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ocean

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ocean

Hi guys. I have to buy and run a biz in Oz in order to have the privilege of living there. I would like to fill in my huge knowledge gaps. Where did you find the differences were and what is done totally differently? I assume HR and Contract Law but I could be totally wrong. Also any recommended resources would be appreciated. Am not great at retaining info these days either...which could be an occupational hazard

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RYLC

Please can you provide more information such as which state you are going to (many laws are state specific and Australia is more like Europe with each state operating as a separate "country" in many respects) and what sort of business you are looking to start.  Franchise or solo etc.

 

I'll also tag @Bonny for you because I think she has experience with running a business. Apologies if it's not you Bonny.  I'll do a search if I've got the wrong person.

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ocean

Hi there. That's interesting about the states. We are going to qld and are hoping to avoid a franchise.

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SimpleSimon

Hi @ocean,

 

My wife and I set up a business 14 years ago in NSW. It took us 3 attempts in Oz before we hit the right formula which allowed us to leave our corporate employment, after 10 years working in Oz. My brother has been in Qld for 6 years trying to get his own show going and trying a number of different things and hasn't come right yet.

 

We run a B2B service business in a highly regulated technical space. Our company consists of scientists and engineers operating in pharmaceuticals and medical devices industries. My wife has business qualifications and runs the business.

 

To get going, we advertised, presented at conferences, had a social media presence, sent out bulk emails and so on. Our database covered 80% of the industry. We've found 3 things only have worked (1) association with other organisations that have great reputations (2) referrals from happy clients (3) coffee dates with people we know in the industry.

 

I thus advise people coming into Australia to work for someone first before starting up on your own. You build your network, you get the Saffer knocked out of you a bit and become more attractive to Ozzies, and you learn the business scene.

 

If you come in cold into and buy a business, you could lose your shirt and everything else. They'll see you coming a mile off and could give you a lousy territory, overcharge you, fix the accounts or fix the rules so you become slave labour.

 

Unlike Saffer workforce where maybe 5% has tertiary education, here it is >50% and they are very business savvy and competitive. The business world is a political and legal minefield and Saffers are frank, honest, ethical and outspoken. This makes us an easy target for others wanting to get ahead and make money out of us.

 

in terms of what to do, stick to the knitting I.e. What you are trained in and good at. I've seen lots of Saffers try to make money doing something new here, and generally they've failed and/or found it very tough.

 

To operate effectively in business in general and HR and contract law specifically you have to know the legislation, case law and local business principles.

 

Through the course of employment and our business we've been involved with both HR and contract law and work a lot with legal firms in different areas. There are maybe 12 different areas of legislation that impact on us and we have to have a working knowledge of them all to stay in business.

 

We've seen judges work in weird and wonderful ways giving judgements that nobody ever anticipated. There are nuances to the law that change due to cases. For example we are currently negotiating an agreement and its come down to interpretation of "consequential damages" due to a judgement made 3 years ago. Who would have thunk?

 

so my advice in your case is find someone who wants to slowly move out of their business. Buy a share in but keep them around for 3 - 5 years while you buy up the rest of the company. I've seen this work well. Also make sure you have enough resources to keep you going for up to 5 years without an income, just in case.

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ocean

Wow! Thank you so much for the insight (not so) simple Simon. This really does help and makes total sense. I think your idea of buying into a business slowly with the current owner in place is brilliant. I am doing a course on buying a business and they state emphatically that you should only buy what you know, which is quite limiting for us being in an automotive manufacturing space. Sigh... and ironically everything else seems so much more interesting. I infer that we should get good people to help us, such as good lawyers and HR people as they will understand the nuances which I might not pick up from a course. Very sobering.. maybe we should just try make more money and buy our way in....

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SimpleSimon

OK, automotive manufacturing is not a great industry in Australia as the majors are shutting down their plants.

However there are lots of opportunities to buy automotive businesses. See for e.g. https://www.anybusiness.com.au/automotive-for-sale/nsw.

 

We found that our most important friend in the early days was our accountant. He helped us set up the business, gave great advice and introduced us to a decent lawyer when we needed it. Getting a Saffer accountant in Oz is probably a good idea as they might have a personal interest in making sure you succeed.

 

The state and federal government websites are great and tell you what to do. See for e.g. http://www.smallbusiness.nsw.gov.au/resources/useful-business-sites. You can also send them emails and they are very responsive and helpful as their mandate is to expand small business.

 

There are various ways to finance a business purchase. Get friends and family to give you funds to shift them to Oz, get a bank loan, or pay the vendor out of future profits.

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SimpleSimon

And here are some courses on setting up a small business: http://www.australiansmallbusiness.com.au/

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ottg

My comments from another thread is applicable here

Then take at heart what Simple Simon says. 

On 7/29/2017 at 3:38 AM, SimpleSimon said:

e found 3 things only have worked (1) association with other organisations that have great reputations (2) referrals from happy clients (3) coffee dates with people we know in the industry.

More important is they have had success after 3rd attempts. Starting something new is tough!

Some other comments:

Buy into an existing business with an existing client base has less risk (however there are a few pitfalls which I have seen). Better if it's under management.

Preferably you would look for where the owner wants to exit/retires and it has improvement potential - here you need to know what to look for during the due diligence.

Always better if you first can work in the industry to understand the underlying forces. So first as an employee with the aim to invest (again a few pit falls which I have seen). If you interested (although not in Qld) I do have contacts of a few people who bought, improved and manage successful businesses.

 

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ocean

Thank you Simple Simon for the links and sound advice! I have already found a good accountant (Seems good from the website) and your info triggered

a cunning plan m'lord. PS We lived in Emmarentia for 13 years! 

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ocean
On 30/07/2017 at 3:03 AM, ottg said:

My comments from another thread is applicable here

Then take at heart what Simple Simon says. 

More important is they have had success after 3rd attempts. Starting something new is tough!

Some other comments:

Buy into an existing business with an existing client base has less risk (however there are a few pitfalls which I have seen). Better if it's under management.

Preferably you would look for where the owner wants to exit/retires and it has improvement potential - here you need to know what to look for during the due diligence.

Always better if you first can work in the industry to understand the underlying forces. So first as an employee with the aim to invest (again a few pit falls which I have seen). If you interested (although not in Qld) I do have contacts of a few people who bought, improved and manage successful businesses.

 

Thanks, its a great idea to work in the industry first, be interesting to work for a boss after being the boss for 20 years. Thanks, i would greatly appreciate

the contact deets of people who have made a success of things!!....... yáll scaring me now....

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SimpleSimon

My brother was his own boss for 25 years. He came across to Oz and tried to work for Australian bosses and found he can't. Different sense of humour, different view of the world etc. He's has set up his own mortgage broker business.

 

 I don't personally know of stories of Saffers who've successfully bought into businesses but I'll ask around.

 

I know of some failures - my brother, friends and myself included. Main reason was we started working for the owner with agreement we would buy them out. We had ideas to transform the business and the owners didn't like their baby being tampered with. Another reason was things were quite different once we got inside the business.

Edited by SimpleSimon

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ocean

Thanks again! Reality check for us. .. feeling quite despondent now. I will either hunt out some success stories.. or eat a tub of ice cream

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SimpleSimon
On 28/07/2017 at 5:54 PM, ocean said:

Hi guys. I have to buy and run a biz in Oz in order to have the privilege of living there...... Am not great at retaining info these days either...which could be an occupational hazard

 

@ocean your statements are interesting. Is there any other way you can get into Oz than buying a business? Why is retaining info an issue,? I find the brain is a wonderful organ. The more you push it, the more it works for you.

 

I'm  not suggesting you give up because we say that it's tough to get going setting up / buying a business. I'm just pointing out that Australia is a very competitive environment and learn the rules first or you'll get hurt. But make sure you have the right attitude while learning.

 

There are some great success stories of Saffers who've reached the stars. For e.g. the Duchens have set up and sold 2 pharmaceutical companies each for hundreds of millions of $'s. Another is my friend who was in my class at Greenside High and has set up and sold a few businesses. He now has a waterfront property in Sydney with the current prime minister as his neighbour.

 

The business we finally set up is successful. It cost us < $20,000 to get going but we did stake our house on it. We had about 3 months living reserves and if it didn't work out by then we would have to sell up everything we'd accumulated. We took a leap of faith on a single client 2 days a week, 3 month contract. It worked out, we're still living in the same house. 4 years ago I picked up cancer. We were open with our clients and staff who stuck with us while we fought the disease. I am in remission and we've since doubled turnover. 

 

There are always opportunities and ways to do things. So our comments should harden your resolve to find a way in, not send you to the freezer for ice cream.

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ottg
2 hours ago, SimpleSimon said:

There are always opportunities and ways to do things. So our comments should harden your resolve to find a way in, not send you to the freezer for ice cream.

++

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Bonny

@ocean I was wondering whether both you and your wife work in your current business? It's usually a good idea for the primary visa applicant to work in the new business while the spouse gets a job with $$ income. It's a lot less stressful financially. 

 

Other than that I can only agree with @SimpleSimon. I also know more people who have failed than succeeded unfortunately. So you're right to be cautious. But those who have succeeded are doing very well.

 

The ATO website has a lot of very good general advice about owning a business. You will need to employ at least one Australian as part of your visa conditions (unless it's changed), and you'll need to understand their pay rates and your obligations in terms of their Super, hours etc.

 

That's why it's much easier to take over a business which has good systems in place, or at the very least, a good bookkeeper. If the owners can do a handover period, all the better. And negotiate hard on price, people will always take offers. 

 

I'm not going to sugar-coat it. The business visa is a tough one. Just make sure you're buying a profitable business. Financials in Australia and not required to be audited, so you need to triple check the value.

Edited by Bonny

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ocean

Hi Bonny

Its me and my husband who work together and I am the main applicant. I cant imagine either of us getting a job easily.... 

we would definitely purchase a going concern, but I think you have all put me off sufficiently...... going to enter the US lottery

in October.

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