Buying an existing business

Buying an existing business can be a quicker and easier way to step into business ownership than starting from scratch.

You’ll take on a business that may already have customers, systems and income in place.

But before you buy, it’s important to check carefully how the business operates and understand the legal, financial and practical details.

This helps you to avoid any nasty surprises.

The Australian Government provides step-by-step guidance on buying an existing business through business.gov.au.

Below we cover some of the practical considerations when buying an existing business in Tasmania.

Key considerations when buying an existing business

  1. Identifying suitable businesses 
    • Ensure the business matches your skills, experience and capacity to operate. Consider industry knowledge, staff management and operational capability.
  2. Gathering comprehensive information 
    • Beyond examining profit and loss statements and balance sheets, review customer contracts, supplier agreements, staff arrangements, licenses and legal obligations.
  3. Seeking professional assistance 
    • Engage accountants, business valuers, lawyers and other advisors as relevant to help you make informed decisions about the purchase.
  4. Understanding business valuation 
    • Learn how businesses are generally valued, including consideration of assets, liabilities, goodwill and market factors.
  5. Identifying sources of finance 
    • Explore bank loan options and private investors to secure funding for your purchase if required.
  6. Negotiating the sale 
    • Consider the sale price along with staffing matters, existing leases, debts and the transfer of assets. Effective negotiation sets a clear foundation for a smooth transition.
  7. Finalising the sale agreement 
    • Prepare and sign a formal agreement outlining terms, conditions and responsibilities for both parties.

Post-purchase steps

  • Registration and compliance
    • obtain an Australian Business Number (ABN)
    • register for GST if required
    • register a business name
    • obtain required business insurance.
  • Banking and accounts
    • open business bank accounts and other essential accounts such as utilities
    • implement proper systems for recording transactions.
  • Operational setup
    • finalise any leases or property agreements
    • plan and execute promotional activities to retain or attract customers
    • review cost and pricing strategies for goods or services.

Additional resources

For comprehensive guidance on legal, regulatory, and taxation obligations, visit the Australian Government’s business.gov.au page on buying an existing business.