If you got a busniess-newbie buyer like immigrants from China, high turnover figures could be appealing to them. the cost to setup a shop is pretty low compared to their asking price. They just setup the shop for sale to get capital gain which is tax free. at same time they can still claim for low-income allowance from work and income like childcare subsidy, accomodation allowance, tax refunds etc.
simple business cases:(real case, but figure and name has changed for confidential reason)
A--from India
B- potential buyer (normally immigrants or has less business knowledge)
A set up a small shop @ the original site of an old dairy shop which has been closed over 5 years, with a cost of merely $30,000. There is a another dairy shop which located around 10 min's walking distance. (population, traffic, residential population income level will not disclosed here)
A's strategy is selling tobacoo and cigs on his cost of good sold which is : how much he bought from the wholesaler+gst is equal to his selling price. Milk and bread is slightly higher than normal price but the customer can get a 20% discount if he bought milk+bread combo. Groceries and the others r selling at a recommended retail price. After 6 monthes of running the business, he has successfully got a customer base who knows that A's shop is famous for cheap tobacco and cigs. however his income from business is quite low due to his "strategy". Then he puts his ad for sale on local newspapers or busniess for sale website with a asking price of $150,000. advertising that his turnover is XXXXX and is still booming etc. when he got some potential buyers enquires A ezilly found an business newbie who doenst have too much business knowledge in new zealand or somebody who is totally no idea of retail business for $100,000 or something between his asking price.
1. the capital gain from selling the business is tax free so his gain from selling the busienss is tax free.
2. during the period of running the business, A can still claim his car's expense or living expense as part of business expense, refund of gst, can still get some government allowances as accomodation allowance, childcare subsidy, working for families from IRD etc...
3. When A sold the business and get the cash, he will move on to next target, keep it going..
4. As to B, will be a hot patato to go. anyway they are rich guyes.. lol
When you know this you will understand.lol作者: gsy110 时间: 2011-10-5 10:53:43