10 Things to Check Before Buying a Business in Queensland

10 Things to Check Before Buying a Business in Queensland

Purchasing a business is a major investment, which makes due diligence essential. Before signing a contract, ensure you investigate the following key areas.

1. Financial Statements

Review at least three years of:

• Profit and Loss Statements
• Balance Sheets
• BAS Returns
• Tax Returns

Verify that reported earnings accurately reflect the business’s performance.

2. Lease Terms

Review:

• Remaining lease term
• Option periods
• Rent reviews
• Assignment clauses

A secure lease can significantly impact the value of a business.

3. Licences and Permits

Ensure all required licences and permits are current, transferable, and compliant with industry regulations.

4. Employee Obligations

Understand:

• Employment contracts
• Award requirements
• Leave accruals
• Long service leave obligations

5. Customer Concentration

Businesses heavily dependent on one or two customers may carry additional risk.

6. Online Reputation

Check:

• Google Reviews
• Facebook Reviews
• Industry review platforms

Reputation can have a significant impact on future earnings.

7. Supplier Agreements

Review supplier relationships and trading terms to ensure continuity after settlement.

8. Assets and Equipment

Determine:

• Asset condition
• Ownership status
• Finance encumbrances
• Replacement requirements

9. Growth Potential

Look for opportunities to:

• Expand product lines
• Increase marketing
• Improve systems
• Enter new markets

10. Industry Trends

Research whether the industry is growing, stable, or declining before investing.

Final Thoughts

A thorough review before purchase can save significant time, money, and stress later.

At Q1 Brokers, we guide buyers through every stage of the due diligence process.