Security Business for Sale Australia: 7 Things to Consider Before Buying
Introduction
When Buying a Security Guard Business for sale, it is important to consider the following to ensure you are buying the right security company for sale.
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Why are they Selling
Finding out the reasons why the vendor is selling their security company is one of the most important questions you need to ask or know.
Some vendors sell their security guard business for the following reasons:
- Retirement; the person is looking to retire
- They are looking to change the kind of business they do.
- Loss of Interest in the security business
- Vendor is being forced out by Industry or Government Regulator
- Vendor hasn’t traded, and they think it is best to sell a shell company and License
- Looking to flip and make extra profit
- Business is running at a loss
- Loss of contracts etc.
The above are a few reasons why a vendor might decide to put-up their security guard business for sale.
Take note; some vendors might not tell you the true reason why they are selling. But knowing why they are exiting might help you decide whether you are buying the right security business.
Also, See:
Ultimate Security Guard Business Start-up Package (Master License)
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The Right Security Company for Sale Price
Does this company:
- Have a favourable, clean community profile (No negative PR online or among staff/guards)
- Do they have a website (how many visitors does the website attract per month)
- Do they have a robust presence online [AKA good SEO]
- Is this security business for sale operating in the correct Country or State that you want to trade
- Do they have all the state licenses in which you want to operate in
- Have they got enough manpower’ call register’ that you can use the service prospecting contracts you want to bring on onboard
- What are they charging their current clients
- Are there any outstanding legal issues against this company
- Will this security business align with or serve your vision and interests?
You need to check the asking price, ask the right question’s, and decide if this security business for sale is right for you.
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History/Payroll
Checking the company history, especially the payroll history, is very important. You don’t want to buy a company you are not fully aware if they have the below issues:
- They owe their current staff monies.
- If their current or past security staff have taken them to the Wage Tribunal due to underpayment issues
- Whether they are paying the correct Government approved wages
- Have all employee retirement/superannuation been paid?
Knowing the above and any other company liabilities beforehand is important. This will help you determine whether to buy it at the current asking price, bargain further or best to let go. You don’t want to buy a debt.
Also, See:
Mega Security Company Starter-Pack (Compliance Documents)
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Outstanding Debts/Liabilities
You might need to get your accountant to check the Payroll and Accounting Books of this company.
You want to make sure the following are in order:
- Leases paperwork
- Office Rental
- They do not owe staff wages and entitlement.
- They do not owe Suppliers
- They do not owe subcontractors
- No outstanding fines
- Workers’ Compensation is all ok
- Public Liability Insurance is in order
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Contracts:
When presented with the sale price of the security business. Ask for the Profit and Loss and other accounting documents/statements. It is essential you check:
- What contracts do they currently have
- The amount charged to the client will it meet the business running cost and cover the security guards’ wages as stipulated by Government Wage Ombudsman ( Fair Work)
- What is the current duration of the contract?
- What is the likelihood they will retain these contracts?
- What is the vendor’s current relationship status with the contracted clients?
- If they don’t have current contracts, will they consider reducing their asking price.
The more written contracts and length of the contract which the vendor has the better for the purchaser, and it will help you determine the value of the business and Return on Investment (ROI).
Also see;
Hotel Quarantine Security Company Liquidated
- Compliance Licensing
Every security business for sale should have a current security business license. It is important you check if this License is valid and hasn’t been cancelled.
Also, check if license has all the activity that you want to operate-in. i.e.Unarmed Guard, Crowd Control, Bodyguard, Armedguard etc.
Take note; some vendors might be selling a business that has the following issues:
- They have been issued with a license cancellation notice by the Authorities.
- Their License has expired.
- Or They don’t even have a license, just a registered company.
Ensure you do a due diligence on all compliance tickets and licenses associated with the business.
Also, See:
Starting your own security company in Australia
- Sale by Shares or Asset Sale
Finally, you have to determine whether you want to complete this security business sale transaction via ‘Share Sale’ OR Asset Sale.’
To learn more about; ‘Share Sale’ OR Asset Sale.’ Read the following article Below:
About the Autor: Job Moses is an expert in the Australian Security Guard Industry with the following additional experience:
- Help Security Business Start-up (with close to 100 security businesses supported to start their operations)
- Help client facilitate their security business sales (not a broker)
- Security guard services operations and Business Development.
Job Moses has authored the Book “Security Adventure Service” and has written numerous Security Policies, Training Manuals and Compliant Documents that have supported multiple security companies around the World.
If you are looking for a third-party security guard business sale consultant who can help with the following:
- Vet Security company that you want to buy
- Looking to buy security business (we can recommend you to sellers)
- Looking to Start your own security guard business
- Develop your security operations
Please get in touch with us for our consulting services pricing:
Email: info@securityconcepts.com.au
Phone: 043 411 44 73
