The decision to purchase an accommodation business is likely to be one of the most important decisions that anyone will make during their working life.
As with all important decisions, it's essential to follow the correct process and take advice from the right people. First and foremost, speak to a good broker.
We know this sounds biased, but it generally is the best starting point. A good broker won't be looking to sell you something on the first phone call. On the contrary, it's our job to ask detailed questions and to get a feel for what your requirements are.
If you're completely new to the accommodation sector, it's a good idea to do some initial homework. At ResortBrokers, our brokers are always happy to meet up for an introductory chat in order to provide a sound overview of the industry.
ResortBrokers has produced a series on highly informative, in-house guides that provide an excellent background on the sectors in which we operate, including caravan/cabin parks and management rights finance. These can be emailed or posted on request.
We also run a number of introductory seminars in various location across Australia — keep an eye on our website for the next one.
As you start to get a feel for the industry in general, think about what sort of business best suits your skills, lifestyle and financial requirements. After all, every business is unique and each will suit a different person. It's critical to ask yourself the tough questions and to set your priorities.
Are you looking for a lifestyle business that gives you an income and plenty of free time, or do you want to work really hard, grow your business and achieve some capital gain? Are you willing to go anywhere for the right opportunity, or do you have to be near your kids' school?
Learn to look at every business objectively. Consider where opportunities to grow the business might lie. Identify possible risks that could jeopardise the property's ongoing success, and work out how you might deal with them.
What are your strengths? If you can find a business that you feel you can improve by bringing fresh ideas and skills, this represents a great opportunity to be successful.
WHAT DO INDUSTRY PROFESSIONALS THINK?
As well as speaking to an experienced accommodation business and management rights broker, it's worthwhile speaking with other industry professionals at an early stage. In particular, a conversation with a specialist finance broker or banker is a great starting point. Knowing what you're able to spend and what debt you'll be able to service is key. In reality, people often have more purchasing power than they initially thought.
Speaking with a specialist accountant and specialist solicitor is also advisable. An accountant is able to provide advice regarding the best ways of buying businesses. Setting up trusts and/or public limited companies often has distinct tax advantages. A solicitor can provide useful advice as to the process of purchasing an accommodation business, so you know what to expect when you find the right one.
In summary, when it comes to purchasing an accommodation business…take your time, do your homework and trust in the right people. It's much better to take a year to find the perfect business than to take a month to find something 'that will do'.
Whatever your situation, ResortBrokers is here to help you from start to finish. We pride ourselves on our ability to match the right people with the right property. Contact us for expert advice on preparing to buy an accommodation business.