Buying a Business

Due Diligence When Buying a Business

Many of us have a dream to run our own business. You get a lot more flexibility than standard employment, and you get to run the show how you want it to be run. But when starting a business from scratch, the excitement can be tarnished by the stress, workload and uncertainty of building from the ground up. For this reason, buying an existing business is often a smart decision – both personally and professionally.

But how can you judge a good business on the surface? How do you know it’s truly worth the asking price?

Before buying a business, seek our professional advice

Facing these questions is a difficult task, even as an experienced entrepreneur or investor. At PJT, our business consultants have years of experience in all facets of business purchases and due diligence. Depending on the value and complexity of the business you're looking to purchase - there are some options available to you in the type of Due Diligence you need.  As a minimum, we recommend at least 3 years of financials be reviewed.  This can often be a good first step - if the financials don't stack up you haven't spent time and money on further investigation.  If the figures look good, then a full Due Diligence would be advised, particularly for  larger investment.  This takes a comprehensive approach to ensure you know exactly what you're getting and whether there's scope to grow.  A full Due Diligence is based on a variety of factors, including:

  • Competitive landscape
  • Location
  • Products and services
  • Delivery to market
  • Prices and market demand
  • Brand value, market dominance and reputation analysis
  • Market Opportunities
  • Organisational Structure
  • Staffing
  • Documented Systems and Processes
  • Buildings and Assets included in the sale
  • Full financial analysis of a minimum of 3 years’ trade to determine the worth of the business

For Australian businesses in all industries and locations

The first thing we suggest to anyone who is potentially interested in purchasing a business is to set a budget for due diligence. Due diligence is a crucial step in the process and can never be taken for granted: by budgeting for it, you ensure you aren’t confronted with any nasty surprises along the way or end up spending over your budget.

By having an independent organisation evaluate any potential business, you could save hundreds of thousands of dollars by avoiding a business which does not meet your needs, or confirm the value of a potential business and negotiate a better purchase price based on facts. We can even provide you with a full valuation of your current business if any refinancing or restructuring occurs, or if you plan on selling.

Give yourself financial security and full peace of mind

No matter the industry or location, PJT can assist you with a simple check of the financials, or a full investigative Due Diligence before you sign any purchase contract. We are on hand to assist you with due diligence and ensure any decision you make is supported by the facts.

Speak to PJT today about your potential business purchase, and we will guide you on next steps in evaluating the worth of this business, or work through our industry brokers to secure a business which meets your needs now and into the future.

Give us a call on (07) 5413 9300 or book a consultation online and discover what you can achieve with due diligence and PJT’s accountants and advisors by your side.

buying-a-business

BOOK A CONSULTATION
Subscribe to Our Newsletter
CONTACT US

What Client's Say

  • "PJT has always provided exceptional accounting service and advice relating to business operation, planning, taxation, investment and more."

    ,
  • "The principals and staff are always approachable and display a sincerity in your business and situation."

    ,
  • "PJT have made our life of running our own business much easier, knowing they are up to date with the latest in tax laws, and happy to help out with any queries we have

    ,
  • "PJT has always provided exceptional accounting service and advice relating to business operation, planning, taxation, investment and more."

    ,
  • "The principals and staff are always approachable and display a sincerity in your business and situation."

    ,
  • "PJT have made our life of running our own business much easier, knowing they are up to date with the latest in tax laws, and happy to help out with any queries we have not matter how small."

    ,

Read Related Articles

Improving Your Business Financials

The day to day operations will take most of a hotel owner or manager’s time and rightfully so. The more activity going on in the hotel, should mean an increase in the business’ bottom line. ...

Improving the Financial Facet of the Business

An emerging trend in today’s business is the opportunity to outsource – that is, transition some of the back-office operations to a third party service provider. Many business owners and managers have found it easy to do outsourcing ...

Business Financial Resolutions - How to Achieve Them

We’ve all set New Year’s Resolutions only to see another year go by and resolution not met.   That might work personally, but in business, our resolutions should be solid and must be met, especially when it comes ...

Reviewing Business and Finance Plans

With rising costs and falling revenue a common occurrence in many businesses – it may be a good time to review your business and financial plans to ensure you’re on track. Rising cost and falling revenues are sure-fire ...