John Denton - Preparing Businesses Ready For Sale

ONE One of anything! The numbers in a business are the instrument panel by which an owner should run his business. It still amazes me how many business owners I talk to have no idea and no interest in their numbers – until it is too late! That’s why there are many businesses out there with too many ONE’s in the business. ONE major client. Even with contracts in place there are many ways you can…

Before You Open Your Mouth

Before you open your mouth in a meeting, or in a conversation with someone at work or socially, consider applying this triple filter first! This has been attributed to Socrates and goes something like this;

In ancient Greece, Socrates was reputed to hold knowledge in high esteem. One day an acquaintance met the great philosopher and said, “Do you know what I just heard about your friend?”

“Hold…

Preparing A Business For Sale – A Legal Perspective

By Helen Kay of Rise Legal

It is important to be well prepared and organised well in advance of putting your business on the market for sale. This will not only avoid costly delays but could also maximise the value of your business.

Helen Kay from Commercial Law firm Rise Legal has provided some tips to assist you in preparing to sell your business….

Be clear on exactly what you are selling

If…

Which would YOU prefer; a nice relaxed retirement or litigation?

Sorry! Was that a bit blunt?

I'd rather stir business owners up now than let them find out TOO LATE that their business is not saleable or will not sell for the amount they need! Worse still, the business sale could end up in expensive and lengthy LITIGATION.

Sadly, TOO LATE and LITIGATION are all too common.

Selling a business privately or through a broker is a complex and lengthy process with many traps for the unwary owner to fall in to. Some of these can end up in litigation. What are some of the common mistakes owners make?

(1) I've had my business for 30 years it must be worth a $1 million WRONG! Whilst longevity is a factor it doesn't affect the market value very much.

(2) I'll just run an advertisement on the internet and buyers will stampede to my door! WRONG! You may get a lot of callers and waste hours dealing with them, however the best buyers don't come this way.

(3) It's a waste of money engaging a lawyer and using a sale agreement. I'll just write something up with the buyer. WRONG! You most definitely need a good lawyer involved to protect both parties and avoid litigation after the sale.

(4) My business is a simple one. As long as the buyer offers me the asking price that's all I need to agree. WRONG! There are numerous things that need to be discussed and agreed at the offer stage. Then everything needs to be in the buy / sell agreement before both parties sign. Failure to do this thoroughly can end up in litigation after the sale.

(5) That's it, we've signed the sale agreement so I can slow down now and book my flights to Bali! WRONG! The seller has an obligation to the buyer to keep running the business as they always have until settlement. Many sales fall through because of things which come out in due diligence! Sometimes the buyer will not get finance. It's not over until the money is in the bank! If you let the business slow down and then end up keeping it .......

(6) We don't need a Deed Of Restraint. There's no way I would go back in to a business like this. WRONG! Sellers almost always insist on a Dead Of Restraint to prevent the seller setting up in competition with the business after the sale.

(7) That's it. The money is in the bank and I'm out of here! PROBABLY WRONG! Most buyers will want a hand over period from the seller to make sure the transition is smooth and successful. Obviously this will depend upon the complexity of the business and the experience of the buyer, but don't underestimate how long you will need to 'hang around' for the handover.

This is just a very small list of the things that need to be dealt with when selling a business privately.

What can you do to avoid TOO LATE or LITIGATION?

Attend a half day seminars on preparing a business ready for sale CLICK HERE Join one of my business owner monthly mentoring groups CLICK HERE Engage me to coach you one on one CLICK HERE

I always recommend selling a business through a good reputable business broker where possible. Unfortunately, many brokers will not take on a small or medium business which may be difficult to sell or if the commission is low.

I am a former business broker and now dedicated to helping business owners prepare their businesses "ready for sale" - whether they want to sell or not, because a business that's ready for sale is well worth keeping!

I tried to sell a business privately and failed because I made all the mistakes! Then I learned the correct way from one of the best brokers in Australia. I then practiced as a broker with the firm that sold my business for 5 years. All of that learning and experience is the value add that I can bring to you!

This is a great article from my friend and associate, Ava Lucanus. If you want to retain and increase the life time value of a client, you need to be aware of 'touch points' ad 'moments of truth'. Read this article (click the headline above) and start ding the 7 tips!

Sorry for the long delay between posts. What with all the social media sites and my website and doing posts on their this blog has been a bit neglected.

Note to self: copy be called other posts to this blog as well. Watch out for more from me soon.

Regards,

Boris Bikes - Great Business Idea!

Occasionally I spot something and think “Gee, that’s a great business idea!”

That’s what went through my mind when I saw a business recently during a trip to London.

It impressed me because I thought what a great idea to reduce traffic congestion in a city centre. It has many other benefits too. For example, it is also helping to reduce pollution from motor vehicle exhausts whilst providing locals and visitors with an inexpensive, convenient and easy way to get around the city. This is what the business looks like…(see photo above)

Automated bike hire! (Knicknamed Boris bikes after Boris Johnson the Mayor of the City Of London) When you look at it as a business it ticks a lot of boxes. One of the biggest ticks for me is the fact that it runs without the business owner having to be there! It’s all done by some simple mechanics and machines to process credit card payments. People just serve themselves!

One of the key things about developing a business to a “ready for sale” state is making it independent of the owner. It’s an area many business owners struggle because they don’t systemise their business and they are reluctant to delegate. These two things are probably the top two reasons why business owners stay stuck in their business, and why it makes the business difficult to sell!

One of my consulting clients is making great progress in these areas and it’s great to see the staff taking up the challenge of the extra responsibilities. Often, as business owners we underestimate the abilities of our staff and their desire for my ‘meaningful work’! As they take on more work and responsibility it frees up the owner to work ON the business and less IN the business. All of which helps to grow the business, making it more valuable, and makes it more attractive to buyers.

Think! What would a new owner have to be able to do and be prepared to do, to replace you in the business? How easy or difficult would it be to find buyers like that?

Don't Blow Your Money When Trying To Sell A Business!

This will be a short post as I want to get it to you quickly. I have advised clients about this in the past but following a recent marketing campaign by a firm claiming to be business brokers, I thought I should re-post this message.

Basically, there are a few large corporations out there making claims to be business brokers and selling businesses via very expensive glossy advertising in magazines. Sometimes the company involved claiming to sell businesses has interests in the media publication involved.

Their Main Interest Is To Sell You Advertising - Not Sell A Business

Before you engage anyone to sell your business, check out the following;

Are they registered business brokers complying with Australian Government regulations?

Do they know and operate in your local market? That is, do they have an office in the state and people on the ground?

Did you get a written appraisal of your business or did you just 'agree a price'?

Can they give you names of business owners for whom they have sold businesses?

Just make sure you do your due diligence on anyone before you list with them and find out how they will go about selling your business, not just placing an expensive advertisement in a magazine. For detail about how the ACCC and the NSW Government view these people click the title to this post to see the reports. It includes a report from the Australian Government and an Australian Institute of Business Brokers press release.

On a slightly different topic - also beware 'online business evaluations'. Many of these are based in the USA and in any case are very basic and unlikely to reflect true local market values in your area.

To get the low down on valuing a business and preparing it for sale, attend one of my half day workshops. DETAILS HERE

Until next time - keep those numbers going up!

Hi Business Owners,

It’s almost the end of another financial year – well at least it is in Australia. The end of the year is a good opportunity for reviewing your business performance over the last year as well as setting strategies, goals and plans for the coming year.

One of the opportunities which is often overlooked, is the opportunity to restructure your chart of accounts in your accounting package. Why would you want to do that?

When I am asked to help a buyer who is looking at buying a business, the meeting is usually me asking a long series of questions. Many of the questions end up being questions which the buyer should be asking the seller in relation to the business and their reason for selling.

At the end of the meeting with the buyer, they  will often say “Thank you, now I know what I need to know and what questions I should ask”. Then I sit and wonder why they hadn’t thought of these seemingly obvious questions before. But of course, if you haven’t been through the process of buying a business before – then you don’t necessarily know what you need to know!

It’s all about asking the right questions to get the right information to be able to make the right decision FOR YOU! The trick is knowing what information you need!

There are some basic areas that you need to explore as a potential buyer and therefore areas as a seller which you need to have covered. These are.......

Obviously "key economic advisory group" members are NOT business owners in Perth CBD. According to the Business News headlines email today;

A congestion charge, where motorists pay to enter the central business district at peak times, should be introduced in Perth, a key economic advisory group has said. The West

Business owners in the Perth CBD are already complaining about the lack of parking discouraging people from coming in to the city. Add to this the fact that City Of Perth parking fees all go up by 20 cents an hour from July 1, and then if you add a congestion charge on to get in to the city - who is going to go in to Perth to shop, relax and spend money?

Given that the State Government are developing the river front and sinking the railway line between the CBD and Northbridge to encourage more people to come in to the city and spend time and money there - then a congestion charge would seem to be working against that.

If you are a business owner in the City of Perth - what do you think?

It's great when you spot a business which "sets high standards" and pays attention to detail. Here is a small and not serious sign of a business which doesn't pay attention to detail or train staff to maintain standards.

This table was set for three people! We all had a choice of style of glass we wanted to drink from! This quite funny example occurred in a very good cafe in a local shopping area.

This is a major supermarket and retail strip in a shopping centre in suburban Perth, at 1.00 pm on a Tuesday lunch time! And we're told by the Federal Government that WA and Perth is still booming. The economy is not just slowing - IT'S STOPPED! Well for these retailers it is.

I took these photos because I was so shocked to see this shopping centre so quiet at 1.00 pm on a Tuesday. I couldn't get over the lack of people at a normally busy time of the day. I could have driven my car in and parked it in the centre and not hit a soul!

When a prospective business buyer is looking at a business, an area which is becoming more and more important in their decision making is "marketing systems". Especially the social media marketing systems like the ones used by many larger businesses and corporations. 

More and more business owners and business professionals are using social networks to build relationships, meet new contacts, market themselves and grow their businesses.

For the uninitiated, however, diving into the "virtual meet-and-greet world" can be daunting. Where to begin? For first-time users, the answer is LinkedIn.

LinkedIn was developed specifically for business owners and professionals. The site doesn’t run the risk of mixing your professional life with your private one; and with more than 135 million users (3 million in Australia as at March 2012), it serves virtually every industry and profession.

Joining a network like LinkedIn is simple, but turning it into a powerful networking tool that promotes you and your business; well that takes some knowhow and experience. See details of our workshop CLICK HERE!

Do it right and LinkedIn can really lift your professional ‘online presence’ and set you and your business up as the “go to people” for whatever product or service you are selling. It's all about having an 'online presence' and being the person or business which comes up first in searches on the Internet. Become the authority and "go to business" for your area of expertise.

I am a partner in another business called Smarterworshops. Our business involves running practicable, hands on, done with you workshops where you get things done and come away with tangible outcomes. We DO NOT run fluffy feel good information workshops.

For example, with the upcoming Smarterworkshops “Hands On” Done With You LinkedIn Workshop participants will learn how to optimise their personal and business profile, promote their products and services, build a community of prospects ‘predisposed to do business with them and set themselves up as the “authority” in their field.

Want to know more, then CLICK HERE - or contact me.