15/05/2009 by info.

Business owners wanting to sell their business sometimes approach me but try to hide the real reason why they want to sell. Being that is that their business is not doing well.

They are evasive about providing recent financial figures, and do not mention the fact that their sales have reduced. Sometimes want unrealistic amounts for that business on the basis that they need a certain figure to pay off their debts.

It is always better to be honest, and to inform your agent that the business is in financial trouble, allowing your agent to present your business in a different way. As certain people are always looking for businesses they can turn around. Just look at the number of businesses in administration that find new owners and survive in some form or another.

Okay, so your business is not doing well and you don’t have the working capital to run it anymore. That does not necessarily mean that it is not of substantial value to someone else though!

You may have a particularly skilled workforce, access to a difficult to penetrate market, valuable patents, a good and respected brand name, perhaps an excellent location for retail premises. These factors or any combination of others could make the purchase of your business a very attractive proposition to someone, if you could find the right person.

The important issue here is to be honest with your agent and proposed buyer, as then you may have a great chance of selling your business. Rather than to try to market it as a strong business opportunity only to be found out later to be hiding the truth an experienced agent will still be able to identify some strength in you business and also to be upfront about the negatives.

You cannot deceive buyers about the true state of your businesses finances, but there is no reason whatsoever why you cannot emphasize the better aspects of your business, and what is more important show how these aspects could be of benefit to a potential purchaser, which is the main thing that he or she will be interested in.

This point is worth repeating over and over again do not try and hide the truth from the market, there may still be a buyer for your business, but if you are not honest to your agent you have no chance of finding the right buyer.

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13/05/2009 by info.

If you want to watch football you should not expect to find an important match being played in July, as it is the off-season. The most important time in a football season is - well now.

There is also a season for selling businesses, and if you put your business on the market in October do not be surprised if the number of people looking to buy your business at that time of year is lower.

In other words you should be planning for the sale of your business now, and have it on the market in the next few weeks if you want to sell this season.

The worst offenders is businesses in the tourist industry, I often hear Guest House owners, and owners of other businesses reliant on the tourist trade say, “I will make a decision as see how I feel about selling my business at the end of the season”. The news for them is that they will have missed the boat.

I’m not sure how many people reading this have been to Scarborough, a traditional Northern English seaside resort, during the summer it is packed with visitors, during the Winter all I can say is you had better have a warm coat to cut out the bitter wind from the North Sea.

You can imagine a business buyer walking along the sea front in January thinking that they cannot possibly see how the business that interests them can have the declared turnover. The result is that the buyer ensures that the seller has to start another season.

So if you have a seasonal business, do yourself a favour try and sell it when it looks busy, you will be able to obtain a much higher price.

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11/05/2009 by info.

Almost unnoticed the FSE100 the share price index of the UK’s largest companies has increased by nearly a third since mid March 2009.

What does this mean in layman’s language, well it means that the value of these companies has increased by nearly a third in a couple of months. Great news if you or your financial advisor recognised the bottom of the market, this however indicates that the worst of the recession is over for these companies.

An increase in the share price means an increase in the value of the company, which indicates that the profitability of that company is increasing.

I would doubt whether the value of these companies were actually that low as markets tend to overshoot as the masses overreact to circumstances.

At the first sign of swine flu the share price of British Airways fell by 20%, I tweeted at the time that surely the value of the company has not decreased by that figure, what has happened? Well the share price has recovered to its previous level after the fear fell away.

The property market in the UK is about at its long-term real house price trend value; however expect the value of property to fall further as the market overshoots due to continued fear. By Winter 2009 you will see real property bargains.

For the prospective small business owner what does it mean? Well now is your chance to make money by buying a business before the masses recognise that the bottom of the recession has been reached as in the few months time by the time that your purchase has completed the recession will be over and you will be best placed to start making money.

The purpose of this is to show that you can take advantage of other people’s overreaction or as Warren Buffett has been quoted as saying, “Be fearful when others are greedy and greedy when others are fearful”

Perhaps now is the best time to be greedy before others do.

Posted in Buyers, The Economy, General | No Comments »