Moving to a new country is a very stressful time for most of us and the older one is, the more side-effects! That and buying a business doubles the strain, so if you are in the process, or considering it, watch your health, eat wisely and take plenty of vitamins. Swim in the sea and walk on our lovely white beaches, whenever possible. Constant relaxation gives the body time to heal and you will be able to cope.
For a new migrant arriving for the first time in Australia, it is much more difficult to start a business than it is to buy an existing one with an already proven track record. Businesses making a profit under management are difficult to find but are usually well worth looking at. One can sometimes offer the best employee or manager there a small share in the business, in return for any increased output and profits.
Although Australia seems very similar to other English-speaking countries, there are mixed cultures from many countries established here, and the seemingly sunny, relaxed holiday atmosphere tends to camouflage the intense competitiveness of the business community in general here.
After practising in Perth as a business broker for a few years, assisting migrants (I was a migrant from Zimbabwe myself six years ago), I am very aware that only the hard-working, informed, alert and “hands on” business owners are making money. The rest have bought themselves a job, together with all the responsibilities and stress of running a small business.
I appraise many businesses which new owners have been running for only 6-18 months and they wish to sell. Many of these businesses that you will find advertised on the market are there because, for some reason, the profit margins are in decline, or the owners have worked themselves to a standstill to make the business work, and have ruined their health along the way.
A new migrant must be careful not to fall into the same trap!
Having seen so many of the mistakes that other people have made (and made some myself, when I arrived), here are a few tips which may help you to choose the correct business to buy:
Take your time and do not allow anyone to rush you. There is always another business out there!
If you are considering migrating to Perth, Western Australia, I suggest you contact the Small Business Development Corporation in Perth www.sbdc.com.au for free advice and even possible sponsored business migration. This organisation can supply you with most of the information and assistance you require. They will post you an information package on application.
Once you have found a business which you can afford and which you feel comfortable with, show it to their experienced staff. It is always good to let an unbiased person look at what you are doing. You may be driven by the passion or financial need to buy a business, or both, and may need some logical facts pointed out to you by an experienced person. A vendor or business broker will be driven by the desire to sell and may not have your interests at heart.
The SBDC will also be able to give you an idea of what return on investment you should look for in the industry which you have chosen to buy into. All business agents should have examples of recent sales in every industry and what the estimated return on investment is. Speaking very generally, if you buy a business in Perth, you should be able to earn your money back in two to three years.
Try to find an accountant who has bought and sold businesses himself. You usually need a very good one at this stage. Accountants can check that figures balance and do tax returns, but many of them do not have an instinct for business. It is essential that you have the right person to advise you at this stage.
It is worth spending the money on a lawyer for the agreement, when you buy a business. Again try to find one who specialises in business agreements (a divorce lawyer may not have had much practice!).
Well run, profitable businesses are not easy to find but if you search constructively and widely and put in the essential research and necessary hard work, you will be successful and end up buying a good one.
Rosalind Baker is a Business Broker in Perth. You can contact her at rozzie@space.net.au
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