• Buying a Business

    Want to own your own business?

    Helping to connect buyers with their ideal business since 1996, the LINK business experience has been created to cater to the needs of everyone who wishes to own their own business. Whether this is your first business and you are looking to get your foot in the door, or you are a seasoned business veteran looking to grow – LINK strives to make buying a business safe and stress free.

    Buying a business through a LINK broker is completely free – all fees are paid by the seller.

  • Frequently Asked

    How are businesses valued?

    Most of the businesses for sale with us are valued on the following;

    • The amount of money they earn.
    • The desirability of the industry.
    • The associated risk factor.

    Higher prices will be paid for businesses in more desirable industries that are operating in a market perceived as low risk. These types of businesses are in strong demand. Therefore the value of the business will be greater than for one in a less sought after industry and perceived to have a higher risk factor attached to it, despite the fact that both businesses may make the same amount of money.

     

    Most small owner-operated businesses are valued according to the cash surplus available to the owner. Depending on the industry this will vary. The amount will depend on factors such as the industry, location and length of time in business.

    Larger businesses are valued on either a return on investment (ROI) or a price to earnings ratio (PE). Once again this will vary depending on the industry and the amount of net profit generated by the business.

     

    When you have your first meeting with one of our business brokers they will give you an overview of values of businesses within the industry sectors of interest to yo

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    How do I know what I have been told by the business is true?

    When you initially look at a business certain information will be supplied. However in some cases the owner of the business will be reluctant to reveal too much about the business until an offer is made. Many aspects in the operation of a business are commercially sensitive and confidential, thus a business owner would not be wise to disclose all until a prospective purchaser has indicated a serious intention to purchase by making a conditional offer.

     

    A conditional offer is normally subject to the purchaser performing due diligence, a process whereby you as the purchaser requests, for scrutiny, specific information on the operation of the business. The owner will supply this information under due diligence. The buyer must maintain the strictest of confidentiality through this process and must not disclose any information to other parties with the exception of any professional advisors they are using in the process.

     

    The due diligence process is for the benefit of the purchaser, giving you time to complete the verification process. If satisfied with the end result the agreement proceeds and you become the proud owner of your new business. If however you are not satisfied with the results of the due diligence, then the owner is advised accordingly and the agreement comes to an end. The deposit money held in trust is refunded in full.

    How much money do I need?

    Before you begin looking to buy a business the first step is to work out what money you have available. There is no point in looking at businesses for sale that are beyond what you can afford. Calculate how much cash you have available and what other assets such as property you could borrow against.

     

    When dealing with a business broker tell them how much you have to invest, then they will direct you to suitable businesses within your price range. The business broker will also know which businesses for sale are more suitable to finance, or if the current owner is prepared to finance some of the purchase price. If the broker knows what funds you have available, this will help them to help you.

     

    With some types of business it can be difficult to borrow money using just the business as security, due to the difficulty a bank may have in securing its loan. i.e. a retail stores asset is the stock which it is constantly selling off. Therefore the bank would not have any actual security. If you have a house or investment property you may be able to use this as security for a mortgage to buy the business, thereby requiring very little actual cash.