skip to main content
  • Business Intelligence
  • Growth
  • Customers
  • Productivity
  • Business IQ
  • Trends
  • Success Stories
  • Tech
  • Awards
  • Business Tools
  • Subscribe
  • Tech Enquiry
  • Sylvia Pennington
    Business Journalist

    Sylvia Pennington writes regularly on business and technology for the Sydney Morning Herald and The Age

    Sylvia Pennington
    Business Journalist

    Sylvia Pennington writes regularly on business and technology for the Sydney Morning Herald and The Age

    Keen to become your own boss and considering buying a small business rather than starting your own? We look at the top things to keep an eye out for.

    Planning on joining the two million Aussies who run their own small businesses? Starting from scratch can be a daunting proposition and taking over an established operation can be an attractive proposition.

    As a start, the chances are that it will be easier to secure finance on a well-run operation with a solid client base, rather than a new idea and a business plan.

    You also may inherit experienced employees who are willing to stay on and a reliable income from the get-go, rather than the hard work and finger crossing that can be part and parcel of getting a brand new venture off the ground.

    Though it’s important to realise not every business that comes on the market is a gold mine set to yield a rich dividend for the next proprietor who happens along. Pulling them back to profitability may require a significant investment in time and money.

    Do they represent a low priced opportunity for turnaround triumph or a truckload of trouble for a new owner? It’s your call.

    Empty coat hangers line a rack

    Do your homework

    Before signing papers, experts recommend you do plenty of homework. Seeking advice from professionals should mean less chance you’ll pay over the odds or overlook red flags when sizing up a potential purchase.

    Principal of The Franchise & Business Lawyers, Elizabeth Gore-Jones, has seen scores of small businesses change hands and says there are pitfalls aplenty for unwary buyers.

    Elizabeth’s top 5 traps for first time buyers

    1. The lease. If you’re taking over an existing lease you’ll be bound by its terms. It’s vital you ascertain what these are and whether there’s an option to renew. This will avoid learning your new business only has two years left to run resulting in being without premises, or facing an extensive relocation bill
    2. The financials. It’s a business, not a charity – so you need to be satisfied the figures aren’t rubbery. Any contract should be subject to due diligence enquiries and a review by your accountant
    3. Background checks. Who owns the business and are the assets theirs to sell? Don’t take their word for it – have your solicitor run a bankruptcy check on the owner, a company check on the business and a Personal Property Securities Register check to ensure assets are unencumbered
    4. Franchised businesses. Contemplating a franchised business? You’ll be entering a long-term relationship with a third party – the franchisor – so it’s sensible to get a sense of whether it’ll work for you before signing on. Spend time with them and speak to other franchisees about what life’s like inside the tent
    5. Conditional upon finance. Unless you’re a cash buyer, it’ll be you and the bank taking the plunge together. Don’t assume ‘she’ll be right’. She won’t if the money doesn’t come through, so make any contract conditional upon finance approval
    Learn how to keep up with the pace of change

    Telstra’s Business Intelligence series can help transform your business.

    Find out moreLearn how to keep up with the pace of change

    Tech
    Tech
    Tips from former con-artist Frank Abagnale on how to fix your cyber security

    It’s a question that plagues the technological age: how can small businesses protect themselves from internet fraud? Former conman turned cyber expert Frank Abagnale reveals ho...

    Customer Experience
    Customer Experience
    Digital tools that will help you create loyal customers

    Creating loyal customers is essential to the success of any business. Digital tools can improve the way customers experience your brand - whether it’s helping you interact with...

    Tech
    Tech
    BYOD security in the age of remote work

    The rise of remote working has thrown a spotlight on bring your own device (BYOD) security issues and challenges. BYOD is more popular now than ever – but with more devices in...

    Business IQ
    Business IQ
    The year ahead: 5 key opportunities for small businesses

    In the second article from Telstra’s partnership series with Small Business Australia, Executive Director Bill Lang shares his take on the key opportunities for small businesse...