Business for Sale Sydney – A Look into the Business Process
What are the Stages of the Business Discovery Process?The discovery process breaks down the steps of evaluating a business. Think of it like an ordinary job interview where both parties can explore the viability of each other. It is structured so that you and the franchisor can learn more about each other and determine their mutual interest. A business development representative or a business coach will typically lead every step. The goal is to educate you on the business and many more aspects of running one. By the end of the process, you will have more information that you can use to make a smarter decision about whether you should buy the business or not.
Step 1: Brand Overview and IntroductionsThe very first step of acquiring a franchise is to submit a request for consideration. Your submission will be confidential and will be a non-binding application. The purpose is just to show your interest in the business. At this stage, you can schedule a call or a meetup where you can talk to a business representative or consultant. You can have a brief conversation about the business and how things are done. You can raise questions if you need to and the business consultant will be happy to address them – anything to help you understand how it is to become a franchise partner.
Step 2: Brand ReviewOne of the most important parts of the business discovery process is being able to review the brand. At this point, you can have access to videos, printed materials, discussion topics, meetings, and seminars where you can learn more information about the brand. Use this opportunity to deep-dive into the business and better understand the brand position, including its short-term and long-term goals. Review its history and get a feel of the product, whether it suits your ideals, and whether it is something you want to sell in the market.
Step 3: Review of Unit Economics and Franchise Disclosure DocumentThis is where the business discovery process gets even more exciting. At this stage, the franchisor usually walks you through the franchise disclosure document (FDD). An FDD is a legal document given to the franchise partner as part of the pre-selling process. It provides a clear picture of what business owners could expect during the term of the business. This document will also help you understand the different aspects of running the business and other mutual obligations. If you have any questions about the FDD, you could also take this opportunity to ask your business representative.
Step 4: Business ValidationTo validate the business, you can interview existing franchise owners to hear about their experience. Through this, you can get an idea of what it is like to run a business and get a feel for whether it is a great fit for you. During this stage, you will get insight into the strengths and weaknesses of the brand you’re trying to join. Here, you can evaluate whether the business provides value in the market through the company’s pitch and presentation.
Step 5: Discovery DayMost companies would host a meet-the-team day, where you can personally talk with the people behind the business. Depending on how big the expected audience is, some businesses would call for a special event in private places. However, many companies would simply use their headquarters to cater to potential franchise partners where they can ask questions and learn more about operating the business. When you’ve reached this stage, it means you’re at least 90% sure that you’re buying the business. Consequently, you may also need to bring some cash or at least be ready with your capital. Most companies would offer a discounted price for those aspiring business owners who would buy the franchise during this time. If you’ve decided, you can grab this opportunity to get on board.
Step 6: Purchase DecisionAfter you’ve attended the discovery day, you can receive an award letter and franchise agreement. If you’re confident enough, you can sign the agreement. And voila! You’re a business owner now.
Key Questions to Ask During the Discovery ProcessBefore signing a franchise contract, you can ask a few questions that are relevant to the discovery process. You can use this opportunity to gather the information needed for you to make a confident purchase decision. The following are some of the most important questions you can ask. What were the prior franchisees’ experiences with the business? Did they have any challenges and how did they deal with them? How does the company provide support to business owners before and after opening? Will there be monthly or quarterly meetings to tackle challenges and plan for the best course of action to increase sales? How is the business performing compared with other competitors? Are franchise territories protected? What are the networking opportunities with other business owners?
ConclusionThe business discovery process is an important part of the pre-selling process of businesses. During these processes, you can learn about the different aspects including the history, weakness, and strength of the business you’re about to purchase. A business discovery process can take about 3-4 months. That means you have a lot of time to do your research and gather information that you can use to make a well-informed decision. Remember, it is important to ask probing questions throughout the discovery process. If you want to talk to a business advisor, feel free to contact The Local Guys. We offer various business opportunities for beginners and experienced business owners in Sydney.
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