Business Set Up And Purchase
Determine salary and profit
Be realistic in your expectations
Survey the market
Obtain work in that type of business
Match skills, knowledge and
List assets that you will require
Are there any businesses for sale?
Type of entity
Set up costs
Break even levels
Pay As You Go (PAYG) tax payable
Business Benchmarks Comparison
Statement of Net
Ongoing role of
Bank interested in
last 5 years
Tax returns last 5
Cash Payments Book
Cash Receipts Book Creditors’ Aged
Tax Invoice Books Analysis
Journals Creditors’ Invoices
Bank Deposit Books Stock records
Bank Statements Work in progress
Is the Vendor running a similar
Check purchases, sales and wages
Restraint of Trade
Will customers remain?
History of the business
Suppliers’ Terms of Trade
Terms of Trade with Debtors – are they enforced?
Are Tax Invoices and Statements prepared
Check plant and equipment
Is the plant owned, leased or on hire purchase?
Leased premises – get a copy of the Lease
Landlord’s approval for transfer of Lease
Check the Lease – what would your
obligations be for:
removal of equipment at the end of the Lease?
rectification of premises?
exercise of options?
repairs and maintenance?
Acquiring the building? – Check
Title Deed details
Apportionment of price
If taking over Debtors – BEWARE!
What employees are you retaining?
Holiday, Sick and Redundancy Pay
Long Service Leave
Vendor assist in the
Valuing of stock
Wages for staff
What is the state of the
Monthly Sales Dissection 80
Review Debtors’ Ledger – 70
any large credit notes?
Credit Worthiness Report
on the business 50 Men
Social behaviour changes 40 Women
Technology changes 30 Children
Town Planning 20
Customers – who are 0
they? – demographics? 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
Review the operations Creditors’ Aged
of the business Analysis
Employee work Check the bank
Does the business have
the right product mix?
Any Check suitable
patents, trademarks, lic systems and
enses, copyrights? policies for GST
Order Book Check on stock
Partially completed buying patterns
contracts – check!
Remember, what you are looking for are
clues that the business is not what it is
being built up to be!
The buyer must beware – check, double
check and cross check everything!
Once you sign the contract, it is very
difficult to renegotiate
Business Mission Business Plan, Budgets
Statement and Cashflow Forecasts
Accounting and Regular accounting
Information System Board of
Internal Control System Directors/Board of
Types of books and Advice
s and Contracts
Layout of premises
Does the market
Break-even level of
point, including your
Bankcard, Master Local events register
Card, Visa Card What is happening in the
Other cards – Diners’ local area?
Club, American Express Do you need all the
Government and Council Buy carefully
requirements Listen to experienced
What are the potential employees
risks? Develop an ability to get
Can you handle the on with people
work? Staff Manual
Off season planning