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Business
in
Australia
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Businesses in
Australia, are very different to many other places in the world. The stability of the economy, plus the size of the population, and the location, are very important considerations. The reality is, that it's not easy to make money in Australia. It is difficult and can be disappointing. First of all, you must know that Australians are very limited by the area they live in, and because the population is relatively small you will only have a limited amount of money to put into that area. Secondly, Australians lack innovation. Aussies are curious, but very conservative in their habits and actions. It means that if you are planning to start something from scratch, new to that area, you need to have a very good supply of money, to keep your business going until it becomes well known, and starts profiting.
The typical Australian business person is notorious for its competition and protection of its area of action. Syndicates, Government and Unions, tell everybody that we are in free trade, but the reality is just the opposite. The so called regulations, protect many professions in a way that makes it very difficult to get a slice of the cake. Everything is made " to protect the Australian worker" from overseas competition. The result is a strong economy, but a long way from being dynamic. Let's leave big business and Multinationals aside, and only talk about small enterprises.
A friend of
mine, decided to open a frozen meal shop after marketing research told him the area was lacking in this service. The menu was made based on age, different nationalities living in the area, and the low purchasing power of the local (400 thousand) population. 200 different dishes were available to the public, with foods from all parts of Asia, Europe, England, Australia, Italy, Greece, Russia, Mexico, South America, Africa and China. The price was AU$ 5.00 for each 600gr high quality meal. The result was catastrophic. People started only buying English and Australian dishes. Nothing else was in demand. Why not? Simple dear Watson, the population was from low income, right? So they didn't want to risk their short supply of money on food they might not like or had never heard of. The few dishes that he was selling well, were about the same as the ones sold in the supermarket for $1.50 less. Conclusion: be very careful when planning a business in
Australia, the first thing you have to ask is... How can I be sure that this product has a guaranteed demand. If you can not be sure, don't do it.
For the past 6 years I've seen many business coming and going, but the ones that are still around are simply a variation of another business that already exists and has been very successful. There is nothing new around. The other solution is to buy one of these "successful" businesses and pray for the accountancy to be accurate. One more thing... for anything you do or buy; you are going to need a license to run it, apart from the registration to do it.
Examples
of Business for sale advertised in the Newspapers
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Cleaning
- Husband & Wife can earn $ 77,000 p.a. 51/2 day week Well established, 2 vehicles included. $ 79,000 o.n.o.
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Restaurant / Cafe
-Terrific central location in Broadbeach, alfresco area, modern plant. Lic. Very appealing at: $ 165,000 or nearest offer w.i.w.o.
Contracts: They work the same as in many parts of the world. In Australia every contract made, has to pay a " Stamp Duty" to become registered. It is a percentage of the contract value. Examples; Lease Contracts, Business Contracts, Rent Contracts. It is important to tell your Lawyer, to make it negotiable. That means you can sell to another person just like you sell your car and jump out of the deal with money in your pocket. The only exception is with work contracts. Also, there are people whose main business is to deal exclusively with contracts. For example: A cleaning company gets many cleaning contract for supermarkets, schools and restaurants. As soon as it becomes very profitable, you can sell the school cleaning contract to another person. Supposing the contract is for 30 thousand dollars per year during 5 years, you sell it for $60 thousand and profit from it. Contracts are also a very important source of income when you need cash from a bank. It is a guarantee of payment.
Lawyers are fundamental when doing a contract in Australia.
Subcontracting: The majority of Australian Companies have already understood the benefits of subcontracting. Instead of doing everything by yourself, the idea is to split specific tasks with other companies and increase productivity. Some good examples of this are: big bakeries and gourmet bakeries in the shopping Centres. They don't do everything. They subcontract to a smaller company to make the cakes, another company to do the sweets, again another to do the pies, and these subcontracted companies will receive a profit of whatever product of theirs is sold.
Buying and Selling a Business in Australia: Most Australian Business are bought in plain productive form, already with a fixed clientele. It is much cheaper to adapt an existing business than create and built a new one. As a result, the scene is ever changing in the cities; today an Asian restaurant will become Italian tomorrow. The other motivation is the value and profit you can get if you run the business well. For example: If you buy a restaurant for AU$ 50,000 then you change some things, add more products and sell it for twice as much as you bought it for. It means that your restaurant is now worth AU$ 100,000. If you made this progress in one year, you received an extra $50,000 to put in you bank and start all over again. The people who deal with these businesses are also the Real Estate Agents and you can find them in every suburb of every city. When buying a business you need to check the books with the help of an Accountant, and the contract itself, with help
from a Lawyer. To make sure the business is profiting in the same way the accountancy paper says, the best thing you can do is ask the seller if you can stay with him/her for a week to check the accuracy of the figures they have given you.
Immigration: The Government of Australia, allows a person or family that pretends to make an investment in a business, (of a certain value, and for a certain period) to apply for immigration. For more information check with the Australian Embassy or Consulate in your country or with a Registered Migration Agent. |
