19/04/2010 by info.

Uncertainty is often a reason given for people not making long term plans, they delay making investment decisions, don’t start businesses and wait to see the outcome of world events.

Some people may be awaiting the outcome of the Election and perhaps may delay making a decision if there is a hung parliament, as they don’t know what that might mean to their plans. Although evidence has shown that businesses still make profits and grow regardless of the government and their politics.

The volcano eruption of Eyjafjallajokull in April 2010 is creating uncertainly within the tourist and business community however life still needs to go on and the airlines loss is the trains, taxis and ferries companies’ gains. Supermarkets may not be able to fly exotic fruit in but it does not affect local suppliers.

The recession was an excuse for people not buying businesses however I have spoken to numerous business people in the last couple of weeks who have shown me that their businesses turnover during the recession has demonstrated linear and or exponential growth, during the whole of the period of the recession. Recession, what recession they say!

Their businesses are doing so well, they need to slow them down so they can grow at a reasonable rate and manage the growth!

It just goes to show that the best businesses will always do well, and if a business has survived the recession and has done well during the recession then there is absolutely no reason to worry about buying it due to lower demand nor worry about short term uncertainty in the world such as a change in government.

Posted in The Economy, General | 2 Comments »

06/04/2010 by info.

Why are certain people successful in business and others are not?

The different is their risk taking and decision making abilities; it is this that separates an entrepreneur from common people. Successful business people ignore the fear and trust their ability to make the right decision. It is important therefore that when faced with fear in your business, that you make a decision quickly.

Procrastinators lose in business not because they delay making decision but because they end up not making a decision at all.

The primary reason for not making any decision is that they are fearful of the outcome and they would rather continue on the current path - even if the current path were losing them money.

I see this all the time when people are looking at buying and selling a business; I am called in to value a business and am told by the owner that they want to think about it. In other words they are scared of making that decision to sell.

The same thing happens with buyers, even though they are presented with a great opportunity they will delay that decision to go ahead.

Of course no decision at all is a decision because the answer ultimately is NO. If you are in that situation remember you will not be successful in business if you say NO all the time.

Posted in Selling Your Business, Buyers, General | No Comments »

24/03/2010 by info.

I was talking to an entrepreneur yesterday who told me that his goal for starting a business was to simply sell it. Which is a little bit different from the goals of the vast majority of the people who start a business, most people simply want to establish an income.

This entrepreneurs strategy is to start is business chipping away at a market leaders market share in a niche market and to act as an irritant to his competitor so that sooner or later they will pay him to get him out of the market. They will buy his business, and they will pay handsomely. The strategy seemed to work as he had sold a few businesses and was a millionaire.

What perhaps most people do not realise is that often it is a larger business and competitor that is the prime candidate for buying your business.

If selling to a competitor is the strategy you think is best for your business, it’s preferable to engage the services of a professional business transfer agent, who has experience in assessing the interest and motives of these competitors.

They may obtain client lists, be able to gauge your financial strength, or your motives for selling, you could be giving them information that may harm your business.

So you might want to start thinking about which company may wish to buy your business or in thinking about your business strategy is there any way that you could become an irritant to your competitor so that they pay you effectively to disappear?

Posted in Selling Your Business, General | 1 Comment »

16/03/2010 by info.

The best time to sell your business is when your business is doing well. But this is exactly when most business owners have the hardest time letting go of their business.

Your dream is to build a successful and profitable business, so to you it might seem illogical to walk away. If things are going so well, you might ask, why should I sell when I am making good money?

The reason is that this is the exact time when you are likely to receive offers in excess of its value.

For the best restaurant in town, best public house, or electrical contractor it is more likely that more than one buyer would show interest, and increased demand equals an increased price.

When the business starts to slow down and turnover reduces you would be unlikely to achieve that figure it will be some time before it regains its previous value if ever. If there is only one buyer who is likely to buy your business the fact is that they can name their price.

Too many times business owners wait too long before trying to realise their hard work, don’t let it happen to you.

There are great opportunities to successfully sell a business right now and maximize your investment.

Even if your sales are currently flat, don’t misread that as a bad sign. If your business is holding its own–or if sales are slightly up consider it good news in this economy.

There is a market for your good business.

Posted in Selling Your Business | No Comments »

01/03/2010 by info.

So you want to exit your business and you want the highest possible price for it. The bad news is that you have messed up on the best way of achieving a high price, that is via planning your exit strategy, it would now take a few years of changing the way you conduct business to achieve that price.

So what do you do?

One option is to instruct honest agents such as BCMS Corporate who can achieve times more than a seller would by instructing a “normal” business agent, but they will probably want an upfront before they can help you. They effectively spend time grooming your business. Or my agency Horizon Business Agents but I will be honest with my assessment of your chances of obtaining your high price.

Can’t make that investment or dont want to instruct Horizon Business Agents, then the decision is easy, you instruct the agent who tells you that they can achieve the highest price for you and accept their terms.

There are plenty of examples of business transfer agents who have become seemingly very successful out of achieving higher prices than their competitors because they claim that they are different in the way they will market your business.

RTA business consultants are one of those, however after many complaints and investigations they have been exposed. The Federation of Small Businesses are listing their services as a possible scam and warning their members against using them. They, overvalue to fool business owners into signing a sole selling rights contract, take money upfront, and demand an exit fee. They then wait for that client to sell via other methods and then sue in the courts for their commission. Ex clients have now set up a website to help and warn other business owners against using their services.

Recently Horizon Business Agents failed to gain a client in London because a Corporate Finance Business claimed to the client that they could achieve a much higher price for their business.

The fact is that greed amongst business owners is feeding this beast, when it comes to selling your business an entrepreneurs common sense deserts them. Comments are made in retrospect such as “I didn’t actually think my business WAS worth that amount of money however if they tell me that it is who am I to disagree.”

In building the general rule is measure twice cut once. Our advice when selling your business is, give the agent enough time to sell your business and think twice, sign on the dotted line once, and don’t fall for the agent who simply claims they can achieve a higher price for you as you may be feeding the scammer.

Posted in Selling Your Business, Business transfer agents | 1 Comment »

26/02/2010 by info.

Your employees ARE your major asset and the main reason why you have goodwill to sell, and if you have been a good employer then you will have run your business with half an eye on your staff’s welfare. So breaking the news to your employees is one of the most difficult elements of selling your business.

So how should you deal with this issue?

You could wait until the very last minute to tell your staff when contracts have been exchanged, or you could address the subject and state the obvious at the earliest opportunity – that, based on your personal situation, that you have given some thought to selling, but that nothing is imminent.

This basically comes under the heading of dealing with change management as a change in boss will clearly affect your employees in one way or another. Redundancy may be on the cards, perhaps promotion it the new boss will not have a hands on approach to running the business, almost certainly there will be a difference management style.

Change management entails thoughtful planning and sensitive implementation, and above all, consultation with, and involvement of, the people affected by the changes.

Our recommendation would be, when you place your business on the market there is no point in rocking the boat and creating uncertainly in peoples lives over something that MIGHT happen in the future, after all it may take a year or so for you to find a buyer. So you shouldn’t tell your employees en mass.

It is only when a deal has been reached in principle and negotiations have reached an advanced stage where the effect on your employees will be known they should be told.

The new owners will certainly want to be involved in this process, and will be in a position to scotch the rumour mill and tell their new employees whether anything is likely to change, otherwise they will be in a position of losing their major asset, and all the goodwill they have purchased.

Posted in Selling Your Business, General | No Comments »

11/02/2010 by info.

150 years ago there was no need for the services of a business transfer agent. As if you wanted to sell your business in your town or village then the probability was that you simply transferred your business to your son, and it didn’t really matter what price you obtained for it. Alternatively you might sell it to someone you knew in the village and took the best offer that came your way.

A business contact told me that his father was a business agent in the 1950’s. His marketing strategy was to travel to Cornwall, look for local business owners who wanted to sell their businesses, and then travel back to London where he would advertise these businesses to London residents. The idea was that the alternative buyer in London might have been willing to pay a little more than the local buyer.

The fact is that the wider the marketing exposure is to potential buyers the more choice a seller is likely to have, it is simply a case of simple economic supply and demand.

If a buyer relies entirely on personal contacts generally speaking they will not find that person who is willing to pay a little more for their business. But that is the big issue, often sellers will still look for the easiest option and offer the business to their employee, a customer or a business contact rather than try to maximise the selling price. In other words they will market their business the same way it was done 150 years ago, the market over the last 150 years has changed essentially due buyers mobility and technology.

A business transfer agent now brings that marketing into the 21st Century, and advertises literally to the whole world. It may take a little longer to find that buyer however the seller is likely to be able to obtain a higher selling price than using a Victorian approach to selling.

Posted in Selling Your Business, Business transfer agents, General | No Comments »

10/02/2010 by info.

Many readers will answer that they have a business; after all they are self-employed and perhaps have their own Company.

But can a buyer buy your business and carry on running your business at the same profitability level.

You see, many peoples businesses are based around their own skill set or personal contacts, remove the owner from the business and if affects the business.

What they have is not business goodwill but personal goodwill and if they were to sell their business then their business contacts that used their business because they trusted that person might wish to look elsewhere, because no one can do it like the owner.

Many small businesses can be sold for up to two years profitability, so how can you ensure that you get paid that £40,000 -£50,000 for exiting your business?

The answer lies in creating a brand for your business and ensuring that it can be run without you.

The main criterion for assessing whether you have a business or a job is looking at what happens to your business when you go on holiday.

If your business has to stop trading then you have created a job for yourself not a business and to be able to sell your business you will need to make changes.

Posted in Selling Your Business, General | No Comments »