A Buyer's Guide And FAQ

Shopping & Buying A Business



By Josh Foo,
Founder

UPDATED:  September 08, 2019



Business owners are generally reluctant to provide sensitive information until they have met with the buyer.  When you are interested in a business, here are the steps to follow:

1.  Once you have the address of the business via email, the first step is to visit the business anonymously to satisfy for yourself that the location is acceptable and the business appeals to you visually.  Where a visit is not possible (e.g. a secured industrial factory), you may research the location on
Googlemaps.com.au

2.  On your visit, DO NOT speak to staff or the business owner regarding the sale. (See FAQ 6)

3.  Thereafter, the next step would be to meet with the owner or to organise a merged-call between the broker and the parties.  (See FAQ 9).  For the meeting or merged-call, please email or SMS me the SBX Business Reference Code, your preferred day and time.  Then complete the buyers profile form at  www.nswbusinessbrokers.com/buyer-profile.html

4.  When you speak with the owner, you can ask questions and directly request for documents and information for your own due diligence. (See FAQ 4, 6, 7, 10 & 11)

If you don't wish to meet or speak with the owner, you can email me your questions.   I will forward to the owner but this may take some time.   

5.  If you don't like the businesses seen so far, then you may continue your search at:
www.SBX.com.au  |  Featured Businesses

6. If you are ready to make an offer, please see FAQ 13 to 18.  The offer should be made through me, NOT directly to the vendor.  Thereafter, I will assist with the negotiation.

7. If your questions are not answered on this FAQ page, then please email me at Josh.Foo@SBX.com.au  or SMS the mobile number (in your email).  Please include the SBX Business Code Number in all communication.

The above guide should allow an organised, smooth and stress-free interaction for both buyers and sellers.  



A.  SHOPPING FOR A BUSINESS


1. Do I need to return the Disclosure Statement via the link on the introduction email?
2. Can I request financials, lease contract, BAS, staff roster, employee details, sales report and any other documents on the business once I have returned the Disclosure Statement?

3. Where can I find businesses listed for sale?
4. Can you identify the business if I give you the business name or street name?
5. I am also registered with another SBX Broker regarding another business that I am interested in. Am I allowed to work with you?


B.  MEETING THE SELLER


6. I intend to visit and see the business. Can I approach the staff and owner at the business regarding the sale of business?
7. I have visited the business, and I would like to meet the Owner or have a Conference Call tomorrow? Is this possible?

8. Can the Vendor refuse to meet?
9. What information would I need to provide before you can organise a meeting or a 3-way conference call with the Vendor?
10. Will the business broker attend the Buyer-Vendor meetings?

11. What happens if I failed to show up to a meeting with a Vendor, aka ‘stood up’ the Vendor?
12. What type of buyers are most Vendors looking for?


C.  OFFER & ACCEPTANCE


13. I would like to make an offer to the Vendor. What are the next steps?
14. My offer just got accepted. How do I pay the deposit?
15. Why is there a minimum deposit?
16. Is the Deposit refundable, and how is the refund made?
17. I have paid the Deposit. Can other Buyers still make an offer to the Vendor?
18. I need to appoint a solicitor. Can any solicitor do the job?

D.  COMMUNICATION & INFORMATIONAL


19. How can I contact my business broker, Josh?
20. Where can I download Wechat? And why use WeChat?

21. How do I find out more about my SBX Broker, Josh Foo?
22. How much does Josh know about the businesses for sale on SBX.com.au?
23. Can I get consulting advice on buying a business?
24. Can Josh offer pro-active & enhanced search for an exclusive group of serious buyers?



A.  SHOPPING FOR A BUSINESS



(1)    
 Do I need to return the Non-Disclosure Statement (NDS) via the link on the introduction email?
--- " Yes. I cannot help or provide any information if you have not completed and returned the Non-Disclosure Statement (NDS) via the link on the introduction email from our agency.  If you have completed one in the last 12 months, you do not need to do it again. 

Once the NDS has been returned properly to our agency complete with your full name, address and other required information , I will email you the business address and profile overview in 24-48 hours.  You must not distribute these confidential details to other third parties that have not returned the Non-Disclosure Statement. "

(2)     Can I request financials, lease contract, BAS, staff roster, employee details, sales report and/or any other documents on the business once I have returned the Non-Disclosure Statement?
--- SBX will give you the documents that the Vendor (owner of the business) has supplied to us.   However, most Vendors will not freely distribute confidential information, not at least until they have met or spoken with you via a Conference Call and reassured of genuine interest.  You should be prepared to meet the Owner if you are serious.  See also FAQ 9 and this article: 
How To Ask For Financials And Other Documents When You Buy A Business

(3)     Where can I find businesses listed for sale?
--- " SBX's customer-relationship software may email you periodically with potential businesses.  However, I’d suggest you visit 
www.SBX.com.au for yourself and explore the thousands of businesses for sale, using the search functions on the website.  Also you may wish to see my SBX Featured Businesses.  See also FAQ Q2 & 19. "

(4)     Can you identify the business if I give you the business name or street name?
--- " SBX has thousands of businesses online.  I may not be able to identify the business without the SBX business code.  The SBX business code is always displayed with the business name and typically contains alphabets and numbers – eg FQ1004J / SM1413 / S1009S "

(5)       I am also registered with another SBX Broker.  Am I allowed to work with you?
--- Yes, absolutely.  Business brokers at SBX do not ‘own’ any buyers.  Buyers are free to work with more than one broker at our agency.  However, please co-operate and communicate responsibly with your brokers and do not use more than one broker at the same time for the same business.  



Buyers Guide - Meeting The Business Owner

B.  MEETING THE SELLER



(6)     
I intend to visit and see the business.  Can I approach the staff and owner at the business regarding the sale of their business? 
--- 
No. This is strictly PROHIBITED.  The business address is provided to you on the agreement that you must not approach staff, customers and/or owner of the business to discuss the sale.   You may visit the site anonymously as a customer/guest.  However, please be discreet and don't act suspiciously (e.g. sitting at the doorway of a cafe for 10 hours in glaring view of all employees etc)  I will organise a meeting with the business owner if you are interested to proceed further.   

For businesses where a site visit is not possible, such as industrial sites, government buildings or large businesses with tight security, you may first locate the business on GoogleMaps and then contact your broker for a meeting with the owner.  

(7)     I have visited the business, and I would like to meet the Owner or have a Conference Call tomorrow?  Is this possible?
--- " Please allow at least 3 WORKING DAYS to organise a meeting or Conference Call with the Vendor (business owner).  I am unable to organise on short notice. "

(8)     Can the Vendor refuse to meet or respond further?
Regrettably yes.  Vendors (business owners) typically are very busy business people with their own routines, motivations and nuances.  Vendors may not meet you if they believe that you are unsuitable as a buyer. 

(9)       What information would I need to provide before you can organise a meeting or a 3-way conference call with the Vendor?
--- "  Before I can organise a meeting or conference call with the Vendor, please complete the 
Buyer's Profile Questionnaire

Also, the Vendor is likely to want to know:

a)       Buyer Experience In The Industry:  Franchisors and landlords may (or may not) require the purchaser to have some related business experience before they will agree to the sale.  

b)       Buyer's Method of Financing The Purchase:  Some businesses may show a low or nil profit in their tax reporting.  It may be difficult to secure a bank loan for these types of businesses.  Your method of financing the purchase will help to ascertain your suitability on your preferred businesses.

c)       Buyer's Ownership of Real Estate:  Many landlords require tenants to have property real estate ownership before they will approve the lease.  

d)       Residency Status:  Most franchisees and landlords prefer Australian citizens or permanent residents for reason of long term commitment.  

The information you provide on the questionnaire will create trust with Vendor to proceed further as well as to match you with the most suitable business.  This will save time and frustration for all parties.  "

(10)  Will the business broker attend the first Buyer-Vendor meeting?
--- " Typically I will attend the second or subsequent meetings to facilitate the sale process when there are genuine interest to move forward.   I may not attend the first exploratory meeting to allow privacy for both parties to conduct an open and honest discussion without undue pressure or influence.  Buyers also usually want to meet with the Vendor quickly especially in the early stages.  To organise a meeting subject to the availability of 3 parties (Buyer, Vendor & Broker) will mean unnecessary delays.  A 3-way Conference Call may be more suitable if you wish for the broker's mediation. "

(11)  What happens if I failed to show up to a meeting with a Vendor, aka ‘stood up’ on the Vendor? 
--- The goodwill between the Vendor and the broker may be damaged because of the Buyer's no-show.   The Buyer may be unable to secure future meetings with Vendors, and/or to procure the Broker’s assistance thereafter.

(12)   What type of buyers are most Vendors looking for?
--- "  Typically (but not always), a Vendor prefers:

(a)     A Buyer With Experience In The Same Type Of Business:  This is because the landlord may not approve the lease to an inexperienced Buyer.  The landlord has the ‘veto’ on any business sale.
(b)     A Buyer With Finance Ready:  A Buyer needs to prove that he/she is financially ready to buy the business (i.e. Cash in Bank, or Loan Approval).  I’d highly suggest that you get your finance or loan ready BEFORE looking for a business to buy.  
(c)     A Buyer With Real Estate Asset:   Landlords typically prefer a Buyer with real estate properties because presumably the Buyer can draw-down on excess equity if the business requires additional capital or money to pay the rent.   Real Estate is seen as a much more stable type of asset than cash or shares.

However, there are no hard and fast rules.  Every business is different and I will advise you on the business that you are interested in.  "



Buyers Guide - Offer & Acceptance

C.  OFFER & ACCEPTANCE



(13)     I would like to make an offer to the Vendor.  What are the next steps?
--- "  To make an offer, I will email you a Memorandum of Intent.  You will be required to complete and sign the Memorandum of Intent.  The Memorandum of Intent will state your offer and some basic understanding.  Thereafter I will present the document to the Vendor.   "

 (14)     My offer just got accepted.   How do I pay the deposit?
--- Congrats.  If your offer has been accepted, you'd need to provide a 10% deposit of the agreed price OR a minimum of $20,000, whichever is the higher.  Please transfer your deposit to the SBX Trust Account, where SBX will keep the deposit secure for the duration of the sale.  The deposit will be reflected on the Sales Contract and you will only need to pay the agreed price less the deposit.

 (15)     Why is there a minimum deposit? 
--- The deposit is a reflection of the Buyer’s financial capability and commitment.  In our experience, when a Buyer is unable to furnish the minimum deposit, the probability of a successful sale drops dramatically.  We require the minimum deposit to avoid frustration and time wasted for all parties.   

 (16)     Is the Deposit refundable, and how is the refund made?
--- The deposit is 100% refundable until the Sales Contract is signed.  You may request for the refund of the deposit at any time before the Sales Contract is signed and exchanged.  Once signed, the deposit is only refundable in accordance to the conditions on the Sales Contract, subject to satisfactory verification by all the solicitors concerned.  

If your deposit is refundable, SBX will post you a cheque within two (2) weeks from date of request.   SBX does not use funds transfer, merchant facilities, PayPal, BPay or other forms of payment methods except for Cheque.

 (17)     I have paid the Deposit.  Can other Buyers still make an offer to the Vendor? 
--- "  The short answer is yes.  Once the deposit is paid, SBX will request the Vendor refrains from taking offers from other Buyers.   However, this is entirely at the discretion of the Vendor.  I’d suggest that you sign (and exchange) the Sale Contract ASAP to ensure that no other Buyers can disrupt the sale process.  "

 (18)     I need to appoint a solicitor.  Would you know of any solicitor that can do the job?
--- A bad solicitor may be the reason why a sale is frustrated, delayed or even terminated, causing much angst to both Vendors and Buyers.   Yes, Josh can connect you with a solicitor that has a proven competency if you asks.




D.  COMMUNICATION & INFORMATIONAL



(19)
    How can I contact my business broker, Josh?
--- " If your questions are not answered on this FAQ page, then please ask me on: 
  E-mail:  Josh.Foo@SBX.com.au  or send me an SMS me (phone number is in your email).  Please include the SBX Business Code in all communication.  Also see FAQ 4 and 22. "

 (20)     Where can I download Wechat? And why use WeChat?  
---  WeChat is the world's most connected messenger and social media app with more than 1 billion users.  To download Wechat, visit www.wechat.com/en/    Then add user ID: nswbbr

(21)     How do I find out more about SBX Broker, Josh Foo?
--- Please click here.

(22)     How much does Josh know about the businesses for sale on SBX.com.au?
---
" If you see a business with reference code that starts with 'FQ', for example 'FQ1026', then this is my own listing and I can share insights with you over the phone.

If the business reference code starts with a different prefix (e.g. W, SF, F, FX, GN, SM etc ), then the business is listed by another broker and I won't have more info than the ad.  Please email me your questions first and I will follow up for you.   See also FAQ 2 and 9.  "

(23)     Can I get advice and strategy session on buying a business?
---  Yes, Josh provides one-on-one strategy session to buyers.  Fees apply.  To inquire further, contact Josh.    (
Note:  The buyer is still ultimately responsible for the purchase)   See FAQ 19 & 20.  

(24)     Can Josh offer enhanced search services for serious buyers?
---   Yes, Josh helps a small circle of serious & ready buyers with enhanced search (limited to 20 members).  To apply to join this group, please email Josh:

a.  Your resume, or a history of your skills/background/experience
b.  Evidence of real estate ownership (e.g. bank mortgage statements, council rates etc)
c.  Evidence of funds available for purchase (e.g. bank statements, term deposits statements, mortgage redraw facilities etc)

Thereafter, Josh will contact you to discuss your requirements.  There is no fee for this service but eligibility criteria applies. 





Josh Foo contributed to this article


› Buyers' FAQ