How to use the Business Transfer Checklist [Free template]

Posted by James Price | JPAbusiness on 02-Jan-2022 13:37:44

There are many important issues a vendor needs to deal with in the transfer process leading up to a business sale settlement.

The last thing anyone wants is a handover whereby business performance is negatively impacted by transfer issues not planned out ahead of time and dealt with appropriately. These issues may include:

  • staff entitlements and employment contracts
  • managing key customer and supplier relationships and communication
  • transfer of registrations and insurances on P&E
  • work in progress
  • final stocktake
  • premises lease transfer.
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Topics: Buying a business, Selling your business, Business transfer, Checklist, selling a business, business buying, Business selling

How to make sure you pay a fair price when buying a business

Posted by James Price | JPAbusiness on 20-Oct-2021 02:00:00

In our experience, the risks associated with business purchases fall into three categories:

  1. People
  2. Customers, suppliers and market dynamics
  3. The value exchange.

In this blog we’re focusing on the third risk category, the value exchange, and how you can manage that risk.

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Topics: Business Value, Buying a business, Business maintainable earnings, risk management

Find the right business for you with the Business Buyer's Checklist

Posted by James Price | JPAbusiness on 29-Sep-2021 02:00:00

Buying a business is not an investment decision to be rushed into or made lightly.

For those of you considering buying a business, we have created the Business Buyer's Checklist.

The checklist contains 14 questions designed to:

  • ensure you have a clear purchase objective 
  • work out whether identified business opportunities are a good match for your skills and interests
  • prompt you to take necessary steps regarding market appraisal, due diligence and financing.
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Topics: Buying a business, Template, Checklist, business buying

How to achieve a successful business sale or purchase

Posted by James Price | JPAbusiness on 01-Sep-2021 02:00:00

Based on our years of business transaction experience – and successfully making a match between many buyers and sellers – answering ‘yes’ to the following questions is critical to setting you up for a successful business transaction:

        1. Price – Is the price market-related and does it reflect the value a willing buyer, under the circumstances of the sale transaction, will perceive as fair?

        2. Facts – Are the facts on the business or opportunity clear, unambiguous and relevant to the risks, issues and opportunities the risk-taking party will likely perceive in making the purchase? Have these facts been collated and presented in a professional Information Memorandum/Business Profile?

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Topics: Buying a business, Business transfer, selling a business, transaction advice, selling my business, business sale advice

A guide to conducting legal due diligence when buying a business

Posted by James Price | JPAbusiness on 18-Aug-2021 02:00:00

In this blog we’re sharing information and case studies first presented by Watson Mangioni lawyers David McGuiness and Fleur Gibson in our eBook, How to conduct due diligence when buying a business.

Please keep in mind the material in this blog is not advice and should be regarded as a general guide only.

What is the purpose of legal due diligence?

Comments by David McGuiness and Fleur Gibson
Watson Mangioni Lawyers Pty Ltd

The purpose of legal due diligence is to enable an intending purchaser to assess the legal risks associated with either a business or a company, in order to make an informed decision as to whether they will proceed with the transaction and, if so, on what terms.

Where issues are thrown up during legal due diligence and the buyer still wishes to go ahead, they may renegotiate the purchase price they’ve initially offered and also request additional warranties from the vendor.

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Topics: Buying a business, Legal, Due diligence, Checklist, business buying, due diligence checklist, legal due diligence

How to avoid losing customers when buying a business

Posted by James Price | JPAbusiness on 14-Jul-2021 02:00:00

There are a number of risks when buying a business and one of them relates to key customers taking flight in the early stage of the transfer.

In doing your due diligence it’s wise to look at customer concentration risk. Where you have a significant concentration of one or two customers, in particular, you should try and protect against that risk.

Here’s an example of how purchasers can use a ‘hard’ provision to protect against this risk in the final contract:

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Topics: Customers and Clients, Buying a business, Customers, selling a business, risk management, business sale

Do I have to pay GST when buying or selling a business?

Posted by James Price | JPAbusiness on 16-Jun-2021 02:00:00

When working with clients who are either buying or selling businesses, we’re often asked: ‘Will I have to pay GST?’

The short answer, according to the Australian Tax Office (ATO), is:

No GST is payable on the sale of a going concern if certain conditions are met. (A ‘going concern’ is a business that is operating and making a profit.) However, as the seller, you may be able to claim input tax credits for GST you paid on expenses relating to the sale.

Of course, it’s never as simple as one paragraph when it comes to tax, so we’ve asked our business analyst Shirley Jin, who is also a CPA, to clarify those ‘certain conditions’ mentioned, and when you can and can’t claim input tax credits for GST paid on sale expenses.

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Topics: Buying a business, selling a business, taxation, GST, tax advice, goods and services tax

Should I buy a business to get myself a job?

Posted by James Price | JPAbusiness on 09-Jun-2021 02:00:00

The short answer to this question is yes... and no.

Buying a business that provides you with a good job is definitely a worthwhile strategy, as long as it doesn’t just provide you with a job.

If you own a business, what are the main risks you will be taking?

  • Operational risk – As a business owner you count on your systems and processes to work in a predictable manner and accept the risk of those systems and processes failing. For example, your safety system could fail and cause injury to an employee, or your manufacturing system could break down, causing you to default on a major customer contract.
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Topics: Buying a business, business ownership, running a business, redundancy, buy a business, owning a business

How to ensure you get good advice when buying a business [case study]

Posted by James Price | JPAbusiness on 19-May-2021 02:00:00

A few years ago we worked on a business sale transaction in which one side had far less robust advice than the other – you can guess which side was which!

Our client – the vendor – was selling a reasonably large, engineering-style business.

The purchaser – while a successful business operator – was not experienced at acquiring businesses and did not appear to have thought deeply about the sort of expertise they would need to advise and guide them.

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Topics: Buying a business, Case study, business broker, risk management, client case studies, business transaction advice

What is 'strategic' value when buying or selling a business?

Posted by James Price | JPAbusiness on 12-May-2021 02:00:00

Strategic value is the value a purchaser is willing to pay for a business, over and above what an impartial business valuer might determine is ‘fair market value’.

As we have discussed in our eBooks, one common method of determining a business’ fair market value is to use a multiple of earnings.

Multiple of Earnings is the term for how many years or months a purchaser is prepared to wait before they recoup the value they paid the outgoing business owner, based on an assessment of business maintainable earnings (or sustainable earnings).

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Topics: Business Value, Buying a business, Selling your business, Template, strategic value, Checklist, business value drivers

 
Disclaimer: The information contained in this blog is general in nature and should not be taken as personal, professional advice. Readers should make their own inquiries and obtain independent, professional advice before making any decisions, taking any action or relying on any information in this blog. 
 
 

 

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