Welcome to Brian Fitzgibbon’s “How To Buy A Business” Information Center.

Buying a small business is a daunting task, particularly for first-timers. The learning curve is so great and the fear factor so high that it is too much for many prospective buyers and they simply give up the chase.

This is a tragedy because the rewards can also be great.

Often but not always financially, but nearly always through a sense of achievement, independence and satisfaction from doing your own thing.

If this is you, then this blog aims to make the task easier by providing a resource of all you need to know to successfully buy a business.

read more on Brian's reasons for starting this site...

December 12th, 2008 | Tags: buy a business, buying a business tips | Category: intro | Comments Off  | 

Michelle Jarvis set up her dress making business after having worked for a large multi-national company for many years.

Right from the very first day she was determined to do things the right way and not cut corners. She knew that she needed a plan of action so that was where she started

List Accounting Requirements

“I am a systems person, my previous company had drummed that in to me and I had always intended to outsource some aspects of the financial side of the business. That included managing the books.

My skills are in dress making and whilst I am very good with figures, I also knew that book keeping was unlikely to be something that I was going to enjoy doing.

In addition to that, my business runs at least six days a week and any spare time I did have would have to be spent on marketing and keeping up to date with industry developments.”

read more on case study how to use an accountant...

October 9th, 2009 | Tags: buy a business, buying a business tips, case study accountant or CPA, how to use an accountant | Category: articles | Leave a comment  | 

Small or medium sized businesses spend literally billions of dollars each and every year on their legal costs.

While I am sure that some of them are getting excellent value for money, I am equally sure that many more are paying way more than they need to.

This article sets out to explain how your lawyer or attorney put their charges together and arrive at that final figure. Understanding this process will allow you to review your own arrangements and from experience, probably discover areas where you can make savings.

read more on understanding how your lawyer or attorney charges...

September 15th, 2009 | Tags: attorney, buy a business, buying a business tips, contingency fees, flat rate, hourly rate, lawyer, lawyer or attorney, retainer, understanding how your lawyer charges | Category: articles | Leave a comment  | 

By far the biggest part of the purchase price of a small family business is goodwill. So it is vitally important to a buyer to have knowledge and understanding of just what goodwill is and how to place a value on it.

This is the final in a series of five articles on valuing goodwill and discusses other factors that affect the valuation, including buying in a recession.

The Seller’s Personality, Work Ethic and Management Skills

This factor is one that cuts both ways. If the seller has abysmal people skills and/or is running the business into the ground because of poor management, then you are in the box seat to get a bargain – that is of course provided that your skills are better than theirs and the situation can be retrieved.

read more on valuing small business goodwill Pt 5...

August 28th, 2009 | Tags: assessing risk, business valuations, buying a business, buying in a recession, checking out a business, components of goodwill, definition of goodwill, diy business valuations, due diligence on a small business, goodwill valuation, how to buy a business, how to value a business, local factors in buying a business, small business risk, the sellers personality, tips on buying a business, valuing franchises, valuing goodwill in a small business | Category: articles | Leave a comment  | 

By far the biggest part of the purchase price of a small family business is goodwill. So it is vitally important to a buyer to have knowledge and understanding of just what goodwill is and how to place a value on it.

This is the fourth in a series of articles on valuing goodwill and discusses the factors that affect your bargaining position.

Demand and Supply

You will pay a lot less for a small retail or service business in a small country town than you will in the city. It’s not that you won’t make the same money – you may make even more because of cheaper rents and higher selling prices – it’s that nobody wants to live there except the locals.

read more on valuing small business goodwill Pt 4...

August 25th, 2009 | Tags: availability of finance, bargaining position, business valuations, buying a business, checking out a business, components of goodwill, definition of goodwill, demand and supply, diy business valuations, due diligence on a small business, goodwill valuation, how to buy a business, how to value a business, the owner is desperate to sell, tips on buying a business, valuing franchises, valuing goodwill in a small business, valuing specialized businesses | Category: articles | Leave a comment  | 

By far the biggest part of the purchase price of a small family business is goodwill. So it is vitally important to a buyer to have knowledge and understanding of just what goodwill is and how to place a value on it.

This is the third in a series of articles on valuing goodwill and discusses the factors that affect the risk level of the business.

Generally Accepted Industry Risk Levels

The risk level of a business is in the end its vulnerability to competition and market forces. Over time a generally accepted risk level has evolved for each industry that reflects the inherent, built-in risks associated with it. These depend upon:

read more on valuing small business goodwill Pt 3...

August 23rd, 2009 | Tags: assessing risk, business valuations, buying a business, buying a job, checking out a business, components of goodwill, definition of goodwill, diy business valuations, due diligence on a small business, future expected profits, goodwill valuation, how to buy a business, how to value a business, industry risk levels, price revenue multiple, rules of thumb, sellers discretionary earnings, small business risk, tips on buying a business, valuing franchises, valuing goodwill in a small business | Category: articles | Leave a comment  | 

By far the biggest part of the purchase price of a small family business is goodwill. So it is vitally important to a buyer to have knowledge and understanding of just what goodwill is and how to place a value on it.

This is the second in a series of articles on valuing goodwill and explains that the first step is to break down the goodwill into components.

The first of these is “Factors That Change Future Expected Profits”.

Goodwill is usually defined as “the value an interested but prudent purchaser would pay for the expected future profits of the business.”

read more on valuing small business goodwill Pt 2...

August 20th, 2009 | Tags: business valuations, buying a business, buying a job, checking out a business, components of goodwill, definition of goodwill, diy business valuations, due diligence on a small business, future expected profits, goodwill valuation, how to buy a business, how to value a business, tips on buying a business, valuing franchises, valuing goodwill in a small business | Category: articles | Leave a comment  | 

By far the biggest part of the purchase price of a small family business is goodwill. So it is vitally important to a buyer to have knowledge and understanding of just what goodwill is and how to place a value on it.

This article, the first in a series on goodwill, explains that it really represents the future profits of the business, that it really does exist despite what some people think, and that “buying a job” is not such a bad thing.

Goodwill is usually defined as “the value an interested but prudent purchaser would pay for the expected future profits of the business.”

So how much should this prudent investor pay for these expected future profits?

read more on valuing small business goodwill Pt 1...

August 18th, 2009 | Tags: business valuations, buying a business, buying a job, checking out a business, definition of goodwill, diy business valuations, due diligence on a small business, goodwill valuation, how to buy a business, how to value a business, tips on buying a business, valuing franchises, valuing goodwill in a small business | Category: articles | Leave a comment  | 

Managing your accountant or CPA is all about getting the best out of them for the not inconsiderable amount of money that you pay them.

In addition to keeping the books in order and making sure that your tax commitments are both met and kept to a minimum, they are also in the ideal position to help you and your business develop and grow.

You should start off with a letter of engagement that clearly defines your working relationship with them; what you both can expect from each other and what your respective obligations are in order to make the relationship work.

First step is to ensure that you have regular, planned communication throughout the year. Leave yourself plenty of time to discuss major items such tax returns before the end of the financial year.

read more on how to avoid problems with your accountant or CPA...

August 9th, 2009 | Tags: accountant, accountant or CPA, avoid problems, buy a business, buying a business tips, working with an accountant or CPA | Category: articles | Leave a comment  | 

cDespite stringent disclosure rules which aim to even things up between the supposedly rapacious seller and the innocent purchaser, it’s very easy for a buyer of a small family business to be caught by buying a dud.

If you’re stuck with a dud business as a result of being deliberately deceived you certainly can take them to court. But you don’t need me to tell you of the costs of litigation, the time it takes (years!), and the very real chance you may not succeed anyway.

This article is the final in a series of six on how to detect the traps and uncover the secrets the seller may be hiding from you.

read more on buying a business the traps Pt 6...

August 3rd, 2009 | Tags: accountants valuation, business valuations, buying a business, buying a dud business, checking out a business, checking the figures, checking the seller, dangers of business valuations, disclosure rules on buying a business, diy business valuations, due diligence on a small business, goodwill valuation, how to buy a business, how to value a business, tips on buying a business, traps to avoid in buying a business, valuing franchises | Category: articles | Leave a comment  |