Published on 13/11/2019 by Any Business.Com.Au

Can I be successful without starting my own business?

When most people think of starting a business, they think of beginning from scratch, developing an idea and building the company from the ground up. But starting from scratch presents some distinct disadvantages, including the difficulty of building a customer base, marketing the new business, hiring employees and establishing cash flow from the get go without any established credibility.

If you're worried about the difficulties involved in starting a business from the ground up, you might decide that buying an existing business is a better fit for you. When you buy a business, you take over an operation that is (one would hope!) already generating cash flow and profits.

You have an established customer base and reputation as well as employees who are familiar with all aspects of the business…and you don't have to reinvent the wheel.

Of course, there's no such thing as a sure thing—and buying an existing business is no exception. If you're not careful, you could get stuck with obsolete inventory, uncooperative employees or outdated distribution methods.

If you want to be the buyer that ushers an existing business into a new era of success, consult our 6 steps to buying an existing business below.

1. Decide what you're looking for

Purchasing a business is a huge decision that will impact your life and livelihood for many years. So before you even start investigating options, start by knowing exactly what kind of business you're looking for. Here are a few factors to consider:

  • Location: Are you open to moving, or do you need something close to home? Or maybe you're looking at businesses not tied to a specific location. Either way, remember that the location of your business will affect labor costs, taxes, and other financials that can change the business's bottom line.
  • Size: Do you want to own a small family business, or a large, bustling enterprise? Buying a larger business could mean bigger profits, but will likely also involve a higher purchase price and more stress in the transition.
  • Industry: What are the areas where you already have experience? What causes are you passionate about, or what hobbies are you interested in?
  • Lifestyle: Are you interested in a job involving lots of travel? Are you open to working odd hours, or would you rather stick to a traditional nine-to-five? As the owner of a business, the buck stops with you -- so think twice before choosing the kind of hands-on business that might involve emergency phone calls at 3am.

2. Research available businesses

Once you know what you're looking for, you'll need to start researching businesses for sale. First put out some feelers close to home. Are your friends who launched a successful app ready to move on to their next project? Do you work for a small business you love whose owners may be willing to sell? Or if you're keeping it small and local, maybe the owners of your favorite local coffee shop are ready to sell out and move to Queensland?!

From there, move outward to your business contacts, and carefully take to the internet for your research.

3. Consider working with a business broker

If you've done some research on your own and haven't found the business you're looking for, consider hiring a business broker to prescreen businesses for you, help you pinpoint your areas of interest, and negotiate the terms of your eventual business purchase.

Business brokers work similarly to real estate agents in that they will typically charge you a commission so they only get paid when you buy a business.

4. Complete your due diligence

When you find a business that's a good match, a true entrepreneur will be immediately itching to dive head-first into purchasing the business and moving it forward. Before you get too excited, slow down and do your homework. A business that looks great at first glance could have serious issues hiding underneath that would make it a poor choice for sale.

Before you go any further, get your acquisitions team assembled. Especially if you're not working with a broker, you'll need an acquisitions attorney and an independent business valuations firm to help you determine the value and health of the business.

Have a business valuation performed to determine how much the business is worth, and consider how the current owner's connections and expertise may affect that value.

Have a professional accountant evaluate the business's written financials very carefully to make sure everything is on the up and up, and question anything that may be unclear. When you buy a business, you take on a tremendous amount of liability for things that may have happened before you were involved, so don't leave anything up to chance.

5. Acquire the necessary funding

While there are many benefits to purchasing an existing business, it can certainly be an expensive option. Unless you're independently wealthy or have a financial backer, you'll likely need funding to make the sale.

Once you've settled on a purchase price for the business and know how much funding you need, you have a few options for sources of financing:

  • Seller financing: This is where the seller allows you to make payments over time to purchase the business, usually for the purchase price plus interest. If your seller is open to this option, it can be the best financial choice for all involved.
  • Angel investors or venture capital: In this model, you would be partnering with someone else to purchase the business - they are the financial investor, and you are the day-to-day operator. If the business succeeds, this will cost you significantly in profits. But if it fails, you won't have to worry about paying debts on a business that isn't making money.
  • Business loan: Alternatively, you could take out a term loan to purchase the business through a traditional bank or an online alternative lender. The good news here is that lenders are often more open to loans for purchasing existing businesses with a known revenue history. Even so, your personal financials will play a big role in your ability to qualify.

6. Draft the sales agreement

You've chosen a business, negotiated the terms, and secured the funding to make a purchase. All that is left to do is draft the agreement and sign on the dotted line. Again, make sure you're working with a reputable acquisitions attorney here, and that you fully understand the written terms of the agreement before you sign.

Choosing to buy an existing business is a valuable entrepreneurial feat that will impact your life, your community and the lives of your employees for years. With the right connection and a lot of hard work on the transition, you may be the perfect person to turn a good business model into a great future for all involved.

Checkout our listings here
Ab Assets/Broker Avatar

AnyBusiness.com.au

Curtis is a leading expert in the business-for-sale industry, serving as a senior content creator at anybusiness.com.au.

With a career spanning over fifteen years, Curtis has accumulated extensive knowledge in the domain of business sales, acquisitions, and valuations. His deep understanding of market dynamics and his ability to translate complex industry jargon into accessible insights make him a trusted resource for entrepreneurs and business owners looking to buy or sell businesses.

Related articles

07/08/2025 by AnyBusiness
Running a small business in Australia is incredibly rewarding but far from easy.From juggling cash flow to dealing with rising costs and navigating red tape, many small business owners find themselves stretched thin.In fact, according to recent reports by the Australian Small Business and Family Enterprise Ombudsman (ASBFEO), economic pressures and staffing shortages remain top concerns across industries.If you're a small b...