Here are some frequently asked questions by purchasers of businesses:
Who is the typical vendor of a business?
Will I able to secure finance to buy a business?
What sort of advice should I get before buying a business?
What can I expect from a Bayleys business broker?
There will be a number of reasons why a business is up for sale and there isn’t any one typical seller. However, around two thirds of the vendors that Bayleys deals with are “baby boomers” aged over 55 looking for an “exit strategy” from businesses that they will in many instances have owned for a long time. In many cases, they will have built up a very successful business and have a wealth of knowledge and important contacts within their industry. In some instances, they may be prepared to stay on and help with the transition process or continue on a consultancy basis.
As the baby boomer bulge gets bigger, they are likely to make up an even larger proportion of sellers - offering some great opportunities for buyers.
Most business acquisitions involve a degree of leveraging and banks are currently competing aggressively in the business sales market given the economy is performing well which means the business sector is generally also performing well.
However, expect financiers to want to undertake a substantial amount of their own “due diligence” both on the business you are looking to buy and on yourself. They will want details on your past business experience and what sort of assets you have should they require additional security.
Bayleys business brokers have built up strong relationships in the banking sector and can assist with introductions if required.
Obviously getting good legal and accounting/business/financial advisory advice is essential.
We would recommend you use a lawyer or firm specialising in commercial law with a well-established track record in business sales and acquisitions.
Likewise it is important to utilise an accountant/business adviser experienced in this area to assist you with your due diligence. A good financial adviser is “gold” both in guiding you through the acquisition process and then in adding value to that business once you have bought it.
Again, Bayleys can assist with introductions to advisers who we know from experience are good operators and will offer sound advice.
We are vendors’ agents which means we act, and have a fiduciary responsibility to act, on their behalf and in their best interests.
However, every successful transaction requires two parties and satisfying buyers’ requirements as far as is practicably possible is an important part of the equation. We will listen to and take on board what you are wanting to achieve in the negotiation process and relay this to the vendor.
An important part of our role as negotiators is to endeavour to get the possible result for both parties.