As a business owner looking to sell, you may encounter claims from individuals who promise to sell your business to an overseas buyer for more than it’s worth. Despite recent actions taken against unscrupulous vendors by the ACCC, this myth about overseas buyers continues to persist.
However, it’s important to note that advertising your business overseas can be just as costly, if not more so, than advertising in Australia. Understanding the truth about overseas buyers can save you a lot of wasted money, whether you plan to sell now or in the future.
There are a few myths to dispel about overseas buyers. Firstly, many claim that they’re willing to pay up to three times the value of a business. However, if someone has enough money to pay three times a business’s value, it’s safe to assume that they’re financially savvy and would not make such a risky investment.
Secondly, some believe that the overseas market is filled with buyers for the Australian market. While there is a chance of selling to an overseas buyer, this is incredibly unlikely unless you’re a major international business. In fact, the number of overseas buyers is significantly smaller than the number of local buyers.
In a survey conducted by the Australian Institute of Business Brokers, only 2.6% of businesses were sold to overseas buyers or entities in the 2012 financial year. This demonstrates that only a tiny fraction of buyers come from overseas, and those that do are likely to be experienced business people who are picky about their investments.
In summary, be cautious of claims that promise to sell your business for more than it’s worth to overseas buyers. The reality is that only a minuscule number of businesses are sold to overseas buyers and those that typically have a solid business plan in place. It’s important to arm yourself with the facts about overseas buyers before engaging a business agent.
Have you ever been told by an agent that they can sell your business to an overseas buyer? OR have you actually sold your business to an overseas buyer? We’d like to hear from you!
To find out more about this topic or if have any questions about business sales make sure you give us a call on (02) 9817 3331 or submit a response or inquiry through the site. We look forward to talking to you.
Disclaimer: The information in this article is intended as information only and should not be taken as professional business advice.