your vision, you can invest in your personal and professional development. A positive outlook empowers you to overcome obstacles, adapt to change, and pursue your vision with determination. When you maintain positivity, success often follows, helping you build a thriving business.

In summary, becoming a business owner with clarity and vision takes dedication, strategic planning, and ongoing effort. By defining your purpose, conducting thorough research, setting SMART goals, and building a strong team, you can create a solid foundation for your business. Stay focused, adaptable, and cultivate a growth mindset to navigate challenges and realize your long-term vision. Remember, clarity and vision are about not only having a plan but also executing it with passion and persistence. With the right approach, you can turn your entrepreneurial dreams into reality.

Are you buying a business in Perth? Do you have a Perth business for sale? For more information on how you can get the best results, contact Angela at Advance Business Brokers today.

November 2024 – Buyer

When you’re ready to sell your business, it’s important to receive a price that reflects the time and effort you’ve invested in making it successful. Ideally, you’d like enough funds to support the next stage of your life, whether that means saving for retirement or starting a new venture. While your aim is to achieve the highest possible sale price, the actual value of your business might not always match your expectations. Numerous factors influence your business’s worth, many of which you may not be able to control. To maximize the value of your sale, it’s essential to take steps to enhance it. 

Understand Your Current Value

To get the best price when selling your business, start by figuring out its current value. This helps set realistic expectations. The best way to do this is to hire an independent expert for a valuation. It’s also helpful to know what factors influence your business’s worth so you can see where improvements can be made.

Become an Industry Leader

Being a leader in your industry can significantly boost your business’s value. Companies that stand out are more likely to achieve higher sales, keep customers, and build a strong brand. This makes your business more attractive to buyers, whether they’re competitors or newcomers. Focus on providing unique value to your customers, like excellent service or innovative products, to establish your business as a key player in the market.

Improve Cash Flow

Cash flow is the lifeblood of your business. Positive cash flow shows that your business is financially healthy, can meet its obligations, and is less likely to go into debt. Buyers are drawn to financially stable businesses, making good cash flow vital for your value. To enhance it, keep a close eye on costs, cut unnecessary expenses, and set fair pricing.

Attract More Customers

Your customer base is a crucial asset for attracting buyers. A solid customer foundation signals steady income and demand, making your business more appealing. Here are some ways to strengthen your customer base:

• Implement a strong marketing strategy.
• Diversify by targeting new or niche markets.
• Create loyalty programs to encourage referrals.

Improve Company Reputation

Your company/brand’s reputation directly affects its attractiveness to buyers. Building a positive reputation can help expand your customer base and strengthen your market position. You can enhance your reputation by consistently delivering great service, fostering strong customer relationships, making the most of positive publicity, and listening to feedback, like customer reviews. A better reputation can give you an edge in negotiations and may even lead to a higher sale price.

Lower Expenses

Profitability is a key indicator of success. A profitable business attracts customers because it shows value and demand. To maintain profitability, it’s essential to manage expenses carefully. High costs can eat into profits, affecting cash flow and reinvestment potential. Before selling, work on reducing expenses to boost profit margins. The higher your profits, the more appealing you will be to potential buyers.

Empower Staff

Your workforce is an important asset. A strong, loyal team can attract buyers, especially if there’s a solid management structure in place for after the sale. Investing in your staff through training and development enhances their skills and boosts productivity. Happy, well-trained employees are likely to stay longer, which is another plus for potential buyers.

Are you buying a business in Perth? Do you have a Perth business for sale? For more information on how you can get the best results, contact Angela at Advance Business Brokers today.

November – Seller

Maximizing your sale price should be a primary goal for any business owner. From the outset, it’s important to have a detailed exit strategy if you aim to get the best possible price when you eventually sell your business.

Running a business involves constant improvement, but it’s essential to first assess your current position—establish a baseline. 

A carefully crafted succession plan shows stability and foresight. Buyers prefer to see a clear future roadmap for the business, which enhances their confidence and increases its value.

1. Boost Profitability

Examine your financials to find ways to cut costs or increase revenue. Even small improvements can significantly raise your sale price.

2. Optimize Operations

Streamline processes and adopt tools like CRM systems to enhance productivity and customer relationships.

3. Strengthen Your Management Team

Reduce your reliance on personal involvement by training your team to run the business smoothly.

4. Diversify Your Customer Base

Avoid over-dependence on a single customer to make your business more stable and attractive to buyers.

5. Enhance Branding and Marketing

Invest in a strong brand and effective marketing to boost your business’s appeal.

6. Document Everything

Keep thorough records of finances, contracts, and procedures to build buyer trust and streamline the sale.

7. Upgrade Technology

Modernize with cloud-based, cost-effective tech to improve efficiency and reduce expenses.

8. Strengthen Supplier Relationships

Negotiate better terms with suppliers as your business grows to lower costs.

9. Manage Debt Wisely

Reduce high levels of debt and improve cash flow through effective debt collection and payment terms.

10. Focus on Recurring Revenue

Develop subscription models or long-term contracts for stable, predictable income.

11. Enhance Sales Strategy

Refine your sales processes and delegate operational tasks to focus on driving revenue growth.

12. Expand Your Offerings

Add complementary products or services to increase revenue and differentiate your business.

13. Protect Intellectual Property

Secure your IP with trademarks, patents, and copyrights to add value and attract buyers.

14. Strengthen Market Position

Analyze your competition and market to enhance your position and command a higher sale price.

15. Ensure Compliance

Keep up with legal and regulatory requirements to avoid costly compliance issues and reassure buyers.

Are you buying a business in Perth? Do you have a Perth business for sale? For more information on how you can get the best results, contact Angela at Advance Business Brokers today.

OCTOBER 2024

Go ahead, back your judgement.
 
In the final analysis that is the essential factor in success, sustainability and growth. It builds on the need to recognise opportunity and accept risk.  

Those three pillars, judgement, opportunity and risk, are the foundations from which innovation evolves. They are driving forces for dynamism, which ensures relevance and resonance.
 
Judgement implies acceptance, analysis and application of external and internal advice and expertise. However, it takes judgement to conclude reasonable, rational, informed and considered decisions. No Infallibility. Errors pervade commerce, society and life.

They are often intuitive, subjective, emotional, personal and can be reaffirming. Positive judgements justify persistence, overcoming barriers, filters and impediments.
 
Confidence is a byproduct. It is infectious and generates, accelerates and sustains business.
 
Customers, clients, suppliers, team-members, financiers and governments back those who back themselves.
 
Conspicuously evident at present is a widespread lack of confidence, self-belief and a preparedness to make judgement-calls. Timidity can, and often does lead to hesitancy, inertia, lost opportunities and failure.
 
On reflection, there is currency in the long-held contention and statement:
 
                                    If it’s going to be,
                                    It’s up to me.
Your call.

HE WHO HESITATES
 
Traditionally, considerable time, money and resources are invested in determining WHY, WHAT, HOW. There is a noticeable missing variable. WHEN.
 
Recent forecasts, projections and visions have poor records of accuracy. The impact has been substantial on commerce at large, volume, velocity, momentum and productivity.
 
Individually and collectively, economists, financiers and chief executives have nominated at least six recessions, none of which have yet unfolded.
 
The consequential lack of decisions, investments and campaigns have resulted in lost opportunities, revenue and profits.
 
There is much to gain for those who are prepared, equipped and willing to make their own judgement-calls.
 
It is arguable that there is no better time than right now to do so.

Should you wish to have a facilitator or guest contributor to an appropriate workshop, do make contact.

Kind Regards,
 
Barry Urquhart
Workshop Facilitator
Marketing Focus
M:  041 983 5555
E:   urquhart@marketingfocus.net.au
W:  www.marketingfocus.net.au

September Newsletter

Buying a business is an exciting venture, but it’s important to understand the process before diving in. Whether you’re eyeing a small business or a major acquisition, ABB offers a detailed guide to help you navigate this journey.

Many prospective buyers overlook crucial steps like assessing their readiness and securing financing, leading to deals falling through. This guide aims to prepare buyers for what lies ahead, from initial inquiries to finalising the purchase.

Here’s a simplified breakdown of the steps involved:

1. Assess Your Readiness: Before browsing businesses for sale, evaluate if you have the skills and experience necessary to run a business. Consider government resources available to assist you.

2. Organise Your Finances: Knowing your financial situation upfront is key. Understand your borrowing capacity and explore financing options like personal savings, bank loans, or vendor financing.

3. Search for Business Opportunities: Utilise online marketplaces, engage with business brokers, or tap into networking groups to find suitable opportunities.

4. Make Initial Inquiries and Sign NDA: Once you find a potential business, contact the broker, and sign a Non-Disclosure Agreement (NDA) to access more detailed information about the business.

5. Review Business Information: Evaluate the Information Memorandum provided by the seller, which includes crucial details about the business’s operations and finances.

6. Conduct Due Diligence: Thoroughly examine the financial, operational, legal, and market aspects of the business to ensure it meets your expectations and is a sound investment.

7. Make an Offer and Negotiate Terms: Draft a non-binding offer that outlines the proposed price, payment terms, and conditions of the sale. Negotiate with the seller to reach mutually agreeable terms.

8. Secure Financing: Finalise your financing arrangements to ensure you have the necessary funds to proceed with the purchase.

9. Head of Agreement (HOA) and Finalise Contract: Use a Head of Agreement to outline key terms before finalising the Contract of Sale with the seller’s solicitor.

10. Settlement and Transfer: Complete the sale by signing the Contract of Sale, making the payment, and transferring ownership of the business. Ensure all legal and administrative requirements are met.

By following these steps and seeking professional advice when needed, you can navigate the process of buying a business successfully.

Don’t Make These 6 Buyer Mistakes When Purchasing a Business

Buying a business can be profitable, but it also has its share of challenges and risks. In Australia, entrepreneurs and potential buyers often make several mistakes when acquiring an existing business. These mistakes can be expensive and have lasting effects. Let’s look at some common errors buyers make and how to avoid them to invest wisely in a successful business.

1.Not Doing Enough Research

Before buying a business, it’s crucial to do thorough research, examining its financial, operational, and legal aspects. Skipping or rushing through this step, often due to eagerness to close the deal quickly, can be a big mistake. Take your time to review financial statements,  leases, contracts, and employee agreements. Get professional help if needed to spot any potential issues.

2.Lack of Industry Knowledge

Buying a business in an unfamiliar industry can be risky. Without industry knowledge, you might struggle to make good decisions or understand market trends. To avoid this, consider purchasing a business in an industry you’re familiar with, or invest time in learning about the industry before making a purchase.

3.Underestimating Working Capital Needs

Many buyers focus only on the purchase price and forget about working capital needs. Adequate working capital is essential for covering daily operational expenses. Failing to ensure there’s enough working capital can lead to cash flow problems soon after the acquisition. Assess the business’s working capital needs thoroughly and negotiate with the seller or secure financing to cover these costs.

4.Ignoring Legal and Regulatory Compliance

Failing to comply with legal requirements can result in fines, legal battles, and disruptions to the business. Conduct a thorough legal review to ensure compliance with employment, environmental, tax laws, and industry regulations.

5.Paying Too Much

Determining the fair market value of a business is complex and crucial. Overpaying for a business can strain finances and reduce profitability. Seek professional advice and consider multiple opinions to ensure the purchase price aligns with the business’s true value.

6.Neglecting Customer and Supplier Relationships

Maintaining strong relationships with customers and suppliers is vital for business continuity. Engage with key customers and suppliers early on, assure them of your commitment, and develop a transition plan to minimize disruptions.

Buying a business can be lucrative if done right, but it’s essential to avoid common mistakes like inadequate research, industry ignorance, and neglecting relationships. By navigating the acquisition process carefully and seeking professional advice, you can increase your chances of turning the purchased business into a thriving venture.

A few things for Western Australia Business Owners to consider.

Selling a business is a major decision that requires careful consideration and planning. For business owners in Western Australia, timing can play a crucial role in maximizing the value and success of the sale. So, when is the best time to think about selling your business?

1. Strong Financial Performance: The best time to sell is when your business is performing well financially. Buyers are more likely to pay a premium for a business that shows strong revenue and profit trends. Make sure your financial records are clean, up-to-date, and demonstrate growth. This not only makes your business more attractive but also increases its market value.
2. Market Conditions: Keep an eye on market conditions. When the economy is strong, and there is high demand in your industry, it can be a favourable time to sell. Conversely, during economic downturns, buyers might be more cautious, and you may not get the best price. Stay informed about local market trends in Western Australia to identify the right moment.
3. Personal Readiness: Your personal readiness is just as important. Consider your long-term goals, retirement plans, and overall readiness to step away from your business. Selling a business is not just a financial transaction; it’s also an emotional one. Make sure you are prepared for the transition and have a clear plan for your post-sale life.
4. Business Life Cycle: Evaluate the stage of your business life cycle. Ideally, you want to sell when your business is at its peak rather than in decline. If you foresee potential challenges or market saturation, it might be wise to sell before these issues impact your business value.
5. Strategic Opportunities: Sometimes, strategic opportunities arise that make selling particularly advantageous. This could include interest from a larger company, an attractive buyout offer, or favourable changes in industry regulations. Be open to these opportunities and ready to act when they present themselves.

In conclusion, the best time to sell your business in Western Australia depends on a combination of strong financial performance, favourable market conditions, personal readiness, the business life cycle, and strategic opportunities. By carefully considering these factors, you can make a well-timed decision that maximizes the value of your business and sets you up for future success.

Considering the thrilling path of becoming a business owner through acquisition? Whether you’re an experienced entrepreneur or a newcomer, it’s a major step. While it can be immensely rewarding, it also presents challenges. To ensure your success, strategic planning is essential. Here are some key insights to guide you:

Know Your Reasons

Before diving into business acquisition, take time for introspection. Why do you want to buy a business? Is it to pursue a passion, transition a hobby into a career, gain independence, achieve financial stability, or apply your skills and experience? Understanding your motivations will form the basis for your business goals and informed decision-making throughout the process.

Starting Point Advantage

Acquiring an existing business offers significant advantages over starting from scratch. Despite the initial allure of lower costs, an established business comes with built-in advantages like an established customer base, revenue streams, employees, equipment, and often a strong reputation. This saves the effort and time needed to build these from the ground up.

Accelerate Growth Through Acquisition

Business growth can occur organically or through acquisition. Purchasing an existing business, especially in a related industry or market, can strategically accelerate your growth. It allows you to capitalize on economies of scale, tap into new customer segments, explore different distribution channels, or offer complementary products and services.

Choosing the Right Opportunity

Selecting the right business opportunity is crucial. Research the industry thoroughly, assess market trends, competition, and evaluate whether it’s a growing or declining sector. Scrutinize the financial health, operations, legal commitments, and location of the business. Consider how well it aligns with your goals and market.

ROI Considerations

Understanding Return on Investment (ROI) is pivotal. There’s no one-size-fits-all answer; it depends on your financial objectives and risk tolerance. Factors like EBITDA (earnings before interest, tax, depreciation, and amortization), industry capitalization rates, purchase price, expected cash flow, and financing options all play a role in evaluating ROI.

Due Diligence Is Essential

Due diligence is non-negotiable. Thoroughly examine all aspects of the business—financial records, contracts, legal issues—to avoid unpleasant surprises post-acquisition. Seek professional advice to ensure a comprehensive understanding and informed decision-making.

Leverage Experience

Your experience is invaluable. If entering a new industry, consider partnering with someone knowledgeable or hiring key personnel. Retaining the seller post-sale can also provide continuity and valuable insights.

Financial Planning from the Start

Navigating financing options early on is critical. Economic uncertainties mean securing funding can be complex, so explore diverse avenues to avoid last-minute obstacles derailing your acquisition.

Engage Professional Support

While professional services come at a cost, they’re crucial for a successful acquisition. Accountants, solicitors, financial advisors, and business brokers provide expertise and guidance, enhancing your chances of a smooth transaction.

Conclusion

Acquiring a business demands meticulous planning and execution. By understanding your motivations, conducting thorough research, performing due diligence, leveraging experience, and seeking professional support, you can embark on your journey as a successful business owner through acquisition. With clear strategies and professional guidance, your path to ownership can be both rewarding and successful.

Are you buying a business in Perth? Do you have a Perth business for sale? For more information on how you can get the best results, contact Angela at Advance Business Brokers today.

August 2024

AUSTRALIA’S CHILDCARE SECTOR: A LANDSCAPE OVERVIEW

Industry Dynamics

Australia’s childcare sector faces diverse external influences and trends, crucial for stakeholders navigating its dynamic landscape.

Key External Drivers

1. Regional Demand: While regional areas experience high demand for childcare, metropolitan regions struggle with supply shortages, emphasizing the need for diversified services.
2. COVID-19 Impact: The pandemic disrupted sector revenues, but signs of stabilization indicate resilience and adaptation.
3. New Operators Entry: Fresh operators introduce competition, signalling market shifts and demanding innovation.
4. Competitive Landscape: Long day care competes with government-funded preschools, reflecting changing family preferences.
5. Staffing Challenges: Rising wages and staff shortages prompt strategic talent management to control expenses.

Trends Shaping the Industry

1. Supply Challenges: Declining development opportunities and rising costs impact yield compression.
2. Investor Response: Investors compete for quality centres amidst diminishing supply.
3. Drivers of Demand: Limited investment opportunities, government support, and future rate cuts drive demand.

Government Initiatives and Demand

Government initiatives aim to enhance affordability and conditions within the sector, supporting workforce participation.

1. Cheaper Childcare: Increased Childcare Subsidy rates improve accessibility across income brackets.
2. Demographics and Demand: Subsidies cover 92% of families, supporting economic participation.

Childcare Leasing Market

The leasing market evolves towards comprehensive early learning centres, with considerations for location, learning approaches, and tenant preferences.

1. Location Considerations: Single-level centres are favoured, but inner-city locations may require multi-level buildings.
2. Learning Approaches: Montessori preschools introduce individualized learning.
3. Tenant Preferences: Large national operators offer security, while smaller operators may provide flexibility.
4. Optimal Centre Size: Centres with 80 to 110 places balance child-to-teacher ratios and operational efficiency.

Conclusion

Australia’s childcare sector experiences rapid evolution driven by external forces and internal dynamics. Stakeholders must embrace change, innovate, and understand market shifts to thrive in this vital industry.

Summary of an Article by Frichot Lawyers

Commercial leases often include an option clause allowing tenants to renew their lease under certain conditions. Although landlords aren’t obligated to offer renewal options, they often benefit both parties in maintaining a long-term commercial relationship. Understanding the process of exercising an option to renew is crucial for tenants.

When considering option renewal periods, tenants must notify the landlord within the specified timeframe, usually termed the ‘option exercise window.’ 

This notification must be in writing, following the lease agreement guidelines. 

After notification, the landlord acknowledges and prepares the new lease, either with the same terms or through a deed of renewal. Seeking legal advice is recommended to ensure favorable terms.

Diarizing the option renewal period is essential, typically falling three to six months before the lease term ends. 

Failing to exercise the option within this timeframe can lead to forfeiture, as courts strictly interpret renewal periods. While courts can override lease agreement requirements, it’s rare and costly.

Providing correct notice is crucial, following the lease agreement’s format, addressing the landlord, and complying with execution and timeframe requirements. Despite appearing straightforward, exercising an option can become complex, underscoring the need for legal advice.

In conclusion, exercising a commercial lease renewal option requires careful attention to formalities. Failure to comply may result in forfeiture of the option. 

Tenants should ensure the new lease reflects their current agreement or any variations. Seeking professional advice tailored to individual circumstances is crucial to understanding rights and responsibilities in lease renewal matters.

“This newsletter is intended to provide general information.

You should obtain professional advice before you undertake any course of action.”

Frichot Lawyers Fremantle
Level 1, Manning Buildings
135 High Street Mall, Fremantle WA 6160,
Email: reception@frichot.com.au

“Are you buying a business in Perth? Do you have a Perth business for sale? For more information on how you can get the best results, contact Angela at Advance Business Brokers today.”

Ask anybody who has done it, and invariably, the answer is “managing people”.

I’ve heard it compared to running a kindergarten or herding cats – neither of which sounds like fun. 

For many years, I would have answered the same: managing people is hard!

But then something changed – one day, I realised that I had the perfect mix of perfect people. And once you get that mix right, you will never look back.

But how do you get there in the first place? 

My journey was part management, part happy accident.

Many years ago, I adopted the mantra, “employ really great people, then let them do what they are good at”.

This flies in the face of most HR advice, which insists people must be managed. They need job descriptions and policies. They need procedures and annual performance reviews.

Here is a radical question – Do they?

What if you could build a culture of freedom and responsibility? Spoiler alert: You can.

Full disclosure: This idea came out of Netflix, and I use it because it is brilliant.

Things you will need to do:

• Treat people like adults (and obviously, they will need to act like adults).
• Communicate constantly about the good and the bad stuff.
• Practice radical honesty and be fully authentic – and expect your people to do and be the same. We all know humans hate being lied to.
• Debate the facts vigorously – you want your people to challenge each other – but in a way that encourages growth and creativity – not defensiveness and nastiness.
• Offer competitive salaries to keep your staff. Ask yourself: if they decided to leave today and you wouldn’t try to keep them, are they truly the right fit for your team?

The best thing you can do for your employees is hire amazing people to work alongside them. A great workplace is one that offers outstanding work colleagues.

Responsible people thrive on and are worthy of the freedom to do what they are good at!

“A radical take, but it works wonders for us”.

Jackie Crank

Chief Education Officer: 

West Coast Property Training
26 Winton Rd.
Joondalup, Western Australia 

Are you buying a business in Perth? Do you have a Perth business for sale? For more information on how you can get the best results, contact Angela at Advance Business Brokers today.

Today, we’re delving into a crucial topic for anyone looking to elevate their childcare business—Strategic Growth.

Scaling your childcare business goes beyond just increasing enrolment numbers. It’s about growing in a sustainable and aligned manner with your mission and values. Strategic growth ensures that you’re not just getting bigger, but you’re getting better.

Here are some key areas to focus on for strategic growth:

• Financial Planning: Develop a solid financial plan that includes budgeting for new hires, additional facilities, and operational costs.
• Staffing: Invest in professional development and create a strong company culture to attract and retain top talent.
• Technology: Utilize childcare management software to streamline administrative tasks and free up time for focusing on the children.
• Marketing: Tailor your marketing efforts to effectively reach your target audience through various channels.
• Facilities: Ensure that any expansion aligns with your brand and provides a safe, stimulating environment for children.
• Regulatory Compliance: Stay up to date with local and national regulations to ensure compliance as your business grows.

Don’t overlook the importance of the onboarding process. A smooth onboarding process for new staff and families helps in retaining staff and building strong relationships with families, ultimately contributing to the long-term success of your childcare centre.

In conclusion, strategic growth requires careful planning and execution, but the rewards can include a thriving business and the opportunity to positively impact more young lives and is well worth the effort.

Are you buying a business in Perth? Do you have a Perth business for sale? For more information on how you can get the best results, contact Angela at Advance Business Brokers today.

Don’t start from scratch when you can buy a business

Why reinvent the wheel when you can acquire an existing business?

Starting from scratch may seem like a blank canvas, but it often entails a long and uncertain journey. In contrast, buying an existing business offers several advantages that can make the entrepreneurial journey smoother and more lucrative. Let’s delve into the details of why you might choose not to start from scratch and, instead, consider purchasing an established business.

1. Proven Track Record: An existing business comes with a history and a proven track record. You can assess its performance, profitability, and customer base. This historical data provides valuable insights into the business’s potential and risks, which is challenging to ascertain when starting from scratch.
2. Customer Base and Cash Flow: When you buy a business, you inherit an existing customer base. This means you don’t have to spend time and resources building brand awareness and attracting customers. You also acquire a revenue stream, ensuring that you have money coming in from day one.
3. Operational Systems and Infrastructure: An established business typically has operational systems in place, including processes, suppliers, and staff. This can save you the time and effort it takes to set up these systems yourself. It also ensures that the business is running efficiently from the start.
4. Brand and Reputation: Building a brand and a positive reputation in the market takes time and effort. When you buy a business, you acquire its brand equity and the trust it has built with customers. This can significantly reduce the time it takes to establish credibility in the market.
5. Reduced Risk: Starting a new business involves many uncertainties. There’s a high risk of failure, especially in the early stages. Buying an existing business with a proven concept and customer base can significantly reduce this risk, making it a safer investment.
6. Immediate Revenue: As an entrepreneur, one of your primary goals is to generate revenue. Buying a business allows you to start earning money immediately. This can be crucial, especially if you have financial obligations or want to see a return on your investment sooner.
7. Faster Growth: Purchasing an established business provides the opportunity for rapid growth. You can build upon the existing foundation and implement improvements to increase profitability and market share more quickly than starting from scratch.
8. Expertise and Support: In many cases, the previous owner will stay on for a transition period, providing valuable insights, training, and support. This mentorship can be invaluable, helping you navigate the nuances of the business and industry.
9. Cost-Efficiency: While acquiring an existing business may have a higher initial cost compared to starting from scratch, it often proves to be more cost-effective in the long run. The time and resources saved, along with the immediate revenue stream, can outweigh the initial investment.
10. Market Entry: Buying an existing business can be an effective way to enter a new market or industry. You can bypass many of the challenges and barriers that newcomers often face when trying to establish themselves.

In conclusion, buying an existing business offers a range of benefits, from a proven track record and immediate cash flow to reduced risk and faster growth. While it may require a significant upfront investment, the long-term advantages make it a compelling option for many entrepreneurs looking for a smoother and more assured path to business success.

Are you buying a business in Perth? Do you have a Perth business for sale? For more information on how you can get the best results, contact Angela at Advance Business Brokers today.

Steps to Ensure a Smooth Transition

The decision to exit your business is a significant milestone that necessitates thorough planning and strategic considerations. Whether your aim is retirement, pursuing new opportunities, or desiring a change, a successful exit requires careful foresight and meticulous preparation. If you’re contemplating leaving your business in 2024, here’s a comprehensive guide on what steps to take now to ensure a smooth transition.

Define Your Exit Strategy

Before delving into the exit process, it’s crucial to define your exit strategy. Assess your personal and professional goals, whether it involves selling to a third party, passing the business to a family member, or exploring mergers and acquisitions. Clearly outlining your objectives will shape the entire exit plan.

Financial Health Evaluation

Evaluate your business’s financial health to identify areas for improvement. Clear any outstanding debts, optimise profitability, and ensure your financial records are accurate and up-to-date. A robust financial foundation not only enhances the value of your business but also streamlines the due diligence process for potential buyers.

Engage a Business Broker

Partnering with a reputable business broker is a crucial step in the exit journey. Their expertise in valuations, market trends, and deal negotiations can be invaluable. A business broker will guide you through the complexities of the process, ensuring you make informed decisions at every stage.

Craft a Business Information Memorandum

Work closely with your business broker to create a detailed Business Information Memorandum (BIM). This document serves as a comprehensive overview of your business, covering its history, financial performance, market position, and growth potential. A well-crafted BIM is essential for attracting serious buyers.

Assess and Enhance Business Value

Consider ways to enhance the value of your business before entering the market. This may involve addressing operational inefficiencies, strengthening customer relationships, or investing in strategic initiatives. The goal is to present a business that is not only profitable but also positioned for future success.

Build a Competent Management Team

A strong and capable management team adds immense value to your business. Ensure that your team is well-equipped to handle operations independently, assuring potential buyers of a seamless transition. A competent management team is an attractive asset for those looking to acquire a business.

Diversify Revenue Streams

Reducing dependency on a single revenue stream or a handful of key clients enhances the stability and attractiveness of your business. Diversify your customer base and explore new markets to showcase the potential for sustained growth under new ownership.

Legal and Compliance Check

Address any legal issues and ensure compliance with all regulations. Thorough documentation of contracts, agreements, and legal obligations is essential. A clean legal standing not only streamlines the sales process but also provides confidence to potential buyers.

Craft an Impactful Pitch Deck

In addition to the BIM, create a compelling Pitch Deck that highlights key aspects of your business. This visual representation should tell a cohesive and engaging story, emphasising your business’s unique strengths, achievements, and growth opportunities. Collaborate with your business broker to refine and optimise the Pitch Deck for maximum impact.

Stay Informed with Market Research

Regularly update your knowledge of market trends and industry dynamics. Understanding the current market conditions will help you set a realistic asking price and identify potential buyers. Leverage your business broker’s expertise to conduct thorough market research and position your business effectively.

Remember, exiting your business in 2024 is a multifaceted journey that demands careful planning and strategic execution. By defining your exit strategy, partnering with a business broker, and addressing key aspects like financial health, business value, and legal compliance, you pave the way for a successful transition. As a business owner, your proactive approach and collaboration with professionals will not only enhance the value of your business but also set the stage for a prosperous exit.

Are you buying a business in Perth? Do you have a Perth business for sale? For more information on how you can get the best results, contact Angela at Advance Business Brokers today.

Perth, the capital city of Western Australia, has become a coveted destination for business buyers in recent years. With its booming economy, exceptional quality of living, and a wide array of businesses for sale in Perth it has established itself as a hotspot for entrepreneurs. 

Perth offers a wide range of business opportunities across various industries. The city is home to thriving sectors such as mining, construction, tourism, healthcare, and technology. These industries provide a solid foundation for business owners to establish themselves and thrive in Perth’s competitive market.

Perth is also witnessing the rise of emerging business sectors such as renewable energy, agritech, and digital marketing. These growing industries present themselves as exciting opportunities for people looking to buy a business and capitalise on emerging trends and innovative business models.

Why Perth?

Honestly, why not? 

Perth offers a fantastic lifestyle that appeals to residents, tourists and business buyers. Unlike some other major cities, Perth provides a balance between affordable living costs and a comfortable lifestyle. The cost of living is more reasonable compared to cities like Sydney or Melbourne, allowing entrepreneurs to stretch their budget further.

Additionally, Perth’s outdoor and recreational opportunities are a big draw. With pristine beaches, stunning national parks, and a vibrant arts and culture scene, residents can enjoy a high quality of life outside of work. This ideal work-life balance is an important factor for individuals looking to buy a business and settle in Perth.

Another thing to consider is the generous support and incentives provided by the Western Australian government. There are various government programs and grants available to help business owners turn their dreams into reality. Whether you’re a first-time business buyer or a seasoned veteran, these programs can provide you with the financial boost and guidance you need to succeed.

Are you buying a business in Perth? Do you have a Perth business for sale? For more information on how you can get the best results, contact Angela at Advance Business Brokers today.

News story: Grants of up to $25,000 are now available to support the regional Early Childhood Education and Care sector.

Last updated: 22 January 2024

https://www.wa.gov.au/government/announcements/grants-now-open-attract-child-care-educators-regions

The Attraction and Retention Packages for Regional Child Care Workers Program enables regional Local Government Authorities (LGAs) to apply for grant funding to attract and retain educators to regional Western Australia (WA).

This is the third round of funding to be delivered under the program with a total of $530,869 distributed so far to regional LGAs. 

The funding is part of a 2021 State Government commitment of $1 million over four years to support the attraction and retention of early childhood education and care workers in regional WA. 

The program will fund initiatives that aim to attract and retain educators in the regions, including:

• subsidised accommodation/housing
• intrastate travel relevant to the project
• relocation packages
• training and professional development
• support for educators to complete their practicums (including wages for relief staff)
• purchase of small capital items to support online learning.
• workshops, seminars and talks to recruit prospective educators.
• purchase of equipment required to deliver Family Day Care (Family Day Care only)
• Family Day Care one-off set up costs (Family Day Care only).

A webinar to provide information to interested grant applicants will be held on Monday, 29 January at 11am.  Interested applicants can RSVP for the session via email at eclir@communities.wa.gov.au by Thursday, 25 January 2024. 

Partnerships of more than one LGA may apply for a greater amount of grant funding commensurate with the number of LGAs and regional coverage.

Applications close at: 2:30pm on Friday 1 March 2024.

Visit the Attraction and Retention Packages for Regional Child Care Workers Program to find out more and apply.

Click HERE for the  Grant application and instruction form. 

Are you buying a business in Perth? Do you have a Perth business for sale? For more information on how you can get the best results, contact Angela at Advance Business Brokers today.

Selling a business can be, to say the least, a roller-coaster of emotions, fluctuating between being daunting, exciting, disappointing, and exhilarating, quite akin to Melbourne’s ever-changing weather. For many business owners, venturing into the sale of their own business can be like steering a second business altogether. It demands acute attention to detail and a deep understanding of the market, which is where a skilled business broker steps in to ease the process. These brokers ensure that the business is primed, well-presented, and rightly marketed to the apt audience, securing an efficient and desired result. The lingering question though remains, how to choose a broker who is just right? Here, we delve into some critical facets to ponder over while making this choice:

Licensing, Education, and Authenticity

Verifying the credentials of a business broker is non-negotiable. It is imperative to ensure that they are members of a reputed industry body such as the Australian Institute of Business Brokers (AIBB). In addition, ascertain if they maintain their qualifications through continuous professional development (CPD) conducted by credible institutions, further testimony to their commitment to adhering to industry standards and best practices.

Market Appraisals – Accuracy 

Knowing how a broker conducts market appraisals can be a deal-breaker. Reliable brokers lean on substantial market comparable data and apply appropriate multiples to EBITDA/PEBITDA based on solid evidence. They should offer a reasonable and grounded valuation, steering clear of inflating numbers just to win your business.

Marketing Strategy

The cornerstone of a successful sale is a broker’s marketing strategy. Are they preparing a meticulous information memorandum that paints your business in the best light? Their approach should cover a comprehensive plan delineating where and how they intend to advertise your business, be it on their website or via subscriptions to third-party platforms. It is prudent to inquire about the number of platforms they utilise and if they offer premium advertisement exposure for your business, to reach a broader and more targeted audience.

Selling Brokers vs Listing Brokers

Differentiating between a selling broker and a listing broker is vital. You would want to collaborate with a broker who is passionately immersed in the selling process, not just listing your business indiscriminately. A telling indicator here is their list-to-sell ratio; a commendable ratio signifies a broker’s active engagement in aiding clients to seal successful deals.

Fee Structure

Understanding the broker’s fee structure can save you from unexpected shocks later. Generally, brokers charge a listing fee coupled with a commission upon successful completion of the sale. Delve into the specifics of how they allocate these fees in promoting your business and ensure transparency in the dealings.

Balancing Exposure and Confidentiality

Striking the right chord between adequate exposure and maintaining confidentiality is indeed a delicate act. The broker should assure that the business details reach potential buyers while retaining sensitive information, a strategy that safeguards the existing business ecosystem while reaching out to prospective buyers.

Embarking on this journey of selling your business is a monumental step. Taking the time to select a broker who is not only seasoned but also has a well-rounded strategy can make all the difference. The ideal broker would have a proven track record, a robust marketing plan, and a deep network of potential buyers, laying down a pathway for a smooth, efficient, and successful sale. Remember, it’s not just about selling your business; it’s about finding the right steward for its next chapter.

Are you buying a business in Perth? Do you have a Perth business for sale? For more information on how you can get the best results, contact Angela at Advance Business Brokers today.

“Key Considerations for Buying a Business”

Acquiring a business is a significant endeavour, regardless of whether you’re an experienced entrepreneur or a newcomer. This path presents immense potential, but it’s not without its challenges. To navigate this journey successfully, strategic planning is essential. Let’s explore crucial considerations that can guide you through this process.

Exploring Your Motivation

Before diving into business acquisition, take a moment for self-reflection. Clarify why you’re interested in buying a business. Is it driven by passion, the desire to turn a hobby into a venture, autonomy, financial independence, or leveraging expertise? Your motivations will shape your business goals and decisions throughout this journey.

Distinguishing between purchasing a business and buying a job is crucial. Both have their merits but differ significantly in responsibilities and expectations. Buying a business should ideally offer scalability, while buying a job might involve more hands-on daily operations. 

Starting from Established Grounds

Purchasing an established business comes with notable advantages over starting from scratch. Although starting anew might seem cost-effective, an existing business brings a customer base, revenue streams, employees, equipment, premises, and often, a reputable brand. This saves substantial time and effort needed to build a brand and customer base from scratch.

Expediting Growth Through Acquisition

Business growth can occur organically or through acquisitions. Acquiring an existing business strategically expedites growth. Buying a business in a related industry can create economies of scale, access new customer segments, explore different distribution channels, or offer complementary products/services, accelerating growth significantly.

Strategic Selection of Business Opportunities

Choosing the right business opportunity is a critical initial step. Thoroughly researching the industry, understanding market trends, competition, and relevance is crucial. Assess the target business’s financial health, operations, legal aspects, and existing contracts. Planning an exit strategy from the outset is wise for unforeseen circumstances or future sales.

Assessing Returns and Investment

Assessing Return on Investment (ROI) varies based on individual financial goals and risk tolerance. There’s no one-size-fits-all formula. Consider factors like EBPITDA and industry-standard capitalization rates. Evaluating vendor purchase price, expected cash flow, and bank propensity for a loan aligns your investment with financial objectives.

Thorough Investigation: A Non-Negotiable Step

Thorough due diligence is non-negotiable. Skipping this process can lead to catastrophic outcomes. Scrutinize financial records, contracts, legal matters, and potential issues. Seek professional assistance from legal and financial advisors.

Leveraging Prior Experience

Previous experience is pivotal for successfully managing an acquired business. If entering a new industry, consider partnerships or key hires to bridge knowledge gaps. Retaining vendors post-sale for an extended handover period can be invaluable.

Financial Planning and Early Considerations

Given economic uncertainties, navigating business acquisition financing is complex. Exploring funding options early prevents last-minute deal collapses due to financial issues.

Seeking Professional Assistance

Professional support, though costly, safeguards against costly mistakes. Accountants, solicitors, financial advisors, and Business Brokers offer invaluable expertise, ensuring a smoother transition into successful business ownership through acquisition.

It is the season to…

That which is valued is largely determined by personal, collective, and societal values. Share values promote and enable cohesion, integration, tolerance and understanding. Appropriately applied, values facilitate mutual respect. Win, Win.

At this time of the year many, regardless of religion or spirituality – if any- take pause to reflect and to value what they have (in its countless guises). Business leaders and extended business families should be encouraged to recommit to their core and essential values.

Contemplation could, and arguably should, extend to that which is right and to the rights of all. In both measures these should be underwritten – not in texts, but in beliefs and whom to believe.

In recent months I have read extensively and watched numerous movies about great people, leaders, innovators and creators. I have been floored. Most, if not all, of those individuals were flawed.

Notwithstanding those characteristics and deficiencies, they have been and are widely valued for their passions, visions, beliefs, and rights.

They were not and are not perfect, exceedingly good or, indeed great. However, they did contribute, and we are better because of it.

Therefore, strive to be better. The calendar year 2024 will be more compellingly attractive and fulfilling… for all. It’s up to you.

Have a joyous and endearing Christmas.

Are you buying a business in Perth? Do you have a Perth business for sale? For more information on how you can get the best results, contact Angela at Advance Business Brokers today.

December 2023

In light of rising interest rates and the challenges associated with securing loans, vendor finance emerges as a strategic option for business divestment. This method, gaining prominence post-COVID-19, involves the current business owner providing financial support directly to the buyer, bypassing traditional mortgage routes. Seeking legal and financial advice is crucial when opting for this approach in business acquisitions due to its specific conditions.

Key Benefits of Vendor Finance:

1. Wider Buyer Pool: Vendor finance makes business acquisition accessible to individuals or small enterprises with limited access to conventional financing, expanding the potential buyer pool.
2. Negotiation Flexibility: Both parties can tailor financing arrangements to meet unique needs, allowing for flexibility in negotiating sale terms.
3. Accelerated Transactions: Eliminating the need for third-party financing often speeds up the sale process, streamlining what can be a time-consuming procedure.
4. Strengthened Relationships: A shared financial interest in post-acquisition success fosters a closer working relationship between the buyer and seller.
5. Potential Price Enhancement: Sellers offering financing may command a higher sale price, making the business more appealing to buyers without immediate access to the full purchase amount.
6. Interest Income Generation: Sellers can earn interest income on the financed portion, providing an additional financial benefit.
7. Tax Advantages for Sellers: Depending on the business nature, sellers may defer certain capital gains taxes by spreading proceeds over time, subject to verification with relevant authorities and accounting professionals.
8. Risk Mitigation: Structured properly, seller financing can include safeguards such as collateral or personal guarantees to mitigate the risk of non-payment.
9. Increased Sale Success Rate: Offering financing can set a listing apart in a competitive market, potentially attracting more serious and committed buyers.
10. Smooth Transition: The seller’s continued involvement through vendor financing contributes to a smoother ownership transition, benefiting both parties.

Despite these advantages, it’s essential to acknowledge inherent risks, particularly for sellers. Thorough due diligence on the buyer and meticulous structuring of the financing arrangement are crucial. Seeking guidance from legal and financial professionals is highly recommended to ensure a well-structured and mutually beneficial vendor financing agreement.

Are you buying a business in Perth? Do you have a Perth business for sale? For more information on how you can get the best results, contact Angela at Advance Business Brokers today.

November 2023

Leasing or buying plant, equipment and vehicles

When choosing whether to buy or lease plant, equipment or vehicles for your business, you need to consider what your business needs are and your finances.

Leasing vs buying

When acquiring plant, equipment and vehicles for your business, you have the option to lease or buy.

Leasing means you borrow your plant, equipment or vehicle under a contract. Leasing requires less commitment than buying and makes it simple to upgrade when your lease finishes. However, there may be restrictions in place on what you can do with the plant, equipment and vehicles you lease, depending on your contract.

Buying means you purchase and own the plant, equipment or vehicles outright. If you don’t have sufficient cash to buy it outright, there are finance products available to help you. The financier will keep an interest in your plant, equipment or vehicle until they’re paid back. Buying will mean more commitment, as you won’t be able to simply return it after a lease runs out. It also means you have freedom to make alterations to fit your needs.

Leasing or buying a motor vehicle

A motor vehicle is a major expense. When deciding whether to buy or lease the motor vehicles you need for your business, consider the advantages and disadvantages of each option.

Pros and cons of leasing a vehicle

Pros

• You can easily upgrade your vehicle every two or three years when your lease ends.
• You generally need less money upfront to lease.
• As the vehicles you lease tend to be newer, they might still be covered by their manufacturer’s warranty. Your lease may also cover some of the repair costs if required.
• It may make managing your cash flow easier, as you won’t have your money tied up in a depreciating asset.

Cons

• It can end up costing just as much as getting a car loan when you take into account the monthly repayments, fees and charges.
• You won’t be able to make any alterations to the vehicle.
• You can’t claim the car as your own asset for other borrowing or financial purposes.
• You may not be able to get approval for a lease if you have a bad credit history.
• You may be locked in to making payments for the entire lease period, even if you cease using the car.

Pros and cons of buying a vehicle

Pros

• With a car loan, you can make similar repayments to leasing, but will end up owning the car outright.
• Whether you take out a car loan or buy the vehicle outright, you can claim the car as your own asset.
• You will have the freedom to modify the vehicle to meet your needs as long as the modifications are permitted within law.

Cons

• Buying usually requires a larger upfront cost than leasing.
• The value of your vehicle will depreciate in time, making your investment less valuable.
• If you use the vehicle to secure your finance it can be repossessed if you fail to make repayments.
• Upgrading your vehicle means you will need to go through the process of selling your current vehicle and buying a new one.

Tips to consider

Whether you’re leasing or buying a vehicle, keep these tips in mind:

• Make sure you deal with reputable companies who will help you work out the best option.
• Don’t just take the first deal you’re offered – shopping around can often secure you a much better deal. This includes shopping around for a good rate if you’re taking out a car loan.
• If you decide to lease your vehicle, consider how much you can afford to pay each month.
• Consider other options before you decide to sign anything at the dealership.
• Look into buying a demonstration model vehicle. It can often save you money and may come with a variety of extras.

If you’re still unsure whether it’s better for you to buy or lease, seek advice from your registered tax professional or financial adviser to help you make the best financial decision for your business.

Financing options to help you buy a vehicle

If you want to buy but don’t have enough finance to pay upfront, your business can obtain finance through a bank or other financial institution. Generally the loan will be secured by using the car as a guarantee.

If you purchase your car from a dealership, they often will have financing available as an option. Make sure you do your research before signing up for dealer financing options, as they may include rates and fees that add to the cost. Dealer finance can also include a large payment at the end known as a ‘balloon’ or ‘residual’ payment. This is designed to lower your ongoing repayments, but you will need to plan ahead for how you will fund this lump sum when the finance term ends.

Did you know?

Guaranteed asset protection (GAP) insurance can cover your remaining repayments if you purchase your vehicle under a loan, and the vehicle is written off due to accidental damage or theft before you’ve finished repaying it.

GAP insurance will have limits on how much the policy will pay out, so make sure the limit on your policy is enough to cover the difference between the amount remaining on your loan and the amount insured by your motor vehicle insurance.

You will usually be required to have a comprehensive motor vehicle insurance policy before you are eligible for GAP insurance.

Talk to your insurance broker, financial advisor or registered tax professional for more information.

Goods and services tax (GST) and motor vehicles

If you use a motor vehicle for your business and you’re registered for GST, you might be entitled to claim a credit for the GST you‘ve paid in the price of the vehicle as long as you have a tax invoice.

If your vehicle is used partly for business, you will need to apportion your GST credits based on how much you use the vehicle for business purposes. You can make adjustments later if the proportion of business use changes. If your vehicle is a car, you can only claim GST credits up to the luxury car tax limit.

You have to account for GST when you dispose of a motor vehicle if it is a taxable sale.

Find out more on GST and motor vehicles on the Australian Taxation Office website, including information on rules concerning:

• luxury cars
• leased vehicles
• purchasing second-hand
• trade-ins
• disposal to an associate
• disposal by a charity.

Leasing or buying plant and equipment

Your plant and equipment, such as machinery, tools, appliances, office furniture and office equipment, is vital for you to operate your business. To make sure you are getting the best deal, do your research before you decide whether to buy or lease what you need.

Aside from comparing the overall costs of buying or leasing, make sure you also consider:

• ongoing maintenance
• tax deductions that you may be eligible for
• equipment becoming out-dated or expiring
• the flexibility between leases and loans.

You can have a mix of leased and purchased equipment to best fit your business’s situation and needs.

Pros and cons of leasing your plant and equipment

Pros

• It’s easier and quicker to update to the latest equipment if you lease it than if you buy it.
• You can budget for the equipment over a longer time as you will make smaller regular payments rather than paying a lump sum upfront to buy.
• You may be able to claim your leasing costs as a tax deduction each year if the equipment is solely used for your business.
• You will have more flexibility to try something new, as you don’t have as much commitment as if you buy. This also gives you more choice when it comes to the type of equipment you get.
• If something breaks or has issues due to normal wear and tear, the leasing company is usually in charge of fixing the equipment, saving you maintenance and repair costs.

Cons

• You may end up paying more over time than you would if you had bought it upfront.
• As you don’t own the equipment, you won’t be able to sell the equipment once you are finished. So there is no potential to make any money back.
• You may be forced to pay for and keep a piece of equipment for longer than you need if the lease term is strict.
• Depending on your leasing company, the brands or models you want could potentially be unavailable and you may have to settle for something else.
• As maintenance usually is the responsibility of the leasing company, it may be difficult to get things fixed if you disagree about the terms and conditions of the repairs. There may also be additional problems if your leasing company requires you to use certain repairers, who may not be located near you.

Pros and cons of buying your plant and equipment

Pros

• You have complete control over what you get. You’re not limited by a leasing company’s stock, so if you want a particular model or brand, you have the ability to order exactly that.
• As repairs and maintenance are your responsibility, you can make sure problems get fixed immediately.
• You can sell the equipment when you no longer need it, allowing you to recover some of the cost.
• You may be able to claim depreciation costs as a tax deduction.
• You won’t have to deal with agreements and contracts as you simply pick out what you need and pay for it. This can be good for smaller equipment that is easy to store, as well as equipment that has a long life.
• Since you own the equipment, you can alter it according to your needs.

Cons

• It may be difficult to pay for expensive equipment all at once. If you don’t have the cash flow to purchase what you want, you may be forced to settle for a lower-cost option.
• You will have to pay for repairs and maintenance unless it’s covered by warranty or insurance. Keep an eye on the product warranty to see if it covers repairs and for how long.
• For technology that is outdated quickly, you are stuck with it because you own it and may not be able to recover much value back even if you sell it.

8 tips to consider before you buy

When buying equipment for your business, it’s important that you shop around for the best deal that suits your needs. You should also carefully assess the long-term value of each piece of equipment you’re purchasing.

Before you buy, consider these eight tips:

1. Make a list – It’s important to first create a list of your equipment needs and wants before you start purchasing. This list should form part of your business plan and be something you continue to update and revise as your business grows.
   Check out our Plan for success module for more on business planning.
2. Check if there are items you can outsource – As part of your list, identify what you might be able to outsource instead of having to purchase the equipment. For example, you may be able to get by without a copier or printer and pay for external printing services to cut down on your initial capital investment and to avoid cluttering your workspace.
3. Design your space – No matter the kind of business you have; a salon, restaurant, office or retail store, it’s important to have accurate measurements of your workspace before you buy your equipment.
   Measure the area where you plan to place your equipment to find out the dimensions you’ll need. You could also use a digital space planning tool to first digitally design your space and work out the furniture and fixtures you need.
4. Work out if you are buying new or used – While you may prefer to buy everything new, when you’re working with a limited budget, you can save money by buying some of your equipment second hand. Consider what equipment you need to buy new and what equipment you may be able to buy used.
5. Choose quality over price – Don’t simply look at the price when deciding what to purchase. If a piece of equipment frequently breaks down or doesn’t meet your needs, it could end up costing you more than if you had purchased something more expensive in the first place. While price is important in deciding what to purchase, the greater focus should be on quality and value.
   If you find a deal on something you need, take the time to do some research on the model. Looking at consumer reviews and feedback can give you an indication of whether the item is good quality and will meet your needs.
6. Check if there is a local repairer for your equipment – If your equipment requires repairs, having a local repairer who can fix it can save you time and money. It’s also a good idea to check if spare parts required for your equipment are readily available or can be imported.
7. Consider what your most important items are – For the critical items you need to run your business, you might consider spending a little extra for better quality and reliability.
   For example, if you’re running a restaurant, it’s important to make sure your critical items such as knives, ranges and pots and pans can produce quality food while withstanding heavy use.
8. Check your available cash – If you don’t have enough cash to cover the cost of all of your equipment needs, there are financing options such as a small business loan or buying through a hire purchase agreement. If you choose to get finance through these options, consider the interest rate and how long you’ll take to pay back the amount owed. Talk to your financial advisor or tax professional if you are unsure.

Are you buying a business in Perth? Do you have a Perth business for sale? For more information on how you can get the best results, contact Angela at Advance Business Brokers today.

October 2023

Why a Business Broker Should Be a Vital Member of Your Business Team

In the dynamic and ever-changing world of business, it is crucial to have a team of skilled professionals who can provide guidance and expertise throughout various stages of entrepreneurship. Among the key individuals often overlooked is the business broker. In this article, we delve into the significant role that a business broker plays in facilitating successful transactions, mitigating risks, and maximizing value for business owners. We explore the reasons why engaging a business broker should be a priority when assembling your business team.

Navigating the Complexities of the Market:

The economic landscape is rife with complexities, making it challenging for business owners to navigate the intricate web of market dynamics. A proficient business broker possesses a comprehensive understanding of market trends, industry-specific nuances, and buyer behaviours. This deep knowledge allows them to serve as a valuable guide through the convoluted paths of business transactions.

By leveraging their expertise, business brokers can effectively position your business within the market, ensuring maximum exposure to potential buyers. They conduct thorough market analyses, identifying optimal pricing strategies and attractive selling points. Their ability to identify and target the right audience results in an increased likelihood of finding suitable buyers, thereby expediting the sales process.

Valuation/Appraisal Expertise and Deal Structuring

Determining the accurate value of a business is a complex task that requires a nuanced understanding of financial analysis, market conditions, and industry benchmarks. Business brokers possess the necessary expertise to conduct a thorough valuation, considering both tangible and intangible assets. By employing various valuation methodologies, such as income-based, market-based, and asset-based approaches, they can establish a fair and competitive price for your business.

Furthermore, a skilled business broker excels in deal structuring. They are adept at negotiating terms and conditions that align with your specific goals and expectations. With their extensive experience in managing negotiations, business brokers ensure that potential obstacles are skilfully overcome, allowing for a smooth and satisfactory transaction.

Confidentiality and Discretion

Maintaining confidentiality and discretion throughout the sales process is of paramount importance for business owners. Public knowledge of a pending sale can trigger unrest among employees, suppliers, and customers, potentially disrupting business operations. A business broker acts as a trusted intermediary, safeguarding the privacy of your business affairs.

By expertly qualifying potential buyers through confidentiality agreements, business brokers ensure that only serious and qualified individuals gain access to sensitive information. They skilfully manage the flow of information while protecting the interests of all parties involved, enabling the business owner to focus on running the business with minimal disruption.

Navigating Legal and Regulatory Requirements

Navigating through the intricate web of legal and regulatory requirements is a daunting task for any business owner. Business brokers, with their in-depth knowledge of legal frameworks and regulations, serve as valuable resources. They possess an understanding of the complexities associated with tax implications, contracts, licenses, permits, and compliance issues. Business brokers act as intermediaries between lawyers, accountants, buyers and sellers in facilitating seamless transactions. 

A business broker collaborates closely with legal professionals, ensuring that all necessary documentation is not only prepared accurately but also in compliance with relevant laws and regulations. Their expertise in this domain mitigates potential risks and pitfalls, protecting the interests of both the buyer and the seller.

Conclusion

Engaging a business broker is an investment that can yield substantial benefits during the process of buying or selling a business. The unique knowledge, skills, and experience they bring to the table complement the expertise of other members of the business team. The business broker’s ability to navigate the complexities of the market, provide accurate valuations, ensure confidentiality, and navigate legal requirements is invaluable to business owners.

In an increasingly competitive business landscape, it is imperative to have a team of professionals who can strategize, negotiate, and execute transactions with precision and efficiency. By including a business broker in your team, you significantly enhance the chances of a successful business transaction, while minimizing risks and maximizing value. Embrace the role of a business broker as a crucial member of your business team and elevate your prospects for business success.

The final component assumes particular importance when contemplating the involvement of a business broker. It is imperative to select a broker who possesses the adeptness to maneuver through the intricacies of the sale, while also effectively communicating with the legal representatives, accountants, and other professionals engaged in the transaction. This aspect becomes even more crucial when dealing with transactions of substantial value.

Are you buying a business in Perth? Do you have a Perth business for sale? For more information on how you can get the best results, contact Angela at Advance Business Brokers today.

October 2023

The greatest difference between the best and the rest is mindset. The way one thinks determines their entire life’s path. The most successful people are those who don’t focus on the negative or obstacles, but instead focus on their vision, their strategy, and their goal. Thinking about your future or about your past will only hinder you from focusing on the present moment. 

Every day, no matter how much you may want to give up, there are going to be some things you can’t control. The question is: Will you let that stop you or will you use it as motivation to achieve your goals?

A positive attitude makes all the difference. It can help you keep going when things don’t go your way, stay motivated during tough times, and stay focused on what matters most in your life. When you have a growth mindset, you believe that your skills and abilities can be improved through learning, practice and effort. So how do you start?

Change those thoughts over time! Start by identifying the areas where your thinking makes you uncomfortable, such as thinking: “I’m too old to learn something new;” “I don’t have enough patience for this;” or “I’m not good at anything,” then look for ways to gradually alter these beliefs.

Your mindset is so important. The way you think about your life has a direct impact on how you live it. If you want to be successful, you need to start with the right mindset towards success. Achieving goals isn’t just about hard work or dedication – it’s also about how you see yourself and what you expect from yourself. 

Here’s 6 ways to develop the right mindset to set you up for success:

1. Accept challenges

You’ve probably heard the old saying, “the journey is more important than the destination.” And it’s true. The secret to success is all about taking on challenges and learning from them, whether they’re big or small. By seeking out challenges, you’ll put yourself on a path to learn more lessons, take more risks, and achieve greater rewards than you would on the safest route through life.

Success is hard work and requires a lot of dedication. The first step to success is to realise that the journey is more important than the destination. If you want to succeed, you must be willing to take on challenges. Accept that there will be setbacks along the way, but don’t let them stop you from pursuing your goals. As long as you’re open-minded and willing to learn from your mistakes, you can turn every challenge into an opportunity for growth.

2. Set both long-term and short objectives.

Start by setting both long-term and short-term objectives. From there, break each one down into simple steps that you’ll need to take in order to achieve your goal. This will help you build a well-organised plan for the journey ahead. To help get you there, I’ve identified five steps that will help set your mindset for success. They are: Reflecting on the past, setting both long term and short term objectives, Nurturing your confidence, Making a habit of celebrating progress, Avoiding negative self-talk. Remember, maybe it’s not possible for you to run a marathon right now but maybe being able to walk at least five miles each day would help!

3. Explore New Things 

It’s easy to get stuck in a rut, so try new things! Just like you should seek out challenges, don’t be afraid to try new things. You rarely know which new interest could develop into a lucrative new profession, for instance. You can allow yourself to grow by exposing yourself to new hobbies, people, experiences, and locations. You might feel like it’s too much work at first but remember that it’s all about the journey! Don’t just sit around when there are so many other options out there.

4. Enhance your professional and personal skills

You must constantly learn and develop if you want to be truly successful. Make an effort to acquire practical skills in both your personal and professional life. For some people, this can mean establishing a morning routine and rising earlier. Others might decide to enroll in courses, get tutoring, or read a lot of self-help literature in order to achieve their personal development objectives.

5. Learn From Failures

You know that the ability to bounce back is a big part of what makes someone successful. Admit your failures and learn from them, that’s the way to get better at anything.

6. Be surrounded by the best 

Our mindsets are significantly influenced by our environment. We are social beings who are influenced by people around us, after all. Be in the company of smart people who can share their knowledge with you and inspire you to advance both personally and professionally.

The process of modifying your mindset is slow. Accept that it will take time for you to adopt a positive view on life.  You’ll be able to push yourself more frequently and understand the advantages of going above and beyond the minimum level if you have a growth mentality.

Think carefully about the mental adjustments you want to make. Once you’ve figured that out, continue by refining your abilities and saying “yes” to chances that push you to grow and challenge you. Encourage yourself along the way, and don’t forget to regularly take ownership of your progress.

Are you buying a business in Perth? Do you have a Perth business for sale? For more information on how you can get the best results, contact Angela at Advance Business Brokers today.

WA tops national population growth

Australia’s population has recorded its fastest growth in 15 years as overseas immigration surged with WA achieving the most rapid growth of any state.

WA’s population grew by 2.3 per cent in the year to December 2022 compared to national growth of 1.9 per cent, the highest seen since 2008.

The Bureau of Statistics’ head of demography Beidar Cho said the key driver behind the high national growth was overseas migration.

While net overseas migration added 387,000 people to Australia’s population last year, natural increase (births minus deaths) added an unusually low 109,800 people.

This was down 23 per cent on the prior year, with the ABS saying COVID-19 mortality was the main contributor to an increased number of deaths and lower natural increase in 2022.

WA’s annual growth rate of 2.3 per cent equated to an extra 62,700 people, lifting the state’s population to 2.82 million – which is 10.7 per cent of the national total.

This growth put WA just ahead of Queensland (2.2 per cent) and Victoria (2.1 per cent) while Tasmania was the laggard with annual growth of just 0.5 per cent.

Queensland is traditionally Australia’s fastest growing state, courtesy of high interstate migration from the southern states.

WA’s high growth reflected contributions from three sources – net overseas migration added 37,910 people, natural increase added 14,164 people and net interstate migration added 10,593.

Notably, WA was one of only two states (with Queensland being the other) to achieve significant growth via net interstate migration.

As well as leading on annual growth, WA led on quarterly growth.

The state’s population was up 0.64 per cent in the December quarter, or 17,900 people, compared to national growth of 0.5 per cent.

WA’s quarterly growth came from net overseas migration (up 11,727), natural increase (3,074) and net interstate migration (3,113).

The data reveals some major shifts from long-term patterns.

The quarterly overseas migration was the highest since 2013 and followed negative growth during the COVID years, of 2020 and 2021.

Net interstate migration to WA has been consistently positive for the past three years and followed seven years of net population loss.

Are you buying a business in Perth? Do you have a Perth business for sale? For more information on how you can get the best results, contact Angela at Advance Business Brokers today.

Why buy a business that already exists instead of starting one from scratch?

What you are buying is a proven track record. An existing business has infrastructure, financial history, brand power, assets, staff and more. Some estimates say that one in three new small businesses in Australia fail in their first year of operation and two out of four by the end of the second year. By understanding the history of an established business, you are mediating the risk of starting from scratch.
 

The business sounds great, so… why are they selling?

The reasons for sale differ from business to business but don’t be afraid to ask us why the seller has decided that now is the right time to sell. Some owners wish to retire in the near future, others are relocating out of Perth. Some sellers simply had an end goal to sell after they had built a successful business – allowing them to move on to another venture. 

We operate with full transparency and in order to sell a business, we require a seller to provide full financial information which is available to potential buyers after they have been vetted and signed a NDA.
 

Is buying a franchise a good idea?

There has been a boom in franchising in recent years – you can find a franchise for sale in almost every industry. Unlike setting up your own business, when you buy a franchise the franchisor owns the brand, intellectual property and associated operating systems. You will benefit from a well-known brand, typically with a long history and a good reputation. The business model is established, so you will get access to refined procedures, operating manuals, stock control systems, financial systems and more. Franchises also tend to have good initial training, ongoing support and assist with marketing/advertising.  Banks will usually lend on a Franchise where they probably won’t on a non-franchise business in the same industry e.g. food 

When can I see the financials?

The majority of sales are confidential sales and as such potential buyers  are asked to sign a NDA (non-disclosure agreement). Once signed, you can review the business summary with financials. 

What happens if my offer is accepted?

If an offer is accepted a deposit is payable and a settlement date is set. Due diligence is completed subject to the buyer’s satisfaction. Depending on the business this could be very simple or more complex for larger businesses.
 

What is due diligence and who is responsible for it?

The buyer can ask any questions they would like to understand the full business picture and get the confidence they need to continue the business. For example; can the claimed revenue and profit be verified? You may also wish to see legal agreements such as licenses, permits, insurance policies, lease agreements, employee details, supplier contracts and more. The seller is responsible for collating information that the buyer requires. A solicitor and accountant can be engaged at this point for any professional advice. How long the due diligence process takes really depends on the business but you should allow roughly 15-30 days minimum.

What other costs need to be considered apart from the purchase price?

Stamp Duty, Settlement agent, cash flow, bank guarantee/bond if commercial lease.  Also any fees applicable to the industry where transfers are required and when purchasing a Franchise the up-front fees to the Franchisor.

Are you buying a business in Perth? Do you have a Perth business for sale? For more information on how you can get the best results, contact Angela at Advance Business Brokers today.

Selling a business can be a complex and emotional process, with a lot at stake for both the seller and the buyer. Unfortunately, many business owners make common mistakes when selling their business that can significantly impact the final outcome. This article will discuss some of the most common mistakes people make when selling their business and provide tips on how to avoid them.

1. Failing to Plan Ahead

One of the biggest mistakes business owners make when selling their business is failing to plan ahead. Selling a business generally isn’t something that can be done overnight – it requires a lot of preparation and thought. Many business owners don’t start planning for a sale until they are already in a financial crisis or experiencing burnout. 

To avoid this mistake, business owners should start planning for a sale one or even two years in advance. This will give them enough time to prepare the business for sale and address any issues that may reduce the value of the business. Planning ahead will also help business owners avoid feeling rushed and overwhelmed during the sale process.

2. Overvaluing the Business

Another common mistake that business owners make when selling their business is overvaluing it. This can happen for many reasons, including emotional attachment to the business, a lack of understanding of the market, or an unrealistic view of the business’s potential. However, overvaluing a business will often lead to a lack of interest from potential buyers or a lower sale price.

To avoid this mistake, business owners should have a realistic understanding of a fair market price for their business. This can be done by conducting a business appraisal that takes into account factors such as financial performance, market trends, and comparable sales. Having a clear understanding of this fair market price will help business owners set a realistic asking price and negotiate with potential buyers.

3. Neglecting Financial Records

Neglecting financial records is another common mistake that business owners make when selling their business. Well presented accounts for two years or more, is valuable in the  saleability of a business. Profit and Loss with a strong net profit figure and clearly identifiable add backs. E.g. interest, depreciation, Associated Directors/owners wages/superannuation.  

Buyers and their accountants will need to review financial records to evaluate the business’s financial health and potential for future growth. If financial records are incomplete or inaccurate, it can reduce the value of the business or even scare away potential buyers.

To avoid this mistake, business owners should maintain accurate financial records and be prepared to provide them to potential buyers. This includes income statements, balance sheets, cash flow statements, tax returns, and any other relevant financial information. Having accurate financial records can also help business owners identify areas where they can improve the business’s financial performance and increase its value.

4. Failing to Prepare the Business for Sale

Buyers will want to see that the business is well-maintained, organised, and ready to be transferred to new ownership. 

This may include organising files and documents, completing any outstanding repairs or renovations, and ensuring that all equipment and assets are in good working order. 

5. Not Engaging a Professional Business Broker 

Finally, many business owners make the mistake of not engaging a business broker to help them sell their business. Business brokers have the experience and expertise to help business owners navigate the complex process of selling a business. They can also help business owners identify and qualify potential buyers, negotiate the sale price, and ensure that all legal, financial and regulatory requirements are met.

It is important that the broker chosen has a thorough understanding of the business sales market in the industry the business is located in. This will also mean they should have a pool of potential buyers in their database. 

With less than 50% of businesses listed in Australia selling, and an average time on market of over 6 months it is critical that business owners take measures to avoid these mistakes to give the best chance of a successful business sale. 

Are you buying a business in Perth? Do you have a Perth business for sale? For more information on how you can get the best results, contact Angela at Advance Business Brokers today.

The five entities that a buyer may choose to set up to buy a business in are:

• A company
• A company and trust
• A trust on its own
• A partnership
• Sole trader

In my experience, the majority of buyers buy their business in a company entity. It is also becoming common for accountants to set up a combination of company and trust.

As always, what is best for your needs, is to be discussed with your accountant.

In Western Australia — where stamp duty is payable on the purchase price businesses — once the entity has been entered on the contract of sale, not so much as a letter in that entity name can be changed without the possibility of the State Revenue office of WA charging double stamp duty.

Stamp duty is charged on the sale price of the business in a couple of States. A buyer’s settlement agent or lawyer can advise the amount applicable, or you can go online via a calculator from the State Revenue site. This will calculate the amount of the stamp duty that will be payable on the purchase price.

A company name is registered via ASIC.

This can be done via your accountant, or there are companies that can also arrange this quickly and easily for a set fee. See under Resources on ABB site.

Generally, your accountant will handle this for you. If it is going to be a company as Trustee for a Trust, then the company and trust must go on the contract of sale to buy the business. Your accountant should provide and confirm the exact wording at time of contract.

Registering Your Company Name

A company name is registered via ASIC (Australian Securities & Investments Commission).

An ABN (Australian Business Number) is not required on a contract of sale; however, if a company is buying a business, the ACN (Australia Company Number) will be required if the ABN is not yet available.

Tax Implications

There are various tax advantages which your accountant needs to explain, depending on the type of entity that you choose to buy a business under.

It is advisable to make sure that you get it correct from the start. It can be a very time-consuming and costly process to try and change three months or three years later.

Some people prefer to commence as a sole trader and look into changing to a company at a later date, particularly if the business is a small or trade business.

On occasion, a buyer may consider buying the company of the seller who owns the business, instead of the business. This may be done if there is a real need or reason to the advantage of the buyer, i.e. the company owns a license that is difficult to obtain or time-consuming to obtain.

Remember — when a buyer purchases a company, they are also buying the history of that company. A buyer purchasing the shares in a company needs to be very careful that they are legally exempt from responsibilities, liabilities, and debts both historically or currently of the company relating to both past directors and the Company entity. This is the main reason 99% of small to medium business sales are business only purchases, not Company share transfers.

By : Angela Williams

Are you buying a business in Perth? Do you have a Perth business for sale? For more information on how you can get the best results, contact Angela at Advance Business Brokers today.

Perth is Buzzing!

Perth, the sunny and beautiful capital city of Western Australia is commonly known as one of Australia’s greatest innovators of science and technology, largely thanks to Western Australia’s booming mining and energy production. Perth is bustling with entrepreneurs and innovation, both SME and large enterprises.

Perth can truly be defined as a global city, largely due to its proximity to Asia, making it a bustling hub of agriculture, tourism and hospitality, food and education. With a population of over 2.1 million (2020), if you are currently looking to buy a business in Perth, there are countless opportunities available to you.

What Types of Businesses for Sale are Popular in Perth?

Perth, being a capital city, has a large array of businesses available for sale. As always cafes, restaurants and bars are extremely popular, as are tourism-style businesses, building and construction and manufacturing businesses. Childcare is flourishing due to a large amount of the workforce being involved in FIFO/mining. Western Australia is well known for its mining industry, so Perth is also a good choice for those looking for civil construction businesses as well.

So You’ve Made the Decision to Buy a Business in Perth?

At the moment, the City of Perth is offering millions of dollars in initiatives for businesses looking to innovate their practices. For example, the Local Activation Grant offers businesses up to $15,000 in support for events and businesses that participate in local events that activate the community in activity. This is a great chance to market your business and engage with the local community!
When buying any business it is strongly recommended that you conduct your due diligence. Ensure you have evaluated any risks, as well as any opportunities to further extend and expand the business. You will want to assess the financials, including operational costs and assets.
Advance Business Brokers can assist with many of these enquiries and provide links to professionals in all areas of buying a business.

Buying a Business as an Investment

Buying an existing business offers a number of advantages from an operational standpoint.  You receive established infrastructure, staff, proven marketing and sales strategies, and an ongoing cash flow. But is the prospect still an attractive one when you consider your purchase as an investment?

Is buying a business a sound investment?

The soundness of your investment depends on which business you buy, for how much and how effectively you conduct your due diligence. 

It may also sound like a given, but ensuring your expertise and experience align with your purchase can be the difference between seeing a healthy ROI, and watching your investment spiral down the drain. 

Purchasing a business that’s already done the hard work to get off the ground brings with it less risk. You’ve got a concept that’s proven to be successful and you’ve safely passed the initial one year window where 20 percent of new businesses fall over. 

But the hard work isn’t over. Some businesses may require a hefty injection of capital to upgrade machinery, bolster their working capital cycle, systems or software. Others may need a structural rejig that can take months to successfully execute. 

The advantages of buying an existing business

Purchasing a competitor’s business is a highly effective way to increase your market share. You don’t need me to point out the benefits this presents, from the increased customer base, trained staff to the increase in value proposition. You’re simultaneously knocking out the competition while acquiring an established pool of customers. From there you can foster the growth of these existing connections, rather than attempting to establish new ones. 

Similarly, you can buy a business that offers a complimentary service or product to the business you already own. For instance, let’s say you own a mortgage brokerage. A strategic business acquisition may be the purchase of a Property Buyers Agency. The alignment of both businesses would allow you to deliver a holistic service offering to property purchasing. 

Easier to secure finance

Lenders look more favourably on the purchase of an established business over funding a new one to get off the ground. It makes sense from the banks perspective – there’s a proven track record of revenue and execution, minimising the risk of the unknown. As a buyer, this can go a long way to helping you secure finance to make your purchase. 

There can be many advantages in buying an existing business rather than the time and considerable outlaw involved in starting from scratch.

Above are only a couple of the main advantages.

Are you buying a business in Perth? Do you have a Perth business for sale? For more information on how you can get the best results, contact Angela at Advance Business Brokers today.