West Australian Businesses
West Australian businesses and franchises are in strong buyer demand. The minerals and resources boom has created a growth environment for West Australian Businesses. The demand from China, Japan and Korea for our iron ore and other base minerals such as Nickel, Gold and Uranium has allowed West Australian businesses to enjoy a growth rate of between 3 and 5 per cent of state GDP for most of the past decade. This means that we have strong nett migration. Many of these migrants are business migrants who either buy a small medium enterprise or invest in even larger businesses.
The underpinning of normal demand for west australian businesses by these business migrants has resulted in a slight excess of demand over supply.The business migrants come from South Africa, Kenya, India, England, Ireland and of course from Australia's eastern states and also from New Zealand. There is also an emerging number of business migrants from China and Indonesia and Singapore/Malaysia seeking to buy a West Australian business.
If you are buying a west australian business or franchise and you are unsure about the price/value propositon of the business you are considering, what can you do? Well, your accountant can certainly verify the profitabilty and the accounts of the west australian business for you, but what price earnings multiple should be applied to this business?
You need a business valuer who has access to relevant comparative sales data . He can compare the west australian business you are looking at with sales of similar sized businesses or franchises, similarly profitable west australian businesses in the same market industry, the same market niche and at the same point of the business cycle.
Aproperly prepared business valuation report will be of great assistance when you present your business finance loan application to your banker.
Your West Australian business business valuer is Graham O'Hehir, managing Director of GMO, WA's largest business broking firm, and you can see a profile of Graham on the GMO website at www.buyabusiness.com.au.
Alternatively call Graham O'Hehir on 1300634588 and discuss the valuation of your West Australian Business with him. Graham is on bank valuation panels with NAB, St George and Westpac.