If you’re looking to buy a business, identifying the right business to buy can be a daunting process and care must be taken to ensure that you get maximum value for money while reducing your hidden costs. That means that before you agree on a deal with a business seller, you’ll need to take into consideration all the additional expenses and hidden costs on top of the purchase price. Whether you’re a regular or a first-time business buyer, read on about possible additional expenses you may incur and don’t get caught out with any hidden costs when buying a business in Australia.
Refurbishment
If the business was not running efficiently, you may need to consider updating inventories and assets to get the business back on track and making a profit. If the business is a franchise, you may be given a list of specifications for refitting a premise before launch. It’s therefore important to ensure that you fully understand what’s required of you and how much it will cost before agreeing to buying a business.
Other associated expenses to take into account here include machine or vehicle maintenance, leasing or machinery replacement costs, and other hidden costs that are related to buying a business.
Staffing
Employing the right people to help you drive your business forward is not something you want to consider sometime down the track. You want to make sure that you’re aware of what it will take to recruit and train new staff. Even if the business will be retaining some employees from the previous owner, you may want to come in with new methods and systems – all of which will cost time and money.
Marketing
Your new business will require constant marketing from the start. You’ll therefore need to set aside upfront marketing fees as you seek to establish yourself in the market as the new owner, while also attracting new clientele.
Marketing costs may include the printing of banners and new signage, in-store branding or re-branding, and other online marketing tools.
Compliance
Compliance means that after buying a business, your business is protected from breaking the law by ensuring registrations and licenses are up to date. You’ll need to register the business name that you’ll be using to trade along with other certifications and licenses.
Depending on your industry, compliance may also include obtaining a Food Act registration, import permits and/or insurance. Ensure that you factor in all these hidden costs as you consider and final your new business purchase.
Professional services
Professionals help you to get the most of your business deals. From a sale agreement to business valuations to scouting for businesses to buy, you want to make sure that you set aside enough resources and time to be able to leverage the expertise of various professionals. Try to balance between expertise and affordability even as you look to save as much money as possible.
To learn more about potential hidden costs when buying a business, talk to a professional business broker. As a leading business brokerage firm with a transaction record spanning more than $500 million worth of deals, ABBA Group is ready to assist you in buying the right business at the right price. Email or talk to us today.
