The Buying Process
The steps to buying a business
What type of buyer are you?
Over the years the enormous amount of enquiries that the Aldes group have received from potential buyers can be categorized into three distinctive groups:
The InvestorThese are individuals, consortiums or companies searching to invest into a business where they are not actively involved and their main aim is a return on investment.
The EntrepreneurThese are true entrepreneurs and normally are current owners of businesses looking to either expand or diverse their operations. In most cases they also come from a family of entrepreneurs.
The "New" EntrantThese are individuals who are looking to exchange the stability of working for a fixed salary for the excitement and extra earnings of owning your own business.
Through our process of buying a business we first encourage you to identify where you fit in and then we assist you in finding the perfect business or opportunity that meets your needs.
1. Compile a business acquisition plan
As a potential buyer of a small or medium business you need to know who you are and what you are looking for. It is important that you know your strength and weaknesses and it is always advisable to keep to an industry where you have relevant experience.
Your plan will typically tell you what Type of business you require, in which Area it should be located and what the Income of the business should be. You will also have to plan Who you will use to assist you with your acquisition.
2. Select an experienced business broker
Business brokers and their operating methods are governed by the Estate Agents Act. The act requires that business brokers are registered with the EAAB and also holds a current Fidelity Fund Certificate. Business Brokers are also required by law to abide by the EAAB code of conduct in order to ensure the protection of the customer.
Apart from the above Aldes Business Brokers also work as a network of brokers servicing all their clients from a central database.
3. Sign a non-disclosure agreement
The details and information of any business for sale is always treated as highly confidential. Your professional Aldes business broker will never forward you detail on a business without you signing a non-disclosure agreement. This is done to protect the details of the business and is expected of us from the seller.
4. Set realistic expectations
It is important that you acquire knowledge of what is happening in the business market and your Aldes business broker can assist you with aligning your expectations to market realities. Aldes Business Brokers sells more businesses than any other brokerage and has a vast amount of information on what is going on in the market.
5. Start the search
Your Aldes broker will help you with this. Once he/she has a good idea of the type of business you require he will be able to present to you a list of the relevant opportunities available that meets your needs/expectations. Using our sizable database of businesses for sale and working as a network of brokers you can expect excellent service.
6. Meet with the owner
Once you've decided on a business the first thing that you should do is to visit the business and meet with the owner and get a "gut feeling" of the business. Your Aldes business broker will make such arrangements for you and will ensure that not only are you introduced professionally but that your concerns/questions will also be answered during such a meeting.
7. Negotiate the sale
Once you've decided to buy the business, Aldes will assist you to negotiate the sale so that all your concerns are met and your original acquisition plan comes to fruition. This is where the professionalism of your Aldes business broker comes to the fore in our effective communication back and forward between the parties, until such point as an agreement is reached.
8. Put an offer into writing
Your Aldes broker has vast experience in putting together and drawing up a Sales Agreement. You cannot expect any seller of a business to take you serious if you do not put an offer in writing and commit yourself with a deposit. An offer is not an offer unless it is in writing!
9. Complete due diligence
If your offer has been accepted the seller has now committed himself to also provide you with any further detail on the business that you might need to complete a due diligence. Your Aldes business broker will assist you in obtaining these documents and you will end of the process by confirming in writing that you are satisfied with the due diligence.
10. Raising finance/approval of lease agreement
If your offer is subject to you being able to raise the necessary finance ask your Aldes broker to introduce you to our extensive network of funding houses. During this process always keep the seller and your broker informed of your progress.
Aldes will also introduce you to the landlord in order to secure a new lease or a cession of the existing lease
- So important is the lease that you make it a condition of purchase that your attorney first approve the document.
- Most leases are for a three year period, with an optional further three and a rental escalation of 12 to 15% a year
11. The Take Over
Aldes will assist in arranging for a stock take (if needed) and a list of things to be done in order to accomplish a smooth take over.
It is your responsibility to arrange for payment of the purchase price a few days prior to take over into the Aldes Trust Account.
On or before take over date Aldes will make final payment to seller on your instructions.
Need more assistance?
If you need further assistance or have any queries contact our head office.