Category Archives: BUSINESSES

Crystal Car Wash boss Anthony Sahade in a lather over council fine

Crystal Carwash boss Anthony Sahade is used to courtroom soap operas.

Mr Sahade, a Point Piper millionaire who has been in and out of Sydney courts for years over neighbourhood disputes on Australia’s wealthiest street, has most recently been in a lather about a fine from Randwick Council..He was expanding his wash facilites to cater for dogs

The council found an unauthorised dog washing set-up, including a basin and a fence, had been installed at a Crystal Car Wash site in Coogee in March 2015, and ordered its removal.

Mr Sahade then sought and was granted council approval for the dog grooming facility, and refused to pay a $1500 fine for the initial unapproved installation.

The matter went to court and his company Lenjade was convicted and fined $12,000, with $8000 legal costs.

Mr Sahade appealed the decision and last week the Land and Environment Court acquitted Lenjade, ruling there was not enough evidence to prove Mr Sahade directly authorised the development.

During the hearings, Mr Sahade likened managing franchisees to fatherhood.

“I tell my son, ‘You have to be home by 10 o’clock’ but he comes home at 11 o’clock and he uses his discretion and he’s sensible then it’s not a punishable sin. It’s no different to the franchisee having a go at putting a dog wash in to enhance his business,” Mr Sahade said.

“Even though it’s prohibited within the lease it’s not something that’s worth punishing him [for] because he’s doing what’s best for his business and what’s best for his business ultimately profits the whole Crystal Carwash chain.”

It is the latest in a string of legal proceedings involving Mr Sahade.

In 2014, the NSW Civil and Administrative Tribunal ordered Mr Sahade and his son Victor not to “threaten or act in an aggressive manner” towards their neighbours on a battleaxe block on Wolseley Road.

Senior member Richard Buckley said that, since May 2005, Mr Sahade’s conduct had been “characterised by a lack of civility, arrogance, threatening behaviour, a disdain for the rights of other lot owners and a disregard for the obligations imposed” by strata laws.

The same year, the Federal Court fined Crystal Carwash for underpaying workers by almost $180,000.

In 2012, Woollahra Council took Mr Sahade to court over a staircase at his mansion, which was built without permission.

Two months later, as Mr Sahade and a carpenter demolished the steps, a physical fight broke out with a neighbour.

CCTV footage of the fight captured Mr Sahade telling the neighbour: “You’re a goner”, various courts heard.

A magistrate dismissed assault charges against the car wash boss.

Henry Sapiecha

Billionaire Mike Cannon-Brookes confesses to having impostor syndrome

The man in the baseball cap and hoodie may be Australia’s 17th richest individual but is scared of being found out as an impostor.

As a keynote speaker at TEDxSydney, Mike Cannon-Brookes  confessed he suffered from impostor syndrome and most days felt like he did not know what he was doing.

“Have you ever felt out of your depth, like a fraud, and just kind of guessed-slash-bullshitted your way through the situation, petrified that at any time someone was going to call you on it?” he said on Friday.

“It’s not a fear of failure. It’s not a fear of being unable to do it. It’s more a sensation of  getting away with something, a fear of being discovered, that at any time someone is going to figure it out.

“And if they did figure it out, you’d say to yourself, ‘well, that’s fair enough actually’.”

Mr Cannon-Brookes said when he and his partner, Scott Farquhar started their IT company their main aim was not to wear a suit to work but success brought complications.

Hiring their first HR manager, he did not know what questions to ask and later, attending board meetings in a T-shirt, he found himself  “surrounded by suits, acronyms flying around and feeling like a five-year-old as I write them down secretly in my notebook so that I can look them up on Wikipedia when I get home later”.

“For me impostor syndrome is a feeling of being well out of your depth. Internally you know you’re not experienced enough or qualified enough to justify being there. Yet you are there. And you have to figure a way out because you can’t just get out.”

The Australian Financial Review‘s 2017 Rich List named Mr Cannon-Brookes, 37 and a Sydneysider, as the nation’s 17th most wealthy individual with a personal fortune of $2.51 billion. He co-founded Atlassian , a collaboration software company that helps teams organise, discuss and complete shared work. More than 68,000 organisations – including eBay, Twitter, Coca-Cola, Visa, BMW and NASA – use Atlassian’s products.

Mr Cannon-Brookes joked he had met his wife posing as an impostor.

A weekly commuter to San Francisco some years back, he was in the Qantas lounge when she approached mistaking him for somebody else. He did not disabuse her of her initial impression.

“Classic Aussie bullshit became some sort of forward movement and a phone number … a decade later she is my wife and we have four children,” he said.

Mr Cannon-Brookes thought most successful people “felt like frauds” but the key was to realise they were out of their depth and harness self-doubt as a force for good.

Recently, when South Australia had a power crisis he saw something on Twitter that Tesla thought it could solve the situation so he fired off some tweets only to see the media descend on him as “some sort of expert in energy”.

At the time, he said, he did not know the difference between a AA battery and 100 megawatt battery.

“A chronic case of  impostor syndrome … I remember thinking, ‘I’ve kind of started something here I can’t really get out. If I abandon the situation, I could set back renewables in Australia and maybe look like a complete idiot on Twitter’. All I could do was to not freeze and try to learn,” he said.

He ended up brokering talks between Tesla boss Elon Musk, South Australian Premier Jay Weatherill and PM Malcolm Turnbull on the nation’s energy shortages.

Henry Sapiecha


Ever heard of the Australian Rae family? They just reaped in over $300m

It is one of the richest families in the country, and now the low-profile Rae family of Perth has pocketed more than $300 million from the sale of its New Zealand fuel retailing business to Caltex Australia.

In 2010, the family sold its Gull petrol retailing operations in Western Australia for an estimated $500 million


Now it has offloaded its Kiwi interests, Gull New Zealand, for $NZ340 million ($324 million) to Caltex Australia.

A few years after the sale of the WA operations in 2010, the Rae family’s fortune was estimated by The West Australian newspaper at $392 million, which has been pumped up significantly with Thursday’s sale.

The family moved into petrol retailing in the 1970s after Gull’s founder, Fred Rae, had spent time working in both the house building game as well as building grain silos.

It built its stake in the fiercely competitive fuel industry by sticking to a low-cost strategy, which in New Zealand has seen it rolling out unmanned petrol stations, helping it carve out a handy 5% share of the market from the majors.


Gull New Zealand is an independent fuel importer and distributor, which brings with it a fuel import terminal at Mount Maunganui, on the north island, and the company’s petrol stations and retail outlets.

Caltex has established a large fuel import centre at the recently closed Kurnell refinery site in Sydney, while also establishing a buying and trading arm in Singapore to supply its Australian operations.

The New Zealand acquisition “optimises Caltex’s infrastructure position, builds trading and shipping capability, grows the supply base and enhances Caltex’s retail fuel offering through low-risk entry into a new market”, the company said in a statement on Thursday.

It was acquiring the company on a multiple of 8.2 times the forecast earnings before interest, depreciation and amortisation for 2017, it said, which will decline to around 7.5 times taking annualised synergies into account. The acquisition is expected to increase earnings per share from the first full year of ownership.

Gull operates 77 retail sites in total, of which it controls 55 sites. Around a third of those are unmanned. It also operates a further 22 supply sites. The company sells about 300 million litres of transport fuel annually.

The Mount Maunganui terminal is the largest facility of its type in New Zealand, with total storage of about 90 million litres. Its retail network is concentrated in the northern half of the north island of New Zealand, and “is well placed to profitably grow via new to industry and/or new supply site expansions”, Caltex said.

Caltex would retain Gull’s brand, management and employees, it said.

Gull has a reputation for being a low-priced market competitor by operating a large number of unmanned outlets with payment by Eftpos or credit card, with no retail outlet. Its outlets are concentrated near its import terminal, with negotiations in the past with rival importers to acquire competitively priced wholesale product blocked when it has sought to expand onto New Zealand’s south island.

The bulk of the country’s population is located on the north island, with Christchurch the largest city on the south island.

The purchase by Caltex follows a period of upheaval in the New Zealand market following the exodus of US group Chevron, which operated the Caltex brand in New Zealand. This was bought for $NZ785 million ($750 million) by Z Energy, which now has close to 50 per cent of the local market.

Ratings agency Standard and Poors said the purchase “will enhance Caltex’s regional supply base, adding scale to its trading and shipping activities”.

“We view New Zealand as being a low risk market for expansion of retail fuel assets,” it said.


Australian start-ups X 13 to watch in 2016 with more to come.

Every investor dreams of getting in on the ground floor of the next Atlassian. Invest in a few start-ups and exit with an initial public offering – it’s as easy as that, right?

The future for Australian start-ups has never looked brighter, with Prime Minister Malcolm Turnbull last month announcing a $1.1 billion innovation package, including tax breaks for start-up investors, changes to crowdfunding legislation and initiatives to turn Australia into an innovation powerhouse.

These initiatives are definitely going to help more start-ups launch and grow, and make it far more attractive for investors.

Malcolm Turnbull has made start-ups a priority.image

Malcolm Turnbull has made start-ups a priority. Photo: Dallas Kilponen

But investing in start-ups is still a risky proposition.

Reliable data is hard to come by for Australian-funded start-ups, due to the relatively low numbers of funded businesses and the time it takes to get a return.

In the US, Correlation Ventures released a study of 21,000 funded companies that either failed, were acquired or had an IPO during 2014-15. Sixty-four per cent of companies failed to return all the capital invested, with many of those being complete wipe-outs. The remaining 35 per cent delivered returns of five to 100 times.

Last year I reviewed hundreds of applications and pitches for some of Australia’s top incubators and accelerators, including the CSIRO Accelerator, The University of Sydney’s Incubator and Telstra’s muru-D Accelerator.

Here are 13 start-ups to watch in 2016:

Early stage start-ups



What? Platform for enabling e-commerce for small merchants across social networks without setting up sophisticated, expensive e-commerce sites.

Why? When I first saw the founders six months ago, this was little more than a business plan and they had not started building the service. Fast-forward to December and they have a slick product, have recruited hundreds of business customers in a few months, and are processing transactions. Things don’t normally happen so fast in finance and payment processing. Great team and they have been selected for Telstra’s muru-D Accelerator.

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Simpla co-founders Shamir Karkal, CFO, and Josh Reich, CEO image

What? Simpla is a content-management platform that makes it easy for non-technical website owners to edit web-page designs, text, images and video by clicking and editing in their browser, without the requirement to understand how to code or all the tools normally needed to download, modify and upload code.

Why? Really slick solution that completely replaces the technical and antiquated tools and systems needed to modify web pages. Business web pages are still a growth area, however, web-page design and construction is overly complicated and it’s virtually impossible for most business owners and employees to modify their pages without the assistance of developers.

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Drive Yello

Johnny Timbs- Co-Founder at YELLO Pty Ltd image

What? Delivery service for restaurants and fast-food businesses to outsource their delivery capability.

Why? Normally, one avoids Uber-style businesses, except Drive Yello has traction, is going after business customers and the team is led by an experienced founder with an exit under his belt already from a previous business. Our guess is that it will pick up a lot of drivers and riders who don’t qualify for Uber because they don’t have a suitable vehicle.

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Later-stage start-ups


MELBOURNE, AUSTRALIA - JULY 18: Asher Tan, CEO and co-founder of CoinJar poses for a photo on July 18, 2014 in Melbourne, Australia. CoinJar is Australia's leading bitcoin platform. (Photo by Paul Jeffers/Fairfax Media via Getty Images) *** Local Caption *** Asher Tan
Asher Tan, chief executive and co-founder of CoinJar.

What? A bitcoin exchange based in Australia and now in Britain.

Why? I am a customer and it’s a pretty good experience. They have managed to combine bitcoin with local banking services, including connecting to a local bank account and a local EFTPOS card provider. Have raised significant funding and are one of the few bitcoin providers that have managed to connect bitcoin to the real banking world.

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What? Invoicing app for mobile businesses, tradies.

Why? Although this business was established early last decade and probably shouldn’t be called a start-up any more, it spent many years trying to develop the right solution before it found product-market fit. It managed to get mobile invoicing right in the last two years and shot to prominence, raising $50 million in venture capital funding in the past 18 months. It now has 200,000 business customers sending 1 million invoices a month.

Founder of Invoice2Go, Chris Strode image

Founder of Invoice2Go, Chris Strode. Photo: Daniel Munoz

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Casey Ellis-Founder and CEO-bugcrowd image


What? Crowdsourced security testing for business owners, application developers and corporations.

Why? Real and pressing problem for most corporations, cost of security breaches can be extreme, high-profile breaches are becoming commonplace and reputational or transactional losses can bankrupt companies. Application and security testing is very difficult, most businesses are unable to manage this on their own. No one company or consultant can handle this for them. By building a community of 22,000 security consultants, they are able to provide testing for developers.

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envato founder cian ta'eed image

Envato co-founder and executive director Cyan Ta’eed. Photo: Pat Scala

What? Created a marketplace for web designs, WordPress Themes, plug-ins and other digital assets.

Why? Probably one of the most successful Australian start-ups never heard of outside the web development and start-up community. Envato bootstrapped its way to $50 million a year in revenue and has more than 5.5 million customers and developers.

Straw poll from a few of my Twitter buddies

Steve Baxter: Shark Tank investor and entrepreneur @sbxr

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Andrew Barnes (left) and co-founder Chris Eigeland of GO1

What? Online training platform for businesses.

Why? Great team including a Rhodes Scholar, lots of early revenue and they have been accepted into Y Combinator, which is the start-up equivalent of an Australian singer making it into the finals of American Idol.

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Cohort Solutions

Paul Jones (left) and Mark Fletcher's Cohort Solutions aims to look after foreign students image

Paul Jones (left) and Mark Fletcher’s Cohort Solutions aims to look after foreign students

What? Provides a comprehensive service for overseas students attending Australian universities, including health insurance, telecommunications and foreign exchange services.

Why? Significant traction with more than 10,000 customers, each of whom have to transfer $20,000 to $30,000 from overseas every six months as well as handle all sorts of other banking and logistical issues.

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Pocketbook co-founder Bosco Tan image

Pocketbook co-founder Bosco Tan. Photo: Louie Douvis

Mick Liubinskas, Entrepreneur in Residence at Telstra’s muru-D Accelerator @liubinskas

What? Personal finance app that brings together all of your banking, budgeting and credit cards and automatically categorises the transactions on each of them.

Why? Probably the only Australian personal finance app that has managed to get integration working with all of the major banks, very slick app and significant transaction.

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Norton Rose Fulbright managing partner Wayne Spanner (l) and LawPath's Damien Andreasen are teaming image

What? Online legal service that provides standardised legal documents for common transactions as well as access to hundreds of lawyers for customised solutions.

Why? This model has been very successful in the US and the team has significant traction.

James Alexander, chief executive of Incubate, Sydney University @jamesasyd

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Basketball Forever

Alex Sumsky from Basketball Forever image

What? World’s largest online basketball community

Why? A total of 850,000 Facebook followers and 20 million views a month make this one of the most popular sports sites in the world, originally founded in Australia and run by a very small team they are in the process of working out how to monetise the business but they have massive user adoption.

Nicole Williamson, country head at Lanzatech @nicolewill100

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Kath Purkis co-founder of Her Fashion Box & founder of Le Black Book image

Kath Purkis co-founder of Her Fashion Box & founder of Le Black Book

What? Monthly fashion box subscription service.

Why? Very new business has managed to achieve significant traction with 30,000 boxes shipped to customers.

Mike Nicholls is responsible for developing new technologies and prototyping products from the Invention Development Fund patent portfolio at Intellectual Ventures. He is a Telstra ICT Industry advisory board member, blogger at, and mentor at CSIRO Accelerator, muru-D and Follow Mike on Twitter @mikenicholls88. Follow MySmallBusiness on Twitter, Facebook and LinkedIn.

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This is not intended as financial advice. Mike Nicholls has no financial interest in these start-ups. Some surveyed in the straw poll may have interests in the start-ups they mentioned.


Henry Sapiecha

I am now of the quiet active searching mind in the twilight of my years

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Henry Sapiecha

Atlassian: the Australian millionaire factory. Story in videos & pics.



Atlassian surges in debut

Shares of Australian business software maker Atlassian soar in their Nasdaq debut.

They’re known as the “Royals” and “the chosen ones” — the select few invited to be in New York on Thursday morning to ring the bells celebrating the opening of the stock exchange and Australian tech darling Atlassian’s massive IPO.

About 40 Atlassian employees — many of whom were hand-picked by co-founders Mike Cannon-Brookes and Scott Farquhar in the company’s early years — celebrated overnight as they became multi-millionaires and Atlassian became a company with a market cap of $US5.74 billion ($7.9 billion).

Atlassian, a leading provider of collaboration software for teams with products, opened for trading on The Nasdaq Stock Market image

Atlassian, a leading provider of collaboration software for teams with products, opened for trading on The Nasdaq Stock Market on December 10, 2015. Photo: Christopher Galluzzo

By the end of Thursday’s trading in the US, however, more than just those 40 became millionaires. Former Atlassian employees say more than 100 staff are now either millionaires or multi-millionaires.

It’s also understood the shares of a number of staff who joined in recent years are now worth six figures.

“There are going to be a hundred people who are going to be millionaires today — at least on paper,” a former Atlassian employee, who didn’t wish to be named, told Fairfax Media.

Atlassian co-founders Scott Farquhar (right) and Mike Cannon-Brookes image

Atlassian co-founders Scott Farquhar (right) and Mike Cannon-Brookes. Photo: Trevor Collens

They added that the Royals had been “going out on lavish dinners and celebrations” while in New York in recent days and were already discussing how they should splurge their cash, and whether it should be on luxury cars.

Many are also considering investing their money in Australian start-ups, or starting their own.

“Mike and Scott’s legacy will be beyond Atlassian,” the former Atlassian employee said. “They want to make billionaires in Australia that are going to invest in Australian companies — the next wave of start-ups

Those likely to make the most from the IPO are those who joined between 2002, when the company started, and 2008. That’s when Atlassian offered employees the chance to buy shares at a much lower price than $US27, the price shares were trading for on Thursday as the market closed. For employees who were offered — and purchased — shares at 50 cents several years ago, their stake is now 5300 per cent more valuable.

While some employees chose to hedge their bets and sell some of their shares last year for $US16 to T. Rowe Price and Dragoneer Investment Capital in a financing round, many are understood to have held on to most of them.

When Atlassian received that financing, which valued the company at $US3.3 billion, Mr Cannon-Brookes declined to specify how many millionaires his company had made at the time, but said it was “not double digit”.

“That number [of millionaires] blew both Scott and I away,” Mr Cannon-Brookes said at the time to The Australian.

“That was probably the biggest achievement to come out of this [new investment] and [something] we hadn’t thought about.”

There’s never been a more exciting time to be an Australian — as Prime Minister Malcolm Turnbull would say — or, in this case, to be an Atlassian employee.


Henry Sapiecha

‘The richest database I’ve seen’: why AussieCommerce bought Jeremy Reid’s PinchME

pinchme Jeremy Reid image

Jeremy Reid has managed to attract stellar investment despite still serving an ASIC ban. Photo: Louie Douvis

Its revenues might be negligible in the context of a group tracking toward $200 million revenue this financial year, but AussieCommerce co-founder Adam Schwab thinks the Australian arm of product sample distributor PinchME can turn his e-merchant into “a media company”.

AussieCommerce began negotiations before Christmas with PinchME’s now New York-based founder, Jeremy Reid, who despite still serving a two-year ASIC ban on providing financial services following the collapse of his hedge fund-of-funds Everest Babcock & Brown, managed to attract stellar backer for his sampling start-up: Kerry Stokes, the Liberman and Smorgon families, Toll Holdings founder Paul Little, SEEK co-founder Andrew Bassat and advertising heavyweight David Droga.

That group will continue to part-own PinchME’s US business, which now employs 25 people in New York and according to president Adam Caplan, has completed 200 campaigns and shipped four million samples for brands including Johnson & Johnson, P&G, Unilever, L’Oreal, Revlon, Coty, Pfizer, Kimberly-Clark, Kraft, and Kellogg’s.

The eight employees of PinchME Australia are already installed at AussieCommerce’s offices at Wynyard in Sydney, and its 500,000-strong database of subscribers are a source of wonder to Schwab.

“The fact that you’re giving these people free samples means they’re incredibly engaged,” Schwab says.

“The open rates on PinchME emails are twice or three times what you get at a typical e-commerce business, and the information they’ve gathered on subscribers is the richest I’ve seen.”

Its multinational clients pay PinchME to provide narrowly targeted sampling campaigns, and the fact that each sample is accompanied by six questions – which the subscriber must complete if they want another freebie – means the ability to segment its database is always improving, Schwab says.

“The more targeted the offer, the more powerful. PinchMe is going to be a great complement to [group buying platform] Spreets that we bought last year,” Schwab says.

Of particular interest to Schwab is the full-fledged marketing campaigns which PinchME can produce alongside the sample deliveries.

“This acquisition turns us into a media company,” he says, pointing out that revenues from AussieCommerce’s original flash sale and ‘daily deal’ activity is now “a single digit percentage” in terms of the overall group.

Terms of the deal were undisclosed. PinchME Australia’s revenues are not known however it’s understood to have not yet turned a profit since its 2013 launch.


Henry Sapiecha



Buying a business will probably be the most important and largest investment decision you will ever make in your working life. It may seem like a gamble, either giving you financial freedom or destroying your financial future.

From my years of experience in undertaking due diligence work for potential business owners, I have unmasked some alarming warning signs. If they were caught sooner, potential buyers would have saved thousands of dollars.

I have a belief that no one sells a good business. Why would you? If a business is running well and providing cash flow and profits — and the owner is not required to work 60-80 hours a week — then why sell it? The fact that a business is being sold is a warning sign in itself. There could be legitimate reasons, but you must delve deeper to separate fact from fiction as to why the business is for sale.

To avoid the heartache of paying too much for a business, there are 10 warning signs to look out for.

1. The seller refuses to disclose all financial information

Get suspicious when the business owner is not forthcoming with the financial records or does not answer all your questions in relation to the financial accounts, profit and expenses for the business. Sometimes business owners will hold back key information such as bank records, customer lists and recent sales history. If you feel the seller is not being completely upfront and honest with you in providing this information, then beware.

2. Loss of interest in the last 12 months

Most business owners do not sell a business overnight. It is a decision they have made over time, and after they’ve chosen to sell, it may take considerably more time to find a buyer. Once they have reached this decision, most business owners refuse to reinvest any more money into the business to improve or to grow it.

You will often find plant and equipment maintenance being neglected, repairs being postponed, reduced or no money being invested in staff training, marketing and advertising. Make sure you look closely at these expense categories over the last 12 months to see if the owner has lost interest. If this is the case, then you may be stuck with lagging sales and a need to invest additional capital to make up for the neglect.

3. The business is in a sunset industry

It is not worthwhile purchasing a business in an industry that has plateaued or is in decline. Typical brick and mortar businesses in the retail space are struggling at the moment, and I would certainly advise anyone to look closely before they purchase such a business.

It may be the main reason why an owner is trying to sell. They have had a good run over the last 5-10 years when the industry was buoyant, and now with emergence of e-commerce, they are struggling to grow that business. Do your research on where the industry is going in the next 2-3 years. This includes closely monitoring any existing and potential competitors in the space.

4. Secret shopping wasn’t pleasant

Do your own surveillance and snoop around. Visit the place of business as a potential customer, and gauge for yourself the following:

  • Customer service levels
  • Cleanliness and state of disrepair
  • Staff enthusiasm
  • General business activity

A quick walk around the business premise with your eyes open will reveal key warning signs that aren’t obvious from just eyeballing the financial accounts. Is the place busy with a steady flow of customers, or are there no customers in sight? Are staff keen and enthusiastic to assist you, or are they bored and passive? Does the business look clean and well maintained or run-down and tired? Nothing beats opening your eyes and ears and pretending to be a potential customer. It can reveal a lot.

5. Poor customer reviews

Research the web to really gauge customer opinion. While customer reviews can be one-sided, you will need to get an overall feel as to whether the marketplace is happy and satisfied with the existing business.

A pattern of poor customer reviews online is a clear warning sign the market is not happy and may shop elsewhere. You need to bring this to the attention of the seller and find out the reasons why. It may be difficult to reverse a poor customer sentiment once it’s in cyberspace.

6. Disgruntled key staff members

If possible, talk to some of the key employees within the business. You are going to rely on them in the next 12-18 months to help educate and assist you in the transition phase of the business, so you certainly want them to stick around for that period of time.

Disgruntled employees will look at a change of business ownership as the perfect opportunity to jump ship to a competitor. A sure warning sign is if the business owner refuses to allow any communication between you to their key employees.

7. Poor credit rating and borrowing history

Do an online credit reference check on the business. In the report you will discover whether the business pays its suppliers on time and whether there are any pending legal actions against the business. The last thing you want is to purchase a business only to get a stack of lawsuits served to you.

Make sure to delve into any current or outstanding warranty issues for products. You don’t want a huge bill of warranty claims after you purchase the business. Get all outstanding warranty claims quantified and signed off by the owner. Ask for a reduction in the purchase price if the outstanding warranties are significant.

8. The business relies on a few customers

This is another warning sign that most potential business owners neglect. Does the business rely on a few large customer accounts? You run the risk of a significant downturn in sales and profit if you lose just one of these major customer accounts. Trawling through the customer list will reveal any warning signs here.

9. Unpaid tax and employee entitlements

Request from the business owner information in relation to taxes and unpaid employee entitlements.  Make sure that these are completely up to date and that there is no outstanding tax or unpaid entitlements to staff.

You could be on the verge of half your staff walking out after the purchase simply because they are owed wages and entitlements that date back to before you became the owner. Also, request a business tax report from the tax authorities and check for any amount outstanding. Any unpaid taxes will be revealed in this report and will send your alarm bells ringing.

10. Your gut instinct tells you so

Among all the warning signs discussed so far, go with your gut. Trust your instincts. If things just don’t stack up, then walk away. After helping many clients purchase their first business, I still find that the biggest warning sign comes from my gut.

Are your ‘spidey-senses’ starting to tingle? Are your instincts giving you a good or bad vibe about the owner and the business? I tell clients to trust their instincts the most when making that final decision to sign on the dotted line.

Buying a business can be the most harrowing or the most thrilling experience of your life. There’s a lot at stake — your financial future and the future of your family. So before you take the plunge, follow my list of ten warning signs to look for and hopefully you’ll make the right choice.                     

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Henry Sapiecha


Business loans via paypal unfortunately are heavily concentrated on businesses with a high level of credit card usage in the business. See our earlier business finance options that would be better suited to most borrowers.

Henry Sapiecha