Asia Business Investor Blog

If you are looking at business for sale in Asia and think that the venture sounds interesting, then there are a series of key questions that you as the buyer should ask. This will make it easier to buy a business that meets your expectations. Likewise, if you are selling your business in Asia, then you should prepare answers for these questions as this will improve the chances of a successful business sale.

The first step prior to any 'detailed' exchange of information should be the preparation of a non-disclosure agreement. Your lawyer should assist you to prepare such an agreement that should ensure that both parties meet their obligations in terms of confidentiality. We would recommend that this is agreed fairly early in the process and this safeguards the seller of the business from potential competitors using the business sale for information gathering purposes.

Once, the non-disclosure agreement is in place we recommend the following questions be asked:

• Why are you selling your business?
  
• How many years have you been in business?
  
• How many years have you been in business at the present location?
  
• Did you create the business or did you buy it from someone else?
  
• What is the legal structure of your business?
• Do you have tax returns and financial statements that my accountant can look at?
• Which bank do you do business with?
  
• What types of insurance must your business carry?
  
• What licenses are necessary to own and/or run this business?
  
• How many hours did you work per week in your business?
  
• How many employees do you have?
  
• Do family members work in your business?
  
• Will the family members stay after the sale?
  
• Do you want be paid in installments or in full?
  
• Will you stay and work for a while after the business is sold?
• Do you have any long-term contracts or obligations to third-parties with the business?

Your accountant and lawyer can assist you with the questions themselves. The questions are critical whether you are looking at businesses for sale in Hong Kong or a business for sale in Indonesia or Saudi Arabia for that matter. 

Asia is undergoing a terrific boom in franchising.

The rise of the middle class in Asia and the growth of China and India has delivered more opportunities for franchising than ever in history. Consumer demand remains high for franchise offerings across Asia especially in high growth markets. The market is very receptive to franchises especially in conjunction with the boom in retail projects in Asia as well.

Here are just three key reasons to consider buying a franchise in Asia:

Lower Your Risk with a Proven Business System
It's a lot easier than starting a business from scratch. There are many complex factors involved in any small business and franchise systems provide the know-how and support for the business owner. In a 2001 survey conducted in Singapore, by the Singapore International Franchise Association, nine out of ten businesses which have franchised their operations have become more profitable. Systems alone can provide a solid basis for increased profitability which is a strong reason to consider franchising in Asia.

Asia's Consumer's Prefer Franchises
The evidence is tending to demonstrate that the retail boom in Asia has been very much a boom for franchises. The very high representation of local franchises in the Philippines, Malaysia, Korea and China to cater for consumer preferences demonstrates that there has been strong demand for franchises across the region.

The Economics
The solid economic growth in Asia represents a great opportunity for franchisers. The increase in the purchasing power of the Middle Class represents the underlying driver of franchise growth. As each economy develops, consumer demand will remain strong and franchisers will need to go where the market is going.

As always, it is a matter of choosing the right franchise. Review the listings at AsiaBusinessInvestor.com and see what is on offer.

In October this year the annual www.franchiselicenseasia.com will be on in Singapore from the 16th to the 18th of October. This event provides and opportunity to meet the various franchisers over the major event itself. It's worth going if you can make the effort.

We shall be providing some podcasts shortly with various franchisers in Asia and franchise consultants so stay tuned to listen to so interviews we will be doing on franchising in Asia.

When buying a business in Asia you are likely to find yourself inundated with advice from well meaning friends, family, neighbors – everyone is an expert and everyone has an opinion.

Who should you listen to when it comes time to make a decision that is going to be so fundamental as to how you spend your next few years? Perhaps it is necessary to rephrase the question to “Who should you not listen to?”

The process of buying a business can be slow, much time and energy will be exhausted in sourcing and researching suitable propositions. Whether you are looking at businesses for sale in Singapore or a business for sale in Thailand or Dubai the process takes time.

At AsiaBusinessInvestor.com we have a growing list of businesses and franchises available for sale that can serve as a starting point to allow you to connect with businesses for sale across Asia. Buyers benefit greatly from using professional advisors that have the appropriate skills, resources and experience relating to the particular industry that interests them. We will soon be providing links on the site to business brokers, lawyers and accountants that can ensure that the process of buying or selling a business is a success.

Two advisers that may be of particular assistance to a buyer of a business are your accountant and lawyer however it may be wrong to assume that the same accountant and lawyer that you have used previously have the necessary experience and expertise to guide you in this particular transaction. Making the right choice at this time is crucial as to how smoothly the transaction will proceed from this point forward.

Preferably you will be seeking advisers that have previous experience within commercial and business law, company transactions, possible tax consequences and how best to structure a business agreement. Someone who specializes will be able to add value to the deal, a true professional recognizes when advice outside their area of expertise is needed and they will know when to refer you to someone else.

Ideally you will have discussed your intention to buy a business with your accountant and lawyer prior to proceeding, and once having sourced what appears to be a suitable business it is prudent to listen to their recommendations prior to signing a conditional contract to purchase.

Your lawyer will help you understand exactly what is in the contract and what your responsibilities are should your offer be accepted by the seller. In all likelihood the conditional contract will be subject to a due diligence investigation which allows the buyer time to conduct more intensive research into the entity. It is during this process that your advisers need to be exceedingly proactive, assisting you in every way to ensure all necessary enquiries are made and answers are provided in an opportune manner.

Anyone can (and will) advise you on buying a business in Asia, nevertheless only a specialist with experience and familiarity within the industry and with the size of entity you are considering will be able to give you the expert advise you deserve. So if you are buying a business in Malaysia or buying a business in Thailand, or even buying a business in Singapore you should look beyond the well meaning opinions of friends and family, spending money on professional fees is a worthwhile investment.

As a prospective owner, you should establish the current worth of the business and its future prospects. Some important considerations are:

For advice and protection in buying a business we suggest that you seek the services of a lawyer, accountant or business advisor.

Very shortly, AsiaBusinessInvestor.com will provide a list of support service providers on the website. Buying a business in Asia is a great way to expand your fortunes, but you should work with experts to ensure that you make the best decisions for the future.