Business Advice

  Most business buyers chase the wrong opportunities.   They're drawn to trendy startups, cutting-edge technology, or businesses with explosive growth.   Meanwhile, the most sustainable, profitable acquisitions often fly completely under the radar—hidden in plain sight because they appear too ordinary to deserve attention.   What if there was a framework to help you identify these overlooked gems? Enter the SOWS method—a powerful lens for spotting businesses with untapped potential that others routinely ignore.         What is SOWS?   SOWS is a framework for identifying great "boring" businesses—the kind that generate consistent profits without requiring advanced degrees or constant innovation.   The acronym stands for: Stale: Minimal innovation has been adopted Old: The business has been around for a while Weak: The competition is lazy and uninspired Simple: You don't need specialized expertise to run it   These characteristics might sound like warnings to avoid a business, but they're actually powerful indicators of opportunity.   Let's explore why each element of SOWS represents hidden potential rather than a red flag.         Stale: The Overlooked Advantage   What exactly does "stale" mean in the context of a business acquisition?   We're talking about businesses that haven't kept pace with modern practices.   Their website might look like it was designed in 2008. The owners probably don't use social media for marketing.   They might still use fax machines or paper receipts rather than digital solutions.   They send emails from AOL accounts and expect clients to print, sign, and mail documents rather than using electronic signatures.   Why is this staleness actually appealing?   Because it represents enormous untapped potential with minimal risk.   When basic marketing and operational improvements haven't been implemented, you face a much lower risk profile than businesses requiring true innovation.   These archaic practices create a clear path to improvement.   With even fundamental updates to technology, marketing, and operations, you can dramatically increase the business's efficiency and profitability.   Marketing 101—the kind taught in any introductory business course—is rarely implemented in these companies, giving you low-hanging fruit for immediate enhancement.   By applying modern business practices to a stale operation, you can potentially transform a business purchased for pennies into a much more valuable enterprise.   The gap between current performance and potential performance represents your opportunity.         Old: Proven Sustainability   Unlike startups or recently launched ventures, businesses that have operated for years (ideally more than five) have demonstrated staying power.   They've weathered economic cycles, survived competitive threats, and built systems that work, even if those systems aren't optimized.   Old businesses come with significant advantages: Established customer relationships and loyalty Brand recognition within their community Proven demand for their products or services Operational processes that, while potentially inefficient, do function   These businesses operate on what some call the "Lindy effect"—the principle that the longer something has been around, the more likely it is to continue surviving.   A business that has operated successfully for decades has demonstrated a fundamental market fit that new ventures simply cannot prove.   The business might serve as a community landmark, with people using it as a reference point for directions:   "Take your first right after that pack-and-ship store at the corner of Liberty."   This type of embedded presence in a community creates a moat that's difficult for competitors to overcome.         Weak: Competitive Opportunity   When we talk about "weak," we're not referring to the target business itself—we're talking about its competition.   The ideal acquisition candidate operates in a space where competitors are even more behind the times than the business you're considering.   Think about the last time you hired a service provider like a plumber. Were they: On time? Using automated billing? Sending follow-up communications?   For many service businesses, the answer to all three questions is "no."   These industries are ripe with opportunity because the bar for customer experience is set remarkably low.   This competitive weakness creates a clear path to differentiation.   Simple improvements that are standard in other industries—online booking, automated billing, follow-up systems—can quickly position your acquired business as the premium provider in its category, justifying higher prices and attracting more customers.         Simple: Accessible Operations   The final component of SOWS focuses on operational simplicity.   The ideal acquisition doesn't require specialized knowledge or rare expertise to run successfully.   You should be able to explain the business model to an eight-year-old: "People with dirty cars come here and drink a cup of coffee while we make their cars look new again."   Simple businesses typically have: No proprietary technology requiring ongoing R&D No complex industrial processes No scientific or highly specialized knowledge requirements High demand for basic services with relatively few inputs   The beauty of simple businesses is that improvements are equally straightforward.   Once you acquire a SOWS business, you can gradually implement modern conveniences like: Billing software Customer relationship management systems Streamlined operations Outsourced support for routine tasks   These additions build speed and capacity, allowing you to serve more customers at higher rates while maintaining or improving quality.         Applying the SOWS Framework   When evaluating potential acquisition targets, run them through the SOWS checklist: Stale: Does the business use outdated marketing and technology? Is there obvious room for basic modernization? Old: Has the business operated successfully for at least five years? Does it have established customers and community presence? Weak: Are competitors in the space even less sophisticated? Is there a clear opportunity to stand out with basic improvements? Simple: Can you understand the business model quickly? Does it provide a straightforward service or product without requiring specialized expertise?   The more "yes" answers you have, the more likely you've found a hidden gem—a business that others overlook but that offers substantial upside with relatively low risk.         The SOWS Method in Action   Imagine finding a local car wash that's been operating for 20 years.   The owner still uses paper punch cards for loyalty, has no online presence, and relies entirely on word-of-mouth.   Competitors in the area are equally dated, with none offering online booking or membership options.   This business scores high on all SOWS criteria: It's stale (outdated marketing and operations) It's old (20 years of proven sustainability) Its competition is weak (no one is innovating) It's simple (the business model is straightforward)   By acquiring this car wash and implementing basic improvements—a modern booking system, membership program, and digital marketing strategy—   you could potentially double its value within a few years while facing minimal risk of failure, since the core business model is already proven.         The Winning Formula   SOWS—Stale, Old, Weak, Simple—is your winning formula for identifying boring but lucrative businesses that others overlook.   These businesses present the rare opportunity to acquire proven cash flow with significant upside potential and relatively low risk.   While others chase trendy startups or competitive industries, smart buyers focus on these hidden gems—   businesses that might not make headlines but consistently generate profits and respond extraordinarily well to even basic improvements.         Your Next Step   Ready to find your perfect boring business? Start applying the SOWS framework to evaluate potential acquisitions in your area.   Browse our current listings of established businesses for sale at BusinessForSale.com.au

  It's easy to forget that buying a business isn't just about finding the right company—it's about convincing the seller that you're the right buyer.   While you're evaluating business opportunities, owners are evaluating you.    The most attractive businesses often have multiple interested parties, and in these situations, being the highest bidder isn't always enough to win the deal.   Business owners don't just sell to the highest bidder; they sell to the buyer they trust most to continue their legacy, take care of their employees, and maintain relationships with customers.   When you acquire a business, you're not just purchasing assets—you're adopting the owner's life's work.         The Human Element of Business Acquisition   Most business acquisition advice focuses on spreadsheets, due diligence, and negotiations.   But equally important is the human element—building genuine relationships with business owners and understanding what truly matters to them beyond the sale price.   Remember that small businesses are the product of someone's blood, sweat, and tears.   Most sellers want to know their "offspring" is going to a good family.   By positioning yourself as the ideal steward for their business, you create opportunities for more favorable terms and potentially even seller financing that might not be available to other buyers.         Face Time: The Irreplaceable Ingredient   The foundation of seller rapport is simple but often overlooked: you will have to put in some face time and build real relationships with owners for this to work.   When you identify potential acquisition targets, make the effort to visit in person.   Walk into their businesses, introduce yourself, and have genuine conversations when they're not busy.   If physical visits aren't possible, phone calls or personalized emails can open the door to discussion.   Digital communication has its place, but nothing replaces face-to-face interaction for building trust.   As one successful acquirer notes, "The deals I've won weren't because I had the highest offer—it was because the seller felt I understood their business and would respect what they built."         Asking the Right Questions   Engaging with sellers requires thoughtfulness and emotional intelligence.   This isn't an interrogation—it's the beginning of a relationship. As you build rapport, weave these questions into natural conversation:   Understanding Their Journey: How did you get started in the business? What inspired you to choose this line of work? What were you doing before this?     Finding Their Passion: What do you love about being in this industry? What's your favorite part of running this business? What's the most important thing for your customers to know about you?     Learning from Experience: If you had it all to do over again, what would you do differently? What's the toughest part of being in the business? What's a typical day like?   Exploring Their Future: Have you considered selling the business? How come? What are you hoping to do next? What matters most to you—your legacy, employees, customers, sale price, or reputation?   The key is to ask these questions naturally throughout the conversation, not rapid-fire like an interview. You're getting to know them as a person, not just as a business owner.         The Two-Way Street of Seller Meetings   Keep in mind that the seller is likely just as interested in your motivations and capabilities. Be prepared to clearly articulate: Why you're interested in their specific business How your background and skills make you a good fit What your vision is for the company's future How you plan to take care of existing employees and customers   The most underrated part of getting to know owners is actually getting them to like you.   People sell to people they connect with—those who share their values and vision.   As obvious as it sounds, owners want to sell to someone who genuinely appreciates what they do for a living.         Showcasing Your Value   Knowing your skills, passion, and expertise is valuable to you, but it's crucial when selling your acquisition bid to the seller.   The best predictor of future behavior is past behavior, so be ready to share your relevant accomplishments.   This isn't a job interview (please don't bring a PowerPoint presentation), but in a non-boastful way, mention experiences that demonstrate your: Ability to learn and grow Track record of success in relevant areas Resilience through challenges Commitment to values that align with the business Upward trajectory in your career or previous ventures   Focus on how you've won in the past, not just what duties you've performed.   Concrete examples of overcoming obstacles or achieving growth tell a far more compelling story than a list of responsibilities.         Understanding the Seller's True Motivations   Learning a seller's genuine motivations requires patience.   Their reasons for selling are often nuanced and may not be fully revealed in initial conversations.   You may need several meetings to build the trust necessary for them to share their real motivations.   Sometimes what sellers say they want and what actually matters most to them are different.   For example, a seller might emphasize sale price in early discussions, but their deeper concern might be ensuring their long-term employees are protected.   By taking time to build trust, you'll uncover these underlying priorities.   Key motivators to listen for include: Concern for employee welfare Desire to preserve company culture Interest in maintaining community relationships Legacy protection for the business name or reputation Retirement planning needs Health or family considerations         Becoming the Preferred Buyer   When you understand what truly matters to the seller, you can structure your offer to address their specific concerns and desires.   This might include: Offering employment contracts to key team members Proposing a gradual transition period Committing to maintain the company name or core values Structuring payments to support the seller's retirement plans Including the seller in strategic decisions during a transition period   Remember that price is just one factor in the seller's decision.   A slightly lower offer that addresses their deeper concerns may win out over a higher bid that ignores these priorities.         The Personal Connection Advantage   The most successful business acquisitions often happen when buyers and sellers develop genuine personal connections.   This doesn't mean forced friendliness—it means finding authentic common ground.   Shared interests, values, or backgrounds can create bonds that transcend business transactions.   When a seller sees you as someone who "gets" them and their business, they're more likely to choose you even when other factors are relatively equal.   As one business owner who sold to a non-highest bidder explained: "I could tell they understood what made our business special.   The highest offer came from someone who saw us as just numbers on a spreadsheet.   The difference in price wasn't worth risking everything we'd built."         Your Next Step   Ready to start connecting with business owners and positioning yourself as their ideal buyer?   Begin by practicing your personal story and preparing thoughtful questions for seller conversations.   Then explore our current listings of successful businesses for sale at BusinessForSale.com.au

  "I just want a profitable business."   We hear this from buyers constantly.   It's like saying you just want "a good relationship" or "a nice house" – technically accurate, but far too vague to be useful.   Without specifics, you'll struggle to recognize the right opportunity when it appears.   After helping hundreds of business buyers find their perfect match, we've learned that those who clearly define what they want from business ownership are significantly more likely to find fulfillment after acquisition.   This second crucial step in your business buying journey is about creating a detailed vision of your ideal ownership experience.       Vision Boarding for Business   Think of this as vision boarding, but for your business future.   Most people approach business buying backwards – they look at what's available and then try to convince themselves why they should want it.   This leads to acquisition regret, when the day-to-day reality doesn't match their unarticulated expectations.   To avoid this fate, you need to deeply consider what you're hoping to get from business ownership. This goes beyond financials and digs into lifestyle, fulfillment, and purpose.   As one successful business buyer put it: "Writing down what I wanted from business ownership was like creating my ideal dating profile.   Being specific about what I was looking for saved me from wasting time on businesses that would have made me miserable, regardless of their profit potential."         Defining Your Success Criteria   Take some time to thoughtfully answer these revealing questions:   1. What's Your Definition of Success?   What is the one outcome that would make you consider this a win?   Is it achieving financial independence?   Creating jobs in your community?   Building something your children might take over someday?   Having more control over your schedule?   Applying specialized knowledge you've developed?   Your answer might be something like: "I want to generate $250,000 in annual income while working no more than 30 hours per week and being able to take three weeks of uninterrupted vacation each year."     2. Impact Assessment   What impact would achieving that result have on your life and your business?   Think about both the practical and emotional effects. How would it change your day-to-day existence?   Your family dynamics?   Your sense of fulfillment?   For example: "This would allow me to be present for my children's activities, reduce my stress levels, provide financial security for my family, and give me the satisfaction of building something meaningful."     3. Obstacle Awareness   What might get in your way? How will you overcome that?   Be honest about potential challenges.   Do you lack certain skills?   Is capital a constraint?   Are there industry-specific hurdles you're concerned about?   Consider both internal obstacles (your own limitations or fears) and external barriers (market conditions, competition, regulations).     4. Geographic Preferences   What geographic region do you want the business to be in?   Is location flexibility important to you, or are you committed to a specific area?   Would you relocate for the right opportunity? Do you need proximity to family or certain amenities?   Remember that different locations come with varying costs, regulations, customer bases, and lifestyles.     5. Industry Alignment   Which sectors are you most comfortable in?   Where does your innate ability and experience give you an unfair advantage?   Building on your Business Bullseye analysis from Step 1, which industries or business types would leverage your unique combination of skills, passions, and connections?   This might be directly related to your professional background, or it could be an adjacent field where your transferable skills provide unique value.     6. Value-Add Potential   Where can you add the most value to the business?   Are you a marketing whiz who could help an established business reach new customers?   A systems expert who could streamline operations?    A people manager who could build and develop a stronger team?   Understanding your potential contribution helps identify businesses that would benefit most from your specific strengths.     7. Learning Requirements   What would you need to learn to make this leap?   No matter how experienced you are, buying a business will require learning new things.   Are you prepared for that learning curve?   What specific knowledge or skills would you need to develop?   Be realistic about your willingness and capacity to acquire new expertise.     8. Size and Scale   How big will the business need to be? (Revenue and profit expectations)   Do you want a small lifestyle business that supports you comfortably, or are you aiming for significant scale?   What annual revenue and profit would satisfy your goals?   Remember that bigger isn't always better – larger businesses come with more complexity, stress, and responsibility.     9. Business Appeal   Based on your goals, knowledge, and skill set, which businesses appeal most to you?   This is where you start connecting your personal profile to specific business types.   Which businesses would allow you to leverage your strengths while meeting your goals?     10. Portfolio Approach   Are you after one business or many?   Do you want to focus entirely on one operation, or do you envision building a portfolio of complementary businesses over time?     11. Involvement Level   How much do you want to work in the business?   Are you looking for a hands-on role where you're actively involved in daily operations?   Or do you prefer a more strategic position, overseeing managers who handle day-to-day responsibilities?   Be honest about how many hours per week you're willing to commit, and in what capacity.       From Criteria to Clarity   Knowing the type of experience you want will help you start to notice the right business opportunities for you, the future owner.   The exercise isn't merely academic – it creates a filter through which you'll evaluate every potential acquisition.   Think of it like crafting a detailed online dating profile.   You wouldn't write "Open to whatever, good vibes only" and expect to find your perfect match.   Having low or minimal standards guarantees disappointment – or perhaps brief excitement followed by long-term regret.   By defining your ideal business owner experience in detail, you're creating a powerful tool that will: Save time by helping you quickly eliminate opportunities that don't align with your vision Reduce stress by providing clarity during the evaluation process Increase confidence in your decisions, knowing they're aligned with your defined criteria Improve negotiation leverage by keeping you focused on what truly matters to you Enhance post-acquisition satisfaction by ensuring alignment between expectations and reality       Putting It Into Practice   David, an operations expert with 20 years in manufacturing, initially approached business buying with a simple goal: "I want something profitable in my area."   After completing this exercise, his criteria evolved to:   "I want a B2B service business with $1-3 million in revenue and at least $300,000 in annual profit.   It should have 10-25 employees, established systems that could benefit from modernization, and primarily serve industrial clients.   I'm willing to work 45-50 hours weekly initially, transitioning to 30-35 hours within two years as I build my management team.   The business must be within 45 minutes of my home and allow me to leverage my experience optimizing operations and developing growth strategies."   With this detailed vision, David quickly recognized the perfect opportunity when a commercial cleaning company serving industrial clients came on the market.   Despite being in an industry he hadn't initially considered, it met his core criteria and allowed him to apply his operational expertise in a new context.       Moving Forward   After completing this vision exercise, you'll have a comprehensive profile of your ideal business ownership experience.   This clear picture will act as your compass, helping you navigate the complex landscape of business acquisition opportunities.   Take time to revisit and refine these answers as you learn more throughout your search process.   Your criteria may evolve, but having this foundation will ensure you stay focused on finding a business that delivers both financial returns and personal satisfaction.       Your Next Step   Ready to find a business that matches your ideal ownership vision?   Explore our current listings of successful businesses for sale at BusinessForSale.com.au

  Mark spent six months analyzing spreadsheets, touring facilities, and reviewing financials for dozens of businesses. He made three offers.   All fell through. Frustrated, he called us: "I've looked at everything from coffee shops to manufacturing companies. Nothing feels right. Am I being too picky?"   After a brief conversation, the problem became clear.   Mark knew what businesses were available, but he had no idea what business was right for him.   It's a common challenge.   Many buyers begin their search by scanning listings rather than looking inward first.    The result? Wasted time, missed opportunities, and sometimes disastrous purchases that leave new owners wondering, "What was I thinking?"         Know Thyself: Defining What You Want from Your Business   As Robin Sharma wisely noted:   "The more clarity you get as to who you want to become, the quicker you can start making the choices needed to get you there."   Have you noticed that the clearer you are about what you want, the faster and easier it is to achieve?   Conversely, when you're vague about your goals, motivation fades and progress stalls.   This principle applies tenfold when buying a business.   You can't hit a bullseye if you don't know where the target is.   And you certainly can't buy the right business by simply copying what worked for someone else.   You need a business that's right for YOU.   That means getting crystal clear about what you want from your business ownership journey, what unique qualities you bring to the table, and what specific criteria your ideal business needs to meet.         Uncover Your Zone of Genius   The first step is finding what you uniquely bring to the table.   To buy a business that fits you perfectly, you need self-awareness and a realistic understanding of your strengths.   Surprisingly, many people lack this clarity.   A straightforward way to gain insight is by creating what we call a "Business Bullseye" - a Venn diagram with three critical components: Passion, Experience & Skills, and Network.         Your Business Bullseye: Three Key Elements   Finding your perfect business match requires understanding three key elements that, when combined, create your unique "Business Bullseye": Passion: What naturally energizes and interests you Experience & Skills: What you're genuinely good at doing Network: Who you know that could contribute to your success When you find a business opportunity that leverages all three of these elements simultaneously, you've hit your Business Bullseye - the sweet spot where you're most likely to thrive as a business owner.   Let's explore each element in detail.   1. Passion: What Lights Your Fire Think about what activities completely absorb you. What can you do for hours without checking the time?   When was the last time you became so engrossed in something that you lost track of hours?   Consider these questions: What topics or activities do you find yourself constantly drawn to? What problems do you love solving? What industries or fields naturally interest you? What work would you do even if you weren't paid for it? Your answers reveal your "business love language" - the activities and environments where you'll naturally thrive as an owner.   List everything you're passionate about, even if it doesn't seem directly business-related.   Did you know?   Studies show that business owners who are passionate about their industry are 65% more likely to stick with their businesses through difficult periods compared to those who purchased solely for financial reasons.     2. Experience & Skills: Your Unique Toolkit   Next, reflect on what you're genuinely good at. These are tasks you perform better than most people you know.   You don't need a PhD or world-class expertise - you just need to be better than the average person.   Consider: What professional skills have you developed? What do people regularly come to you for help with? What specialized knowledge have you acquired? Which of your abilities consistently receive positive feedback?   When thinking about skills, consider what Scott Adams calls your "skill stack" - the unique combination of your abilities.   Being in the top 1% of any single skill is extraordinarily difficult, but being in the top 10% of several complementary skills creates a powerful and rare combination.   For example, someone who is moderately good at business operations, marketing, and relationship building has a much more valuable skill stack than someone who excels at just one of those areas.     3. Network: Your Human Resources   Finally, consider who could help make your future business successful.   These might be people you already know or communities you're connected to.   Think about: Which professional contacts might become clients, suppliers, or advisors? What family members have relevant expertise or connections? Which friends or acquaintances work in industries you're interested in? What community groups or online networks could support your business?   Your network represents potential mentors, clients, employees, and partners who could contribute to your success.   Many successful business acquisitions leverage the buyer's pre-existing relationships to accelerate growth after the purchase.       Where the Circles Intersect: Finding Your Bullseye   After mapping out these three areas, look for where they overlap.   The sweet spot - where your passions, skills, and network converge - is your business bullseye.   This is where you'll likely find the greatest personal satisfaction and business success.     How This Works in Practice   Consider the example of John:   Passion: John loves building things and helping his community.   He gets energized by being the go-to problem solver, seeing his work in the real world, and creating systems that operate smoothly.   Experience & Skills: John has a background in logistics - he's organized, detail-oriented, and excellent at planning.   He's also a natural leader who helps others work efficiently. His technology skills allow him to implement tools that streamline operations.   Network: John's brother-in-law is a tradesman in plumbing who's constantly busy with work.   John has noticed that his brother-in-law struggles with organization and technology, despite being skilled at his craft.   After analyzing these elements, John realized that a plumbing company might be his perfect business match.   He could handle the business operations, systems, and growth while partnering with or employing skilled tradespeople who love the hands-on work.    His understanding of logistics would help optimize scheduling and inventory, while his technological abilities could modernize operations.   John then expanded his search to "plumbing-adjacent businesses" and discovered opportunities in commercial plumbing, HVAC services, and septic tank installation - all areas where his core skills could create value.       Putting Your Bullseye to Work   Once you've identified your business bullseye, keep it with you during your search.   It becomes your compass, helping you quickly recognize opportunities that align with your unique strengths and avoid ventures that clash with your nature.   Imagine coming across a manufacturing business with excellent financials and a motivated seller.   At first glance, it seems perfect.   But when you consult your bullseye, you remember that you're not detail-oriented and don't enjoy building physical products.   Despite the attractive numbers, you recognize it's not the right fit for your strengths and preferences.   As you tuck your notes away, you realize, "I would not feel comfortable with a manufacturing company." You've just saved yourself from a potential nightmare!       Beyond the Basics: Personal Fulfillment Meets Financial Success   This approach differs fundamentally from how institutional buyers evaluate businesses.   Private equity firms focus primarily on financial metrics: cash flow, repeatability, scalability, and exit potential.   They rarely consider whether the owner will enjoy running the business.   We believe in layering "not hating your life" into the equation.   After all, what's the point of owning a profitable business if you dread going to work every day?   By identifying your zone of genius and using it to guide your acquisition search, you'll find a business that not only succeeds financially but also aligns with who you are.   This personal-professional alignment creates resilience during challenges and amplifies satisfaction during successes.       The Bottom Line   Remember: there is no such thing as a universally "good business to buy" - there's only the right business for YOU.   The perfect acquisition for a former doctor might be a medical practice or healthcare supplier. A veteran property manager might thrive owning a property management company.   By understanding your unique combination of passions, skills, and network connections, you create a powerful filter that helps you quickly identify promising opportunities and avoid costly mismatches.   This focused approach saves time, reduces stress, and dramatically increases your chances of finding a business that delivers both financial rewards and personal fulfillment.         Your Next Step   Ready to find a business that matches your unique strengths?    Begin by creating your own Business Bullseye, then explore our current listings of successful businesses for sale at BusinessForSale.com.au

  Success in business acquisition doesn't happen overnight—despite what that guy in your LinkedIn feed with the rented Lamborghini wants you to believe.   The business buying journey is less like a romantic comedy (meet business, fall in love, live happily ever after) and more like an epic saga with plot twists, unexpected challenges, and the occasional villain.   First-time buyers typically enter this arena wearing rose-colored glasses, armed with optimism and spreadsheets, only to discover that owning a business is the entrepreneurial equivalent of adopting a temperamental exotic pet—rewarding but requiring far more patience, resources, and late nights than the glossy brochure suggested.   The statistics tell the sobering tale: according to industry data, nearly 30% of newly acquired small businesses change hands again within 24 months.   The primary culprit? Rushing the process.         The Reality Check: Business Acquisition Isn't Speed Dating   Did you know that the average successful business acquisition takes 6-9 months from first look to closing?   Yet studies show first-time buyers typically expect to complete the process in less than 12 weeks.   That's like expecting to run a marathon after a weekend of training—technically possible, but likely to end in tears, medical attention, or both.     Most new business buyers enter the arena with optimism but quickly face harsh realities.   The transition from employee to owner is less like moving from the passenger seat to the driver's seat and more like suddenly being asked to fly the plane.    Without the right mindset, failure isn't just possible—it's practically scheduled in your calendar.         Why First-Time Buyers Rush (And Pay the "Impatience Tax")   The urge to move quickly comes from several predictable places: Financial pressure: Nothing accelerates poor decision-making quite like watching your savings account shrink while you're between paychecks Competition concerns: The "someone might steal my perfect business" syndrome, despite the fact that there are literally thousands of businesses for sale at any given moment Excitement override: The business equivalent of proposing marriage on the first date because "when you know, you know" Seller pressure: "I've got three other buyers looking at it this weekend" is the business broker's version of "this offer expires today" Overconfidence: That summer job you had 15 years ago in the industry clearly qualifies you to run a multi-million dollar operation in that space, right?         The Patience Paradox (Or: Good Things Come to Those Who Wait... and Verify)   Here's an inconvenient truth: The businesses most worth buying typically take the longest to properly evaluate and acquire.   It's like fine wine versus boxed wine—one requires patience but delivers satisfaction, the other offers immediate gratification followed by regret.   Consider these timeframes (and compare them to your expectations): Finding the right business: 3-6 months (minimum), during which you'll kiss many business frogs before finding your prince Proper due diligence: 1-3 months (cannot be rushed unless you enjoy surprises—and not the good kind) Negotiation and closing: 1-2 months (often longer if lawyers are involved, and they're always involved) Stabilization period: 12 months (yes, a full year of wondering "what have I done?" at 3 a.m.)     Red Flags You're Moving Too Fast (Or: How to Spot Your Future Regrets)   Watch for these warning signs in your acquisition process: Making decisions based primarily on emotion rather than data (your excitement is not a business plan) Skipping steps in due diligence because "the seller seems honest" (so did Bernie Madoff) Feeling pressured by arbitrary deadlines (artificial scarcity is not just for infomercials) Not investigating customer concentration (finding out 80% of revenue comes from one client is like discovering a flag you should investigate more) Accepting financial statements at face value (creative accounting isn't just for Hollywood movies) Rushing because you need the business income immediately (desperation makes a poor business partner) Limited physical visits to the business location (Zoom doesn't capture the smell of failing equipment or employee despair)         Essential Due Diligence (Or: Questions You'll Wish You'd Asked)   The businesses that succeed post-acquisition almost always have owners who thoroughly investigated: Financial reality: Three years of validated financial statements (because one good year might be a fluke, but three good years is a pattern) Customer health: Did you know that in the average business, 20% of customers generate 80% of complaints? Guess which ones the seller won't mention. Staff assessment: That key employee who "definitely plans to stay" has already updated their LinkedIn profile to "open to work" Operational systems: Does the business run on proven systems or on the owner's charisma and 80-hour work weeks? Market position: Is the business a leader or merely surviving? There's a difference between a rising tide and a sinking ship. Supplier relationships: Are you buying a business or just an expensive introduction to suppliers who may or may not want to work with you?         The First-Year Reality (Or: Welcome to Ownership, Hope You Survive the Experience)   Even with perfect due diligence, expect challenges. According to a survey of business buyers, the first year typically includes: Key systems breaking down within 90 days (usually the expensive ones) 40% of staff "testing" the new owner (sometimes creatively) At least one major customer deciding it's time to "explore options" Cash flow surprises that make your business plan look like fantasy fiction Working hours that make your previous job seem like a part-time hobby     The Patient Buyer's Playbook (Or: How Not to Become a Cautionary Tale)   Successful buyers share common approaches: They embrace the timeline: Understanding that thoroughness beats speed (just like in relationships and cooking) They maintain perspective: Keeping emotional distance from the transaction (it's a business, not a date) They verify everything: One business buyer discovered the seller's "inventory" included items borrowed from another store They prepare for worst-case scenarios: Having financial and operational contingencies (because Murphy's Law is the only business principle that works 100% of the time) They look beyond the purchase: Planning for post-acquisition integration from day one (the purchase is just the wedding; the marriage is what follows)         The Bottom Line   Business acquisition can be incredibly rewarding, but only for those who approach it with the right mindset and timeline.   The market doesn't reward speed—it rewards thoroughness, preparation, and patience. As the old business saying goes: "Measure twice, cut once, then measure again just to be sure."     Remember: A business purchased in haste becomes a master class in regret management.   The right opportunity, properly vetted, becomes not just an asset but potentially the best decision of your professional life.         Ready to Explore Your Options? Browse our current listings of successful businesses for sale at BusinessForSale.com.au

  Think all the business action happens in Sydney's gleaming towers or Melbourne's famous laneways?    Think again.   Australia's small business landscape is more diverse than you might expect, with opportunities stretching from coastal cafes to outback enterprises.       The Big Picture: A Nation of Entrepreneurs   The numbers tell an impressive story about Australian small business: 98% of all Australian businesses are small businesses 2.5 million small enterprises keeping the economy moving 69% operate in metropolitan areas 31% operate in regional Australia Added 164,172 new businesses last year (quite the achievement)       State by State: Who's Leading the Pack?   Some interesting patterns are emerging across the country: ACT surprising everyone with 3.3% growth (not just government after all) Queensland showing strong momentum at 2.1% growth Hobart proving size doesn't matter with 3.0% growth Victoria taking a brief pause for breath Regional areas in Queensland, NSW, and WA demonstrating remarkable strength       Business Hot Spots: Where to Find Them   Metropolitan Centers   The urban hubs drawing entrepreneurs like magnets: Sydney Inner City (harbor views included) Melbourne City (coffee optional but recommended) Wyndham (Victoria's rising star) Boroondara (where business meets lifestyle) Perth City (where business hours run on WA time)   Regional Powerhouses   These regional spots are bustling with activity: Geelong (Victoria's second city making first-rate moves) Ormeau – Oxenford (Gold Coast's business backbone) Newcastle (reinventing itself for the future) Toowoomba (garden city, growth center) Townsville (where tropical meets practical) Here's something interesting - Queensland and Tasmania actually have more businesses in their regional areas than their cities.   Who would have guessed?       What's Everyone Doing?   Here are some of our fastest growing sectors: Construction (building tomorrow's Australia) Professional Services (keeping business moving) Real Estate (location, location, location) Transport & Postal (connecting it all together)       The Business Weather Report   The ASBFEO Small Business Pulse reveals some interesting trends: Current Conditions: Post-COVID stability emerging Minimal 0.1% decline last quarter Business confidence steadying Key Challenges: Rising operational costs Pressure on profit margins Increasing insurance and freight costs Positive Signs: Growing interest in innovation Strong new business enquiries Expanding employment opportunities       What This Means for Buyers   If you're considering joining the business community, here's what to consider: Location Strategy: Metropolitan areas offer volume and variety Regional areas present unique opportunities ACT and Queensland show promising growth Industry Insights: Consider local market dynamics Research area specializations Watch for emerging sectors       Ready to Find Your Opportunity? Ready to explore available businesses? Browse our current listings of successful businesses for sale.  

  It's a question every business buyer faces from friends and family: "If the business is doing so well, why would they sell it?"   The assumption is that owners only sell failing businesses.   The reality is far more interesting – successful businesses change hands every day for perfectly logical reasons.       The Liquidity Puzzle   Here's a surprising statistic: 67% of small business owners have over 75% of their net worth tied up in their business.   This creates what financial advisors call "the millionaire's dilemma" – being wealthy on paper but cash-poor in practice.     Consider this common scenario: A 60-year-old business owner has built a company worth several million dollars.   The business is thriving, but they can't easily access that wealth without selling at least a portion of the business.   A typical solution often looks like this: Sell 80% to a qualified buyer Retain 20% ownership Stay on as General Manager with a salary Receive a substantial sum to invest in retirement planning Gradually transition out while training their successor This creates a win-win situation where the owner gains financial freedom while ensuring their legacy continues under new ownership.       Beyond Liquidity: Why Successful Owners Choose to Sell   1. Retirement Planning   Studies show the average business owner works 50+ hours per week well into their 60s – that's 40,000 more hours than their employed peers.   By their mid-50s, many successful owners are ready to convert their life's work into retirement security.   2. Geographic Relocation   In 2023, 23% of business sales were triggered by owners relocating to different states.   While technology enables remote work for many professions, running a local business from across the country rarely proves practical.   3. Serial Entrepreneurship   An interesting trend is that lots of successful business sellers either buy or start another company within two years.   Some owners excel at building and scaling businesses but find more satisfaction in new ventures than long-term operations.   4. Family Priorities   Recent surveys reveal that lots of business owners have missed significant family events due to work commitments.   This often leads successful owners to reassess their priorities, especially as children grow older or health considerations arise.   5. Diversification   Financial experts recommend having no more than 40% of net worth in any single asset. Smart business owners often sell to diversify into: Real estate investments Index funds Bonds Other business ventures Retirement accounts   6. Personal Goals   Common post-sale aspirations include: Property investment Extended travel Philanthropic work Further education New business ventures in different industries     What This Means for Buyers   Understanding these motivations helps buyers in several ways: Identify genuine opportunities Navigate negotiations more effectively Structure deals that benefit both parties Build confidence in the purchase decision     The Bottom Line   When someone questions why a successful business is for sale, the answer is often more straightforward than they might expect.   Smart owners frequently sell at the peak of what they feel like they can or want to build.   This benefits both parties – sellers can maximise their exit value while buyers acquire a proven business at its best.     Businesses sold that are still growing are way more likely to succeed under new ownership compared to those sold during decline.   This makes buying a successful business from a seller with clear, logical motivations one of the smartest paths to business ownership.     Ready to Find Your Opportunity?   Now that you understand why successful businesses come to market, you're better equipped to evaluate opportunities and have those important conversations with friends and family.   Ready to explore available businesses? Browse our current listings of successful businesses for sale.

  For buyers dreaming of their next acquisition and sellers planning their escape route (er, strategic exit), here's a truth about business deals that's harder to ignore than your accountant's quarterly reminders:    Growth shouldn't be a requirement - it should be a choice.     While many business brokers push growth stories like they're selling miracle solutions ("Just add marketing and watch it grow!"), the smartest buyers and sellers know better.   After all, if business growth was as simple as following a formula, we'd all be sipping cocktails on our private islands by now.         The Real Cost of Getting Bigger   For sellers: If you've built a business that runs smoother than a well-oiled machine at its current size, don't let anyone tell you that's a weakness.   That simple website and steady customer base you've maintained?   They're not signs of complacency - they're proof you understand something many don't: sometimes 'enough' is better than 'more.'     For buyers: Before you dismiss a "small" business or start planning changes faster than a teenager changes social media profiles, understand what growth really costs.   Marketing these days takes $15-20 out of every $100 a business makes. For a business making $2 million a year, that's up to $400,000 in new expenses.   Suddenly that seller's "old school" approach doesn't look so dated, does it?     Money management becomes your new best friend - think of it as adopting a hungry teenager who's just discovered both gym memberships and food delivery apps.   That exciting new big customer might mean an extra million in sales, but can you wait four months to get paid?   Meanwhile, your bills arrive with the predictability of a taxi in a rainstorm.         The Hidden Headaches   Growth isn't just expensive in dollars – it costs time, that precious commodity you can't buy back with all those profits you're chasing.   Managing more people isn't just about bigger pay packets; it's about becoming part therapist, part referee, and part mind reader.   It's like herding cats, if the cats all had email addresses and strong opinions about the office coffee.         When Growth Becomes Necessary   Here are four situations where growth isn't optional (think of these as the four horsemen of the forced-growth apocalypse): Rising Loan Payments: When interest rates climb faster than your stress levels. Competitive Pressure: Because staying the same size in a growing market is like bringing a calculator to a supercomputer convention. Investment Requirements: Outside investors usually demand growth with the patience of a hungry toddler. High Purchase Prices: When you've paid premium prices, you can't afford economy class returns.          What Makes a Business Truly Valuable   For a deal to work for both parties, look for these three elements that make growth truly optional: Current Profitability: The business should already make good money, not just promise future riches. It's like buying a house - would you rather have one that's comfortable to live in now, or one that's "going to be amazing" after three years of renovations? Manageable Obligations: Low fixed costs mean freedom to choose your path. Think of it as the difference between driving a paid-off car and having a luxury lease payment breathing down your neck every month. Growth Potential Without Pressure: The best businesses can grow if desired but don't require it for survival. It's like having a spare bedroom - nice to have when guests visit, but you're not forced to rent it out to make the mortgage.         The Beauty of Choice   Sellers: If you've built a stable, profitable business that doesn't depend on constant growth, you've created something more valuable than you might realise.   Don't let anyone convince you that "lifestyle business" is a dirty phrase.   Your focus on sustainability might be your strongest selling point - after all, nobody complains about a car that starts every morning without drama.     Buyers: When evaluating businesses, remember that inheriting a well-oiled machine at its current size might be worth more than a larger operation that needs constant tinkering.   It's like choosing between a reliable family restaurant and a trendy new cafe that's still "figuring things out."         Smart Deal-Making   The best deals happen when both sides understand the value of choice.   For sellers, it means finding buyers who appreciate the steady foundation you've built rather than those promising to "revolutionise" everything faster than a tech startup burns through venture capital.     For buyers, it means recognising that sometimes the best opportunities aren't the ones promising explosive growth, but rather those offering the freedom to grow on your own terms.   After all, would you rather have a business that lets you sleep at night, or one that has you checking your phone at 3am?         The Real Freedom   Think of it this way: A business that gives you choices is like a Swiss Army knife - useful in multiple situations but not forcing you to use every tool at once.   A business that demands constant growth is more like a runaway treadmill - exciting until you realise you can't slow down without falling off.     Here's what the savviest deal-makers know: The real value isn't in forced growth or stagnation - it's in having the freedom to choose your path.    Whether that means expanding when opportunities arise, maintaining steady profits, or even scaling back during certain seasons, the choice should be yours to make.     The next time you're in deal discussions, try this simple test: Ask about the business's potential to maintain its current size profitably.   If suggesting stability causes more panic than a printer jam five minutes before a client meeting, you might want to reconsider the deal.     After all, in the world of business ownership, true success isn't measured by how fast you can grow - it's measured by how well you can sleep at night with the decisions you've made.   Want to find your next business? Search all the businesses currently for sale in Australia here.  

  In hundreds of business transactions, we've discovered a simple truth: a truly sellable business is like a well-built Jenga tower.   You should be able to remove any single piece without the whole structure collapsing.     This is the Jenga Test - four critical questions that reveal whether a business is built to last or ready to topple.   For buyers, these questions help identify solid opportunities.   For sellers, they show where to strengthen your business before going to market.       Can the Owner Step Away Without Chaos?   This is the ultimate test. Remove the owner block from your business Jenga tower - what happens?   In an unsellable business, removing the owner means: Customers don't know who to call Employees can't make basic decisions Bills don't get paid on time Sales processes grind to a halt In a sellable business, the owner's departure barely causes a ripple because: Systems and processes drive daily operations Management team handles decisions independently Customer relationships are institutional, not personal Financial operations are automated or well-staffed For buyers, this means spending time observing how the business runs when the owner isn't there.   For sellers, it means starting to make yourself unnecessary well before you plan to sell.       Is the Client Base Diversified?   Pull out your biggest client block. Does everything collapse?   An unsellable business often has: One client representing 30%+ of revenue A few key accounts providing most income Heavy reliance on personal relationships No systematic way to acquire new clients A sellable business shows: No client exceeds 10-15% of revenue Broad customer base across sectors Institutional client relationships Proven customer acquisition system For buyers, examining customer concentration isn't just about numbers - it's about understanding the stability of those relationships.   For sellers, it's about building a broad foundation that can support the business through transitions.       Are Key Suppliers and Employees Replaceable?   Try removing any single employee or supplier block. What breaks?   Warning signs include: "Only Sarah knows how to handle that account" "We get 80% of our inventory from one supplier" "John's the only one who understands our software" "That client only works with Mike" Strong businesses have: Cross-trained teams Multiple supplier relationships Documented processes and procedures Shared client relationships For buyers, this means looking beyond the organizational chart to understand real dependencies.   For sellers, it's about building redundancy and reducing single points of failure.       Are Critical Contracts Assignable?   This is often the hidden Jenga block that brings everything down.   Can key contracts transfer to a new owner?   Problems to watch for: Non-assignable client contracts Lease agreements requiring landlord approval Supplier contracts tied to current ownership License agreements that don't transfer What you want to see: Clearly transferable contracts Standard assignment clauses Limited change-of-control restrictions Documented client consent processes For buyers, this requires careful due diligence with legal counsel.   For sellers, it means reviewing and potentially renegotiating agreements before going to market.       Putting It All Together   The strongest businesses can lose any single element without failing: The owner goes on vacation A major client leaves A key employee departs A supplier relationship changes For sellers, this means systematically strengthening your business around these four areas.   Start with your weakest block - where would your business Jenga tower wobble most?     For buyers, these four questions provide a framework for evaluating opportunities.   Look beyond the financials to understand the structural integrity of the business.     Remember: The best time to run the Jenga Test isn't during a sale - it's now.   Whether you're building to sell or looking to buy, understanding these four critical elements can mean the difference between a successful transition and a costly collapse.     Ready to start applying the Jenga test?   Search all the businesses for sale in Australia here.   To find your next business.  

Do you know the difference between an IM and SAV? Or what exactly due diligence covers? You might think you're supposed to know all this business buying and selling talk by now. But hey, no one is born knowing how to buy or sell a business. So, here's a bunch of those fancy terms and phrases that people throw around when they're talking about buying or selling businesses:   AcquihireAcquihire refers to the acquisition of a company primarily for the skills and expertise of its staff, rather than for its products or services. In an acquihire, the focus is on bringing talented teams into the acquiring company, often to enhance its own workforce or to gain expertise in a specific area.   Example: Imagine you are looking at a listing for a small tech startup that has developed an innovative software application. The listing might not explicitly state "acquihire," but it may emphasise the team's skills and experience, especially in areas that are currently in high demand, such as artificial intelligence, machine learning, or data science.   In this scenario, a larger tech company might consider acquiring this startup not primarily for its software product, which might still be in development or not yet profitable, but rather to integrate the startup's skilled team into their own workforce. This could be particularly appealing if the acquiring company is looking to quickly bolster its capabilities in a specific technological area and recognizes that hiring such talent individually would be more time-consuming and potentially more expensive.   In an acquihire, the employees of the acquired company are usually offered roles in the acquiring company, and the terms of the deal may include arrangements for retaining these employees for a certain period. The acquiring company benefits from the immediate integration of a skilled team, while the employees of the acquired company gain security and resources from a larger organisation.   Confidentiality AgreementA Confidentiality Agreement in the context of buying or selling a business in Australia is a legal contract that ensures all parties involved keep certain sensitive information private. This type of agreement is crucial in business transactions, where the disclosure of proprietary information can impact competitive positioning, operational integrity, or overall business valuation.   Example: Consider you're interested in purchasing a well-established restaurant in Sydney. Before the current owner shares detailed information such as financial performance, customer data, secret recipes, or supplier contracts, they require you to sign a Confidentiality Agreement. This agreement doesn't necessarily signal that the deal will go through, but it does protect the restaurant's sensitive data during negotiations.   As a potential buyer, signing this agreement means you agree not to disclose or misuse the information for any purpose other than evaluating the business opportunity. For the seller, it provides a safety net, ensuring that their trade secrets or customer lists won't be leaked or used against them if the sale doesn't materialise. Breaching this agreement can lead to legal repercussions, highlighting the importance of maintaining confidentiality throughout the process of buying or selling a business. Deal structureDeal Structure refers to the arrangement and terms under which a business sale takes place. This encompasses various elements including payment terms, asset allocation, tax considerations, and potential earn-outs or contingencies. The structure is tailored to balance the interests of both the buyer and the seller, often involving negotiations to reach a mutually beneficial agreement.   Example: Imagine you are planning to buy a boutique hotel in Melbourne. The Deal Structure in this case could involve several components. Firstly, the payment terms: you might agree to pay a certain percentage of the purchase price upfront, with the rest financed over a set period. This could be beneficial if you need time to raise funds or want to use the hotel's future revenue to pay part of the price.   Next, consider asset allocation: the deal may specify what assets you're purchasing, such as the property, furniture, and the brand name. It might also detail liabilities, like existing staff contracts or supplier agreements, that you'd be taking over.   Tax considerations are also crucial. The structure of the deal can significantly impact tax liabilities for both parties. For example, structuring the sale as an asset purchase might offer tax benefits compared to a stock purchase.   Lastly, there might be an earn-out agreement, where the final sale price is partly contingent on the hotel's future performance. This can be attractive to you as a buyer if you believe you can enhance the hotel's profitability, and it offers the seller assurance of additional future payment based on the business's success under new ownership.   In summary, the Deal Structure is a critical aspect of business transactions, requiring careful consideration and negotiation to address the specific needs and risks of both the buyer and the seller. Due DiligenceDue Diligence refers to the comprehensive appraisal undertaken by a prospective buyer to understand and evaluate a business's assets, liabilities, commercial potential, and risks before finalising the purchase. This process involves scrutinising financial records, legal documents, operational processes, and other critical aspects of the business to ensure there are no hidden issues or surprises.   Example: Suppose you're interested in acquiring a small manufacturing company in Brisbane. As part of your Due Diligence, you would examine several facets of the business. This includes analysing financial statements to assess profitability, reviewing client contracts to understand revenue stability, and evaluating employee records to gauge workforce stability and potential liabilities.   Additionally, you would investigate the condition of manufacturing equipment, check for compliance with health and safety regulations, and review any existing legal disputes or pending litigations. Environmental assessments might also be pertinent, especially to understand any potential liabilities due to the manufacturing processes used by the company.   As a seller, you would prepare for this process by organising your financial records, legal documents, and operational details, ensuring they are accurate and up-to-date. This preparation can help expedite the Due Diligence process and build trust with potential buyers.   Due Diligence is a critical stage in the process of buying a business in Australia, as it allows the buyer to make an informed decision and negotiate the terms of purchase more effectively. It also helps in identifying areas that might require post-acquisition attention or investment. Earn Out An Earn Out is a contractual provision in the sale of a business where the final sale price includes a variable component based on the future performance of the business. This mechanism is used to bridge the gap between the seller's expected valuation and the buyer's offer, based on the business's actual performance post-sale. The Earn Out is contingent on the business achieving certain financial goals or milestones within a specified period.   Example: Imagine you are negotiating to buy a boutique digital marketing agency in Sydney. The agency has shown potential, but its future revenue projections are uncertain. As a buyer, you propose an Earn Out arrangement to mitigate the risk. According to this arrangement, you agree to pay an initial sum upfront, followed by additional payments over the next few years, contingent on the agency meeting specific revenue or profit targets.   For the seller, this arrangement can be appealing as it offers the potential to receive a higher total sale price than the initial offer, provided the business performs well after the sale. It also demonstrates your confidence in the future success of the business.   On the other hand, as the buyer, the Earn Out allows you to tie a portion of the purchase price to the actual performance of the business, reducing the initial capital outlay and aligning the final price more closely with the business's true value under your management.   In summary, an Earn Out is a valuable tool in business transactions in Australia, offering a flexible approach to valuation and payment that can benefit both buyers and sellers in scenarios where future business performance is a key factor. EBITDA EBITDA, an acronym for Earnings Before Interest, Taxes, Depreciation, and Amortisation, is a financial metric used to evaluate a company's operating performance. It measures a business's profitability by focusing on earnings derived from day-to-day activities, disregarding the effects of non-operational factors like tax strategies and investment in assets.   Example: Suppose you're considering the purchase of a boutique hotel chain in Queensland. During your financial assessment, you would encounter the term EBITDA in the hotel's financial statements. This figure represents the income the hotel chain generates from its regular operations, such as room bookings and event hosting, excluding expenses not directly tied to these core activities, like interest payments on loans, tax expenses, and the gradual reduction in value of the hotel's assets over time.   As a potential buyer, EBITDA gives you a clearer picture of the hotel chain's operational strength, allowing you to make a more informed decision about the value and potential of the business. For the seller, showcasing a strong EBITDA can be advantageous, as it highlights the profitability of the business's core operations, making it an attractive investment opportunity.   In summary, EBITDA is a crucial indicator for both buyers and sellers in Australia, providing a focused perspective on the financial health and operational efficiency of a business, free from the distortions of accounting and financial obligations. +Equipment eg $500k +EquipmentWhen a business sale listing states "price plus equipment," it indicates that the cost of the business includes the sale price, plus an additional amount for the equipment used in the business.  This means the buyer is expected to pay for the business itself at the listed price, and on top of that, pay an additional amount for the equipment necessary to operate the business.   Example: Let's say you find a listing for a bakery with the sale listed as "$150,000 price plus equipment." In this scenario, the $150,000 is the price for the bakery business, including aspects like its brand, customer base, and location (leasehold rights, if applicable). The term "plus equipment" means that in addition to the $150,000, you will also need to pay extra for the bakery's equipment – such as ovens, mixers, display cases, and utensils.   The exact cost of the equipment is usually determined by either a pre-agreed amount or a valuation of the equipment at the time of sale. This setup allows the buyer to understand the total financial commitment required, which includes both the business purchase and the necessary operational tools. It's essential for buyers to clarify what specific equipment is included and its condition to assess the total value accurately. EOI (Expression of Interest)This term is used in the context of business sales to invite potential buyers to express their interest in purchasing the business.  It is often the initial step in the selling process, particularly for businesses where the value is not straightforward or the seller expects high demand.   Example: Imagine a unique boutique hotel is up for sale, and the listing says "EOI." This means that the seller is inviting potential buyers to submit an expression of interest.  By doing so, you're not committing to purchase the business, but you're indicating your serious interest in it. The process usually involves submitting some basic information about yourself or your company, and possibly an indicative offer or a range of what you're willing to pay.   Following the EOI phase, the seller or their agent may invite selected interested parties to participate in further discussions, negotiations, or a formal bidding process.  The EOI process helps the seller gauge the level of interest and the profiles of potential buyers, which can be particularly useful for high-value or unique businesses where the best buyer might not be the one offering the highest price, but rather the one with the right fit or vision for the business.   Fixtures and FittingsWhen a business for sale is listed as "price plus fixtures and fittings," it means that the asking price for the business includes the cost of the business entity itself plus an additional cost for all the fixtures and fittings. Fixtures and fittings refer to items that are installed or fitted in the business premises, such as lighting, shelving, plumbing, and sometimes equipment that is permanently attached to the building.   Example: Consider a listing for a restaurant that states the sale as "$250,000 price plus fixtures and fittings." Here, $250,000 is the price set for the restaurant business itself, including aspects like its brand, customer base, and leasehold rights. The term "plus fixtures and fittings" means you, as the buyer, will also need to pay extra for all the installed elements and permanent equipment within the restaurant. This could include the kitchen fixtures, bar counters, seating booths, lighting fixtures, and any built-in sound system.   The cost of these fixtures and fittings is typically determined by a valuation or an agreed-upon amount between the seller and the buyer. This setup is important for buyers to understand as it clarifies the total investment required to take over the business, ensuring operational continuity without additional major investments in the infrastructure of the business premises. It's crucial for buyers to get a detailed list of all fixtures and fittings included in the sale, along with their condition, to make an informed decision. FreeholdFreehold in the context of buying a business refers to the ownership of both the business and the property on which it operates. This means that the buyer is purchasing not just the business itself but also the land and buildings associated with it. The buyer has full control and ownership of the property without the need to pay ground rent or lease fees.   Example: Suppose you are interested in buying a restaurant in Australia that is advertised as a "freehold" sale. This means you are not just buying the restaurant business, including its brand, recipes, and customer base, but also the building where the restaurant is located and the land on which it stands. As a freehold owner, you have the freedom to make modifications to the property, subject to local planning laws, and you don't have to worry about the terms and conditions of a lease or the risk of lease expiry.   This type of ownership is particularly attractive to business buyers who want complete autonomy and control over their property, as it eliminates concerns related to landlords, lease negotiations, and rent increases. However, freehold purchases usually require a higher initial investment than leasing a property. GST (Goods and Services Tax)The sale of a business is generally treated as a supply of a going concern and can be GST-free if certain conditions are met. To qualify as a GST-free sale of a going concern:   Both the seller and the buyer must be registered for GST. The sale must include everything necessary for the continued operation of the business. The seller and the buyer must agree in writing that the sale is of a going concern. If these conditions are met, then GST is not added to the sale price of the business. This means the price negotiated between the buyer and the seller is the total price without the addition of GST.   It's important to note that specific situations can vary, and there may be exceptions or particular circumstances where GST might apply. Therefore, it's advisable for both parties involved in the sale of a business to consult with a tax professional or accountant to understand the specific tax implications and ensure compliance with Australian Taxation Office (ATO) regulations.   Horizontal vs. Vertical AcquisitionHorizontal and Vertical Acquisitions are two different strategies used when one company buys another.   Horizontal Acquisition: This happens when a business buys another company that operates in the same industry and often at the same stage of production. The goal here is usually to increase market share, reduce competition, or achieve economies of scale.   Example: Imagine you own a chain of coffee shops in Melbourne. If you buy out another chain of coffee shops in the same city, that's a Horizontal Acquisition. By doing this, you're reducing your competition and potentially increasing your customer base and market presence.   Vertical Acquisition: This involves buying a business that operates in the same industry but at a different stage of the production process. The aim here is often to control more of the supply chain, reduce costs, or secure access to key resources or distribution channels.   Example: Let's say you own a winery in the Hunter Valley. If you buy a company that supplies wine bottles or a distribution company that specialises in delivering wine, that's a Vertical Acquisition. This can give you more control over your supply chain, from production to distribution, potentially reducing costs and improving efficiency.   In summary, Horizontal and Vertical Acquisitions in Australia represent two strategic approaches in business expansions – Horizontal focusing on acquiring similar companies in the same industry, and Vertical aiming to control more stages of the industry's supply chain. The choice between these strategies depends on the acquiring company's objectives, resources, and the specific dynamics of its industry. Information MemorandumAn Information Memorandum (IM) is a comprehensive document provided by the seller of a business, typically through their broker or advisor, to potential buyers. This document contains detailed information about the business that's for sale. It's designed to give you, as a potential buyer, a clear and in-depth understanding of the business, its operations, financials, market position, and potential.   Example: Imagine you're interested in buying a café. After expressing your interest, you're given an Information Memorandum prepared by the seller. This IM would include details such as the café's history, its location, financial performance over the past few years (including profit and loss statements, balance sheets, and cash flow statements), details about its customer base, information on employees, any unique selling points, and details about the café's suppliers and lease agreements.   The IM might also cover the café's market position, competition, growth opportunities, and any risks or challenges it faces. Essentially, it's a dossier that aims to answer most of the questions you might have about the business, helping you make an informed decision about whether or not to proceed with a purchase.   As a buyer, you should review the Information Memorandum carefully. It's a key resource in your due diligence process, providing the detailed information you need to assess the viability and potential of the business. However, it's also important to verify the information provided in the IM independently, as it is prepared by the seller and may present the business in the most favourable light. LeaseholdWhen buying a business, Leasehold refers to purchasing the business itself, but not the property it operates from. Instead, the property is leased from the owner (the landlord). This means the buyer gains control over the business operations, assets, and customer base, but they pay rent to occupy the space where the business is located.   Example: Imagine you're interested in buying a café that is listed as a leasehold business. In this case, you would be buying the café business, including its equipment, branding, and perhaps inventory and staff contracts. However, the building where the café is located remains the property of the landlord. As the new business owner, you would take over the lease agreement and continue paying rent according to the lease terms.   This kind of arrangement is common in retail, hospitality, and other sectors where location is key. It allows you to own and run a business without the larger upfront capital requirement of purchasing property. However, it also means you have to abide by the terms of the lease and are subject to rent reviews and other conditions set by the landlord. Leasehold businesses can be attractive due to their lower initial investment compared to freehold purchases.   Mergers vs. Acquisitions (M&A)Mergers and Acquisitions (M&A) are two fundamental types of corporate strategies used for combining companies or assets, typically to expand a company's reach or enhance its competitiveness. 1. Merger: This is when two companies, often of similar size, agree to go forward as a single new company instead of remaining separately owned and operated. This is a mutual decision and often seen as a strategy for growth, diversification, or increasing market share. Example: Imagine two Australian telecommunications companies of roughly equal size decide to merge. They combine their resources, customer bases, and operations to form a new entity. The goal might be to create a stronger competitive force in the market, expand their network coverage, or combine technological capabilities.   2. Acquisition: This occurs when one company takes over another and becomes the new owner. This can be a friendly takeover (agreed upon by both companies) or hostile (where the target company doesn't want to be purchased). Unlike mergers, acquisitions usually involve companies of different sizes. Example: Consider a large Australian retail corporation deciding to acquire a smaller, specialty online store. The larger company buys the majority of the smaller company's shares, effectively taking control. This could be a strategy to expand into new product lines or leverage the online store's unique brand and customer base.   Non-Compete AgreementA Non-Compete Agreement is a legal contract where one party, usually the seller of a business, agrees not to start a new, competing business within a specific area and for a certain period after the sale. This is to ensure that the seller does not use their knowledge or contacts to take away customers from the business they just sold.   Example: Suppose you're buying a boutique fitness centre in Brisbane. As part of the sale, you might ask the seller to sign a Non-Compete Agreement. This agreement could state that the seller will not open another fitness centre within a 20-kilometre radius of the one you're buying for the next five years.   This agreement is beneficial for you as a buyer because it protects your investment. It ensures that the seller, who likely has a good understanding of the business and its clientele, doesn't set up a competing business nearby, which could negatively impact your new venture.   For the seller, agreeing to a non-compete clause might be a necessary step to close the deal, although it limits their future business endeavours in that particular industry or area for the duration of the agreement.   In summary, Non-Compete Agreements in Australia are crucial in business sales to protect the buyer’s investment and to prevent the seller from starting a direct competition immediately after the sale.   Non-Disclosure Agreement (NDA)A Non-Disclosure Agreement (NDA) is a legal contract where parties agree to keep certain information confidential. This is especially relevant in business transactions, where sensitive information is often shared between the buyer and seller. An NDA ensures that the confidential details do not become public or used for other purposes. Example: Imagine you’re interested in buying a software development company in Sydney. Before the owners share any proprietary code, client lists, or financial details, they ask you to sign an NDA. By doing this, you agree not to use or disclose the information for any purpose other than evaluating the potential acquisition.   Difference Between an NDA and Confidentiality Agreement: While NDAs and Confidentiality Agreements are often used interchangeably in business contexts, there can be subtle differences:   Non-Disclosure Agreement (NDA): Typically used in situations where specific information is shared between parties, with an emphasis on the non-disclosure aspect. It's often more focused on protecting information that's disclosed during negotiations. Confidentiality Agreement: Generally broader in scope, covering non-disclosure, non-use, and sometimes non-competition aspects. It's used to protect sensitive information in a wider range of scenarios, not limited to a specific negotiation or transaction. In a business buying context in Australia, either term could be used, but the core purpose remains the same – to protect sensitive business information during and after the negotiations.   ONO (Or Nearest Offer)This term is often used in the sale of a business to indicate that the seller is open to considering offers that are close to the listed price, but not necessarily exactly at that price. It suggests a degree of flexibility in the sale price and invites potential buyers to negotiate.   Example: Let's say there's a café for sale listed at $150,000 ONO. This means that while the seller is asking for $150,000, they are open to considering offers that are close to this amount. If you are interested in buying this café, you could make an offer slightly lower than $150,000, say $145,000, knowing that the seller is open to negotiation and may accept an offer that is not exactly at the asking price but is reasonably close to it.   The use of ONO in a business sale indicates a willingness on the part of the seller to engage in negotiations and shows that there is some room for discussion regarding the final sale price. PE Firm (Private Equity Firm)PE (Private Equity) Firm is an investment management company that provides financial capital to businesses, typically through investments or buyouts. PE Firms invest in various kinds of businesses, from startups to established companies, with the goal of improving or growing the business and eventually selling their stake for a profit.   Example: Suppose you're the owner of a mid-sized technology company in Melbourne that's showing potential for growth but needs capital to expand. A PE Firm might approach you to buy a significant stake in your company. Their investment could be used to fund new product development, expand into new markets, or streamline operations.   For you as a business owner, partnering with a PE Firm can provide not only capital but also expertise and industry connections. It might mean giving up some control, as PE Firms typically play an active role in business decisions, aiming to increase the value of their investment.   On the other hand, if you're looking to buy a business, you might encounter a PE Firm as the seller. They may have acquired the business previously, improved its operations or profitability, and are now looking to sell their stake to realise a return on their investment.   In summary, PE Firms in Australia play a significant role in the business landscape, providing funding and expertise to companies with growth potential and buying and selling businesses as part of their investment strategies. Plant eg $500k +PlantWhen a business for sale is listed with "price plus plant," it means that the asking price for the business includes the cost of the business entity itself, plus an additional amount for the plant and equipment. The term "plant" in this context typically refers to the physical assets or machinery necessary for the operation of the business, such as manufacturing equipment, tools, or vehicles.   Example: Suppose you come across a listing for a manufacturing business with the sale advertised as "$300,000 price plus plant." This means that the $300,000 covers the cost of purchasing the business entity, including aspects such as the brand, customer base, and possibly the leasehold rights or real estate. The "plus plant" part indicates that in addition to the $300,000, you will also need to pay extra for the manufacturing equipment, machinery, and any other physical assets used in the business operations.   This additional cost for the plant is typically negotiated between the buyer and seller, and it may be based on the current market value or the depreciated value of the equipment. Including the plant in the sale can be advantageous for the buyer, as it allows for a seamless transition and immediate operational capability. However, it's crucial for the buyer to assess the condition and suitability of the plant to ensure it meets their operational needs and that they are paying a fair price for these assets. POA (Price on Application)"POA" stands for "Price on Application."  This term is used in business listings and advertisements to indicate that the seller has chosen not to publicly disclose the asking price of the business.  Instead, interested buyers are invited to contact the seller or the broker to enquire about the price.   Example: Imagine you come across a listing for a café for sale with the price listed as "POA." This means that the seller is not publicly stating how much they are asking for the café. To find out the price, you would need to directly contact the seller or the real estate agent handling the sale. They might provide the price upon request, or they might first ask for some information from you, such as your budget or interest level, before disclosing the price.   The use of "POA" can be a strategy to attract serious buyers, to create a sense of exclusivity, or to allow for price flexibility in negotiations. It can also be used in situations where the value of the business is not easily determined and may require discussions or negotiations to arrive at a fair price. SAV (Stock At Value)When buying a business, the term "+ SAV" stands for "plus Stock at Value."  You might see this in business sale listings and it indicates that the purchase price of the business is in addition to the cost of the inventory or stock the business currently holds, valued at its purchase or manufacturing cost.   Example: Suppose you are buying a retail clothing store. The business might be listed for sale at $200,000 + SAV. This means you pay $200,000 for the business itself, and in addition, you pay for the stock the business currently has. If the stock (clothing, accessories, etc.) is valued at $50,000 at its cost price, your total payment would be $200,000 (for the business) + $50,000 (for the stock), totaling $250,000.   This term is significant because the value of the stock can vary significantly based on the type and size of the business, and it represents an additional cost that the buyer needs to consider when purchasing the business. MultipleMultiple refers to a financial metric used to estimate the value of a business. It is a ratio that compares the business's selling price to a specific financial metric, typically earnings or revenue. This ratio helps in determining how much a buyer is willing to pay for a business based on its financial performance.   Example: Imagine you are interested in purchasing a café in Adelaide. The café's annual earnings are reported to be $200,000. If businesses in the café industry are typically sold for a multiple of 3 times their annual earnings, then the estimated value of the café would be around $600,000 (3 times $200,000).   As a buyer, understanding and using multiples helps you to gauge whether a business is reasonably priced in comparison to its earnings or revenue. It's a tool for comparing different businesses and making an informed decision about the investment value.   For a seller, knowing the typical multiple for their industry can guide them in setting a competitive and realistic asking price for their business.   In summary, "Multiple" in the Australian business buying context is a key valuation tool, providing a benchmark for both buyers and sellers to assess and negotiate the financial worth of a business. SDE (Seller’s Discretionary Earnings)Seller's Discretionary Earnings (SDE) is a financial metric used to determine the true earning potential of a small to medium-sized business. SDE adjusts the business's net profit by adding back expenses that are unique to the current owner, such as the owner’s salary, benefits, and any personal expenses passed through the business. This provides a clearer picture of the business's potential profitability under new ownership.   Example: Let's say you're interested in buying a small boutique in Melbourne. The financial statements show a net profit of $120,000. However, the current owner also takes a salary of $80,000, which is included in the business expenses. Additionally, there are some personal expenses like a car lease and travel, totalling $20,000 per year, that are also run through the business.   To calculate the SDE, you would start with the net profit of $120,000, then add back the owner's salary and personal expenses. This gives an SDE of $220,000 ($120,000 + $80,000 + $20,000).   For you as a buyer, SDE is a useful tool to understand the actual financial benefit you could derive from the business, as it shows the earnings before the impact of the current owner's personal financial choices.   For the seller, presenting the SDE figure can make the business more attractive to potential buyers by highlighting its earning potential after adjusting for expenses that are specific to the current owner.   In summary, SDE is a crucial concept in the valuation of small and medium-sized businesses in Australia, offering a more accurate reflection of a business's earning potential by accounting for the current owner's discretionary expenses.Stock IncludedWhen a business for sale is listed with "stock included," it means that the inventory of the business is included in the sale price. This term is often used in retail, wholesale, or manufacturing business sales where the inventory, or stock, is a significant part of the business operations.   Example: Imagine you find a listing for a retail clothing store that states, "Sale Price: $200,000, stock included." This indicates that for the price of $200,000, you are purchasing not only the business itself – which may include the store's brand, customer base, and leasehold rights – but also the store's current inventory. This inventory could consist of all the clothing items, accessories, and any other goods available for sale in the store.   The inclusion of stock in the sale price can be a substantial benefit for the buyer, as it means there is no need to make an additional investment to acquire inventory immediately after taking over the business. The store can continue to operate and generate revenue without interruption. However, it's important for the buyer to assess the value and quality of the stock included to ensure it aligns with the market demand and their business strategy. Strategic BuyerA Strategic Buyer is an individual or company that acquires another business for reasons beyond just financial returns. These buyers are often in the same or a related industry and are looking to acquire a business to achieve strategic objectives such as gaining market share, accessing new markets, enhancing product lines, or achieving synergies.   Example: Imagine you own a software company in Sydney that specialises in educational technology. A large publishing company that produces educational materials but lacks a strong digital platform might be interested in acquiring your business. This publishing company would be considered a Strategic Buyer because, through the acquisition, it can expand its digital offerings, leveraging your technology to enhance its existing product lines and enter new markets.   For you, as the seller, selling to a Strategic Buyer can be advantageous because they may be willing to pay a premium for your business due to the strategic benefits it offers them.   For the buyer, this acquisition is not just a financial investment but a strategic move to strengthen their market position, diversify their product offerings, or gain a competitive edge.   In summary, a Strategic Buyer in the Australian busin ess context is one who looks at the broader, strategic implications of acquiring a business, focusing on long-term growth, market positioning, and synergy rather than just immediate financial gains.   WIWO (Walk In, Walk Out)This term is used to describe a situation where the sale of a business includes everything needed to continue operating the business as it currently stands.    It typically means that the buyer can start running the business immediately without needing to make additional purchases or major changes.   Example: Suppose you are interested in purchasing a small bakery that is advertised as a "WIWO" sale. This means that the purchase price includes not just the physical location and the brand, but also all the equipment, inventory, and often the existing staff and operational systems. So, when you buy the bakery, you get the ovens, mixers, display cases, recipes, current stock of ingredients, and potentially the staff who are already trained and working there.   The advantage of a WIWO sale is that it offers a turnkey solution for the buyer, allowing them to step in and run the business without significant downtime or additional investment in setting it up. This type of sale is particularly attractive to buyers who want a seamless transition and immediate operational capability.

Figuring out the value of a business is a bit like trying to solve a puzzle—it's a blend of creativity and logic. It's not quite as straightforward as, say, appraising a house. There are so many more variables and considerations. But hey, don't worry! I want to share my method with you, a quick way to estimate a business's worth, especially when it's generating revenue in the sweet spot between $500K and $5M. First things first, you'll need to do a bit of homework. Here are the initial pieces of information you need to collect: Last full 3 years of Profit and Loss Statements Current Balance Sheet Details on Lease or the Real Estate if owned What does owner pay themselves and what do they do? Any other family members employed? List of Discretionary Expenses (expenses that are optional, or beneficial to current owner) Major Equipment List with Market Values Unusual Events Last 3 years? Any lawsuits? Gov handouts? Insurance Claims? Major Equipment bought/sold?   Before you dig in, ask yourself 4 common sense questions: Do I understand how this business works? Does this business work without the owner? Is there ONE customer or supplier that this business is completely at the mercy of What exactly is a buyer buying here? It's time to do an SDE-based, Income Approach to Value, which is really just 3 big parts. Determining SDE the last 3 Years Deciding how to Weight the last 3 Years' SDE Choosing an Appropriate Multiple to Multiply SDE to Reach our Value   What is SDE exactly? It stands for Sellers Discretionary Expenses and it's the theoretical "Earnings Power" of the business or the total "Owner Benefit". It's the "Earnings Firehose" you theoretically should have available to service acquisition debt, pay yourself or a GM to run it, reinvest for growth, or take home in profit. If you owned this company, debt free, and worked in it full time (paying yourself $0) paying only necessary expenses, the SDE is what you'd make in profit. It's the maximum earnings possible on a normal year in the company's current condition. Now let's find it. Addbacks: Owner's Family Member's Salary and Payroll Taxes Owners Benefits & Perks (healthcare plan for owner and family, cell phone bill, life insurance, owner's vehicle, anything that is paid out to owner and their family that will go away with the sale) Rent if Owner-Occupied Real Estate (will subtract a fair market rent later) One-Time Expenses that don't apply to a Buyer (cost of an expansion or remodel, a one-time consultant, a big one time abnormal bad debt, a lawsuit settlement, etc)   Don't forget the EBITDA addbacks too: Interest Expense (Buyer will buy debt free) Taxes (INCOME TAXES ONLY, Buyer responsible for their own tax bill and strategy) Depreciation & Amortization (phantom expenses Seller isn't writing actual checks for)   Now let's do some Negative Adjustments, the opposite of addbacks:   Market wages to replace Seller's family members (family members working for company are usually overpaid or underpaid) Any "other income" that's not the core business stuff, like interest income, selling assets, gov handouts eg Covid JobKeeper payments Fair Market Rent if Owner-Occupied - The coming Rent increase if leased and you know LL will raise One-time anomalies, windfalls of revenue not applicable to a Buyer - Deferred Maintenance (any stuff that should have already been fixed that the owner neglected) Capex if it's an Equipment Heavy Business w/trucks or machines that need periodic replacement (specifically Maintenance Capex, or a budget to replace major equip necessary for current sales level. Subtracts some of Depreciation addback.)   Alright, you've crunched the numbers and found your Seller's Discretionary Earnings (SDE)! It's time to repeat the process for the past two years' Profit & Loss (P&L) statements.   Lay them out together, and let's find a story in those numbers. After all, trends can really talk.   Chances are, you've ended up with three different SDE figures for each of the last three P&Ls. But to get the real value, you need just ONE SDE number, so let's try weighting.   Take a look at your SDE trends. If it's been growing consistently and you think that'll continue, then go ahead and pick your most recent and highest SDE figure. It's a winner!   On the other hand, if your SDE is more like a roller coaster, you'll need to get creative. Here's where your intuition steps in.   You might average the last three years, or maybe discount one year that's an outlier and average the other two. Trust your gut!   Now, if the trend is going downhill, that's a different ball game. You might have to lower your SDE substantially. Keep in mind, lenders and appraisers aren't going to expect your SDE to grow.   But if it's declining, they will definitely penalise you. In such a scenario, ask yourself: would anyone want to buy a business that's not growing, and why?   Once you've figured out your weighted SDE, it's time to multiply it by a certain figure. Here are some standard multiples to keep in mind:   Less than 100K SDE? Most likely 2x or less, or might not even sell. 100K-500K SDE? Expect 2x - 3.5x. 500K-1M SDE? You're looking at 3x - 4.5x. Over 1M SDE? You're in a whole new league!   But how do you choose a multiple within these wide ranges? Time to dig into industry-specific information and look at the unique qualities of your business.   Business reference guides and databases can offer industry-specific rules of thumb to find a median multiple. While some may simply choose the median multiple, you can do better than that.    Suppose your range is 2.2x -3.7x with a median of 2.9X. Look at your business in relation to the industry. Do you have higher margins? More stable income? Superior systems, technology, reputation? Then, boost your position on the scale. If it's underperforming compared to industry standards, slide it down.   Once you've made your pick, your business value = Weighted SDE x Your Chosen Multiple.   But hang on, we're not done yet. You've got to view it from a potential buyer's perspective too. Think about the most likely buyer for your business. Can they afford to buy it, make a decent living, service any debt, and still have a 25% cushion?   If not, your valuation might be a little off. Always ensure your valuation still makes sense for your potential buyers. Happy valuing!    

Taking your business online can have its benefits, but it can also increase the risk of scams and security threats. Follow our steps to help protect your business from cyber threats. A single cyber-attack could seriously damage your business and its reputation. 1. Back up your data Backing up your business’s data and website will help you recover any information you lose if you experience a cyber incident or have computer issues. It’s essential that you back up your most important data and information regularly. Fortunately, backing up doesn’t generally cost much and is easy to do. It’s a good idea to use multiple back-up methods to help ensure the safety of your important files. A good back up system typically includes: daily incremental back-ups to a portable device and/or cloud storage end-of-week server back-ups quarterly server back-ups yearly server back-ups Regularly check and test that you can restore your data from your back up. Make it a habit to back up your data to an external drive or portable device like a USB stick. Store portable devices separately offsite, which will give your business a plan b if the office site is robbed or damaged. Do not leave the devices connected to the computer as they can be infected by a cyber-attack. Alternatively, you can also back up your data through a cloud storage solution. An ideal solution will use encryption when transferring and storing your data, and provides multi-factor authentication for access. 2. Secure your devices and network Make sure you update your software Ensure you program your operating system and security software to update automatically. Updates may contain important security upgrades for recent viruses and attacks. Most updates allow you to schedule these updates after business hours, or another more convenient time. Updates fix serious security flaws, so it is important to never ignore update prompts. Install security software Install security software on your business computers and devices to help prevent infection. Make sure the software includes anti-virus, anti-spyware and anti-spam filters. Malware or viruses can infect your computers, laptops and mobile devices. Set up a firewall A firewall is a piece of software or hardware that sits between your computer and the internet. It acts as the gatekeeper for all incoming and outgoing traffic. Setting up a firewall will protect your business’s internal networks, but do need to be regularly patched in order to do their job. Remember to install the firewall on all your portable business devices. Turn on your spam filters Use spam filters to reduce the amount of spam and phishing emails that your business receives. Spam and phishing emails can be used to infect your computer with viruses or malware or steal your confidential information. If you receive spam or phishing emails, the best thing to do is delete them. Applying a spam filter will help reduce the chance of you or your employees opening a spam or dishonest email by accident. 3. Encrypt important information Make sure you turn on your network encryption and encrypt data when stored or sent online. Encryption converts your data into a secret code before you send it over the internet. This reduces the risk of theft, destruction or tampering. You can turn on network encryption through your router settings or by installing a virtual private network (VPN) solution on your device when using a public network. 4. Ensure you use multi-factor authentication (MFA) Multi-factor authentication (MFA) is a verification security process that requires you to provide two or more proofs of your identity before you can access your account. For example, a system will require a password and a code sent to your mobile device before access is granted. Multi-factor authentication adds an additional layer of security to make it harder for attackers to gain access to your device or online accounts. 5. Manage passphrases Use passphrases instead of passwords to protect access to your devices and networks that hold important business information. Passphrases are passwords that is a phrase, or a collection of different words. They are simple for humans to remember but difficult for machines to crack. A secure passphrase should be: long - aim for passphrases that are at least 14 characters long, or four or more random words put together complex - include capital letters, lowercase letters, numbers and special characters in your passphrase unpredictable - while a sentence can make a good passphrase, having a group of unrelated words will make a stronger passphrase unique - don't reuse the same passphrase for all of your accounts If you use the same passphrase for everything and someone gets hold of it, all your accounts could be at risk. Consider using a password manager that securely stores and creates passphrases for you. Administrative privileges To avoid a cybercriminal gaining access to your computer or network: change all default passwords to new passphrases that can’t be easily guessed restrict use of accounts with administrative privileges restrict access to accounts with administrative privileges look at disabling administrative access entirely Administrative privileges allow someone to undertake higher or more sensitive tasks than normal, such as installing programs or creating other accounts. These will be very different from standard privileges or guest user privileges. Criminals will often seek these privileges to give them greater access and control of your business. To reduce this risk, create a standard user account with a strong passphrase you can use on a daily basis. Only use accounts with administrative privileges when necessary, limit those who have access, and never read emails or use the internet when using an account with administrative privileges. Learn more about restricting administrative privileges. 6. Monitor use of computer equipment and systems Keep a record of all the computer equipment and software that your business uses. Make sure they are secure to prevent forbidden access. Remind your employees to be careful about: where and how they keep their devices the networks they connect their devices to, such as public Wi-Fi using USB sticks or portable hard drives - unknown viruses and other threats could be accidentally transferred on them from home to your business. Remove any software or equipment that you no longer need, making sure that there isn’t any sensitive information on them when thrown out. If older and unused software or equipment remain part of your business network, it is unlikely they will be updated and may be a backdoor targeted by criminals to attack your business. Unauthorised access to systems by past employees is a common security issue for businesses. Immediately remove access from people who don’t work for you anymore or if they change roles and no longer require access. 7. Put policies in place to guide your staff A cyber security policy helps your staff to understand their responsibilities and what is acceptable when they use or share: data computers and devices emails internet sites 8. Train your staff to be safe online Your staff can be the first and last line of defence against cyber threats. It’s important to make sure your staff know about the threats they can face and the role they play in keeping your business safe. Educate them about: maintaining good passwords and passphrases how to identify and avoid cyber threats what to do when they encounter a cyber threat how to report a cyber threat. 9. Protect your customers It’s vital that you keep your customers information safe. If you lose or compromise their information it will damage your business reputation, and you could face legal consequences. Make sure your business: invests in and provides a secure online environment for transactions secures any personal customer information that it stores If you take payments online, find out what your payment gateway provider can do to prevent online payment fraud. There are laws about what you can do with any personal information you collect from your customers. Be aware of the Australian Privacy Principles (APPs) and have a clear, up-to-date privacy policy. If your business is online, it’s a good idea to display your privacy policy on your website. 10. Consider cyber security insurance  Consider cyber insurance to protect your business. The cost of dealing with a cyber-attack can be much more than just repairing databases, strengthening security or replacing laptops. Cyber liability insurance cover can help your business with the costs of recovering from an attack. Like all insurance policies, it is very important your business understands what it is covered for. 11. Get updates on the latest risks Keep up with the latest scams and security risks to your business. Sign up for the Australian Cyber Security Centre's (ACSC) Partnership Program for access to up-to-date information on cyber security issues and how to deal with them. 12. Get cyber security advice Australian Cyber Security Hotline If you want to talk to someone about cyber security, the ACSC has a 24/7 Cyber Security Hotline. The hotline provides over the phone support to both prepare for and respond to cyber incidents. Learn more on the ACSC website or call 1300 CYBER1. Help for small businesses Australian small businesses can access individual support to grow their digital capabilities through Australian Small Business Advisory Services (ASBAS). The program offers small businesses low cost, high quality advice on a range of digital solutions including online security. You can also find non-government IT service providers or cyber security professionals by doing an online search. Tips to help you choose the right adviser Before you engage an adviser, it's important to be prepared and understand what your business needs are. Follow these steps to help you choose the right cyber security adviser for your business: Identify your business needs and what you would like your adviser to help you with. Our Cyber Security Assessment Tool can help you figure out what your needs are and give you a list of recommendations. Match an adviser with your business needs. Service providers can vary in the range and focus of cyber security services they provide. Use your business needs to match you with a relevant adviser. Ask questions and do your research. Cyber security experts should be able to provide references and proof that they are certified to do the job. Make sure your adviser is easy to contact. A cyber attack can happen at any time of the day so it's important your cyber adviser can respond to a cyber incident after hours. Ensure they understand your business. Some industries have specific requirements and regulations. Check that your adviser understands how your business operates and are used to dealing with businesses similar to yours. Ask your adviser what their plan is if something goes wrong. Will they work with you to develop a joint plan to activate in the event that you suffer a cyber security attack? Do they have a proven track record of getting a business through a cyber security incident? For more information visit www.business.gov.au