|
|
 |
Issue 5
| Buying a newsagency 4 |
BUYING A NEWSAGENCY – 4
If you remember from the last newsletter we looked at how to verify the figures that the newsagent presents when selling the business – the way to do it was to engage a specialist investigating accountant and they would provide a report to form the basis of your loan application.
Now that you are progressing through the sale process the next step is to contact your Solicitor to have the lease reviewed. If the lease is being assigned, then the vendor’s solicitor will prepare a Deed of Assignment. Should you be seeking a new lease from when you take over you need to be mindful that this may trigger GST on the purchase price – talk to both your accountant and solicitor about this.
In NSW:
Once the lease details have been sorted out you may have to have an interview with either the landlord or their agent and once you have satisfied them then you can move on to the exchange of contracts. This is where you need to come up with a 10% deposit (GW + F&F) and on exchange you are now committed to buying the newsagency and the owner is committed to selling it to you. Before this point either of you could have walked away from the transaction or renegotiated any part of the transaction.
A Newsagency contract should be conditional upon a buyer gaining Lotteries approval, Publisher approval and any other required and agreed conditions. This will allow the buyer to secure the business and allow the transaction to proceed, however should any of these conditions not be met between exchange and possession, the contract will be null and void. (Falls over!)
Should you change your mind after the exchange, you stand a good chance of losing your deposit as the vendor has the ability to keep it, if all contractual conditions have been met.
There is no cooling off period as there is with buying a house – make sure you do all your research before exchange and that way you can be confident that you will not regret the decision made.
In QLD:
There is a different system, here when you make your offer you can do so with a signed conditional contract which covers getting a due diligence report done, having the lease checked out and getting finance arranged within a stipulated period, usually 21 days. This of course, also covers Lotteries and Publisher approvals. If one of these conditions can't be met, then the contract collapses and you are entitled to a refund of the deposit.
Now you have exchanged contracts you need to inform the major publishers, distributors, Lotteries, suppliers and organise a stock taker.
Your contract should have had the normal newsagency conditions inserted – make very sure that they are in your contract and check with a specialist newsagency solicitor if you are unsure. These conditions protect you should the publishers’ not accredit you or Lotteries do not approve your application, should you be unable to get a satisfactory lease and finally will specify the duration and breakup of the training to be provided.
You will need to prepare a thorough business plan as well as a cash flow forecast for the next 12 months as most of the major publishers & suppliers require this when you go to open an account with them and remember the publishers may want to interview you as well. Buyers dealing with Australian Newsagency Sales will have the templates of the business plan & cash flow forecast plus many other requirements provided as part of the normal level of service that we provide.
Have you completed your Lotteries training yet? There is a requirement for compulsory 5 days of training for a shop with an online terminal and 1 day if there are only ”Scratchies” sold. You will not be able to take over the shop until this has been completed.
Is there a Post Office involved? The process including training can take up to 12 weeks to complete before you can take over as the postmaster.
There are numerous things to consider when buying that’s why you should deal with a reputable specialist broker such as Australian Newsagency Sales. Contact us and we will happily answer your questions.
|
|
|
|
|
|
|
|
