Selling a Business to Overseas Buyers and do they pay more?

This is a question that we are often asked by perspective sellers and is probably one of the greatest myths around.

While there are a number of immigrants looking for their perfect business opportunity, in our experience they move to the area they want to live in first, and look for their business second.

If someone wants to come to Australia and purchase a business, there is a three phase process involved. The first step comprises of a provisional visa which allows a person and their family to move to Australia for a 4 year period to start or purchase a business. After meeting several criteria with their business purchase they are able to apply for permanent residency in Australia. The benefit of this system is that it allows someone become settled, know their financial position, and then have 4 long years to find the right opportunity.

Buying a business can be the riskiest purchase that people can make. I know that if I was outlay big money on a business I would want to see where the business is located, its plant and equipment, the marketing it does, what its competitors are doing and the demographics of the area amongst many other things. This sort of investigation can only be done by being in the area where the business is located and doing your homework.

We commonly hear of sellers spending thousands of dollars to market their business to target international buyers often with very disappointing results. If you were lucky enough to find a buyer, it would then take months to be approved with the right visa’s to get into the country.  While occasionally we do have some enquiry from overseas buyers through the internet, few of these are genuine and most don’t have the resources to purchase a business.

It’s no coincidence more businesses change hands through local business brokers than through any other source. When selling a business economics 101 does come into play- supply and demand. You will achieve more demand from marketing your business locally than you ever will overseas.