Buying a business is a major decision, and finding the right one requires careful planning, research, and due diligence. Here’s a structured approach to help you identify the right opportunity.

1. Define Your Goals & Criteria

Why do you want to buy a business?

  • To replace a job with business ownership
  • To expand an existing company (synergies, market share, etc.)
  • For investment purposes (buy, grow, and sell)

Key Criteria to Consider:

  • Industry & Sector – Do you want a business in a familiar industry or a new one?
  • Size & Revenue – What annual revenue and EBITDA range are you targeting?
  • Location – Local, national, or online business?
  • Level of Involvement – Hands-on management vs. passive investment?
  • Risk Tolerance – Established business vs. turnaround opportunity?

2. Search for Businesses

Where to Find Businesses for Sale?

  • Investment Banks/Business Brokers – Specialists in selling businesses.
  • Online Marketplaces – Websites like NZBizbuysell, Trade Me
  • Networking – Approach business owners directly, attend industry events, or use LinkedIn.
  • Franchises – Consider buying a franchise for an established brand with support.
  • Distressed Businesses – Liquidations or struggling businesses can offer good value if you have turnaround expertise.

3. Evaluate Potential Businesses

Key Factors to Assess:

  • Financial Performance – Review P&L, cash flow, and EBITDA trends.
  • Customer Base – Is revenue diversified or reliant on a few key clients?
  • Growth Potential – Can you scale the business? Are there untapped opportunities?
  • Competitive Landscape – How strong is the market position?
  • Owner Dependence – Can the business run without the current owner?
  • Legal & Compliance – Ensure no hidden liabilities or regulatory issues.

4. Conduct Due Diligence

Deep Dive into the Business:

  • Financial Due Diligence – Verify revenue, costs, and profitability.
  • Operational Due Diligence – Assess employees, suppliers, and processes.
  • Legal Due Diligence – Review contracts, leases, and any legal risks.
  • Market Due Diligence – Understand industry trends and risks.

✅ Engage Professionals – An M&A advisor, lawyer and accountant can help ensure you don’t miss critical details.

5. Negotiate & Structure the Deal

Common Deal Structures:

  • Asset Purchase – Buy specific business assets, leaving behind liabilities.
  • Share Purchase – Buy the company as a whole, including existing contracts and liabilities.
  • Seller Financing – Some sellers offer financing to bridge price gaps.
  • Earnouts – A portion of the price is paid later, based on future performance.

Key Negotiation Points:

  • Price & payment structure
  • Transition support from the seller
  • Non-compete agreement
  • Employee retention plans

6. Closing & Transition

✅ Final Steps Before Taking Over:

  • Finalize legal agreements and payments.
  • Inform employees, customers, and suppliers.
  • Implement transition plans (training, operational changes, etc.).
  • Start executing your growth strategy!

Final Thought

Finding the right business takes time, but with clear goals, proper due diligence, and the right advisors, you can secure a business that aligns with your vision and financial goals.