Before you spend anything
Is this one worth pursuing?
You have found a business that looks promising and all you have is the advertisement or a broker's information memorandum. Due diligence is weeks away and thousands of dollars off. This is the step in between: we read what you have been given the way a credit team would, and tell you whether it is worth going further.
What you get
A credit-side read, in two business days.
- What the asking price implies about the earnings behind it
- Whether the implied multiple is sane for that sector and size
- The claims in the advertisement that will not survive contact with evidence
- The questions to put to the vendor or the broker, in writing, ready to send
- A straight answer on whether this is worth paying for diligence yet
The First Look
$295
2 business days, one business per engagement
The $295 is credited in full against any due diligence engagement on the same business within 90 days. If the answer is to walk away, you have spent $295 instead of thousands.
Book a callAll fees exclude GST.
How it is read
Four questions, answered from one document.
What the price implies.
An asking price is a claim about earnings. Work backwards from it at the multiples that sector actually trades on, and you get the earnings the vendor is implicitly asserting. Sometimes that number is plausible. Often it is not, and that is worth knowing before you spend a weekend on the drive past.
What the advertisement is not saying.
A listing is a sales document. What is missing from it is frequently more informative than what is in it: no mention of the lease, earnings quoted before an owner's wage, a turnover figure with no margin beside it, or three years of history compressed into one good year.
What to ask, in writing.
You get the questions to put to the vendor or the broker, ready to send. Most of them are the questions a credit assessor would eventually ask, which means the answers are useful whether you proceed or not.
Whether to spend more money.
The point of the exercise. Some businesses are worth a full diligence engagement and some are not worth another hour of your time. You get a straight answer, and the fee is the same either way.
What this is not
- Due diligence, which needs source documents this stage does not have
- A valuation or a recommended price
- Advice on whether to buy
- Any contact with the vendor, the broker or the agent on your behalf
- Legal or tax opinions
When a business clears this stage, the next step is financial due diligence, which rebuilds the earnings from source documents. Fixed fees from $2,500, less the $295 you have already paid.
Where this sits
Most buyers look for six to eighteen months.
Over that time a serious buyer will look closely at a dozen businesses and pursue two or three. Paying for full diligence on each one is impossible, and going on instinct is how people end up under contract on something that never stacked up.
Before you have a shortlist, work out your range with the free affordability calculator. Once you have one, this is the cheap screen that decides where the real money goes. The whole sequence is set out in the first-timer's guide.
Want a straight read on your deal?
Book a free call with Nicholas. Bring the numbers you have, and we will tell you the right service level and the fixed fee. No obligation.
Common questions
Whatever you have. Usually that is the advertisement from a marketplace or a broker's information memorandum, and sometimes a one-page summary of the financials. You do not need three years of statements, and if you had them you would be past this stage. One business per engagement.
Completely different, and much cheaper. Due diligence rebuilds the earnings from bank statements, BAS lodgements and the general ledger, and it starts at $2,500 because that work takes weeks. The First Look reads what you have been given and tells you whether it hangs together. It is the step that decides whether diligence is worth commissioning at all.
Send them one at a time. Each is a separate engagement at $295, and in practice the first one usually teaches you enough to screen the other two yourself. That is a good outcome and we would rather you had it than paid us three times.
It is credited in full against any due diligence engagement on the same business within 90 days, so if you proceed the First Look effectively costs nothing. If the answer is to walk away, you have spent $295 rather than several thousand finding that out.
No. We will tell you what the numbers in front of you imply, what is missing, and what to ask. Whether to buy is your decision, with your solicitor and your accountant. We do not provide valuations and we do not act as business agents.
That is itself the finding, and it is a common one. A great deal can be read from an asking price, a stated turnover and a sector, and where a listing gives you almost nothing the useful output is the list of what to demand before you go further. You will get that list.
Not yet. Work out your range first, which the affordability calculator does for free, and read the buyer's guide. Come back when something is worth a serious look.
The First Look is a commercial read of the material you provide. It is not due diligence, it is not a valuation, and it is not advice to buy or not to buy. We do not act as business agents and we do not arrange credit. Tax and legal questions are flagged for your accountant and your solicitor.