Published on 15/11/2018 by Anybusiness.Com.Au

​When Is The Best Time To Buy A Business?

They say patience is a virtue, and there are few scenarios where this statement is truer than when purchasing a business. Buying the right business at the wrong time can just as quickly lead to financial strain as choosing the wrong business at the wrong time, so knowing when to move and when to bide your time is crucial.

But how to know when the time is right? While there's no cheat-sheet we can give you, the team of specialists at Any Business have facilitated enough transactions that we know what to look for in a company. If you're in the market for a business, you'd be wise to consider the following when conducting your search.

When you can recoup your costs

There are always going to be hidden acquisition costs attached to buying a business beyond the headline price. Whether its replacing staff who leave at the same time as the handover, replacing or repairing equipment that was neglected by the previous owner or reacquiring customers who left as management changed, the initial period after a purchase is usually irregular and expensive.

As such, many buyers time their purchases to conclude ahead of periods of peak demand. For many businesses, this means concluding the sale in spring ahead of the Christmas period. Going through a strenuous transition without the promise of quick return can also be demoralising to staff and creditors, so ensure that you're aware of the peaks and troughs of your industry before concluding the sale.

When they have something you can't (otherwise) buy

If your market share has ceased to increase and you're running out of ideas, a radial solution to the problem could simply be to buy out the competition. This is not a solution for every company in every industry in every circumstance, but where battle lines have hardened and neither you nor your chief competitors are making any gains, being able to make a deal and effectively buy their market share is something to consider. Consolidation allows you to access an economy of scale, so buying an equal-sized business often doesn't mean having to double your overheads.

When you can dictate the terms of the sale

There's a needle to thread when buying a business – there needs to be sufficient demand for the current owner to consider selling, but not so much you have to contend with other buyers. After all, what you find attractive in a business is likely going to interest other potential buyers, so being able to quickly identify and act upon opportunities before the competition becomes fierce is key to your success. Avoiding a bidding war helps you conclude sales faster while also preserving more of your capital for improvements and upgrades after you've taken possession. If you see an opportunity that's too good to pass up, consider additional financing – it could end up saving you money in the long-term.

Wondering when you should snap up your next business? The experts at Any Business can help you make the smarter choice. Contact us today to learn how we can support you throughout the process.

Anybusiness.com.au

Mary is the founder of AnyBusiness.com.au. She has a degree in Business from Monash University and been helping showcase businesses for sale for over 10 years. In the course of running her own business and working daily with business owners and brokers she has developed a keen sense of the Australian market for businesses for sale and shares her knowledge on this blog and others such as female.com.au

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