Category: Business

5 questions to ask your business broker

If you’re selecting a business broker for the sale of your business, there are specific things you need to know. Most business owners don’t sell their business very frequently, and therefore, it is easy to become “out of touch” with the business sales industry. If you’re new to the market and feeling a bit unsettled, here are five things to ask your business broker that can help to put your mind as ease.

1. References

When meeting a business broker, think of it like a job interview. As they would in a job interview, the candidates should be expected to provide references. Ask the brokers you speak with to provide recent testimonials or letters from vendors that can attest to their performance.

If you would like to see some of ABBA Groups recent testimonials you can do so here.

2. Past performance

Like many aspects of everyday life – past performance is the best predictor of future behaviour. We hold this belief with our staff, partners, family members and even corporate brands. The same applies to business brokers. A broker who has been in the industry for many years and only has a few sales is not nearly as active or successful as a broker who has hundreds of campaigns under their belt.

As former senior sales executives with over 14 years’ experience in business brokerage, ABBA Group’s team of business sales agents know exactly how to secure you the best possible sale price – and the most favourable contract terms possible.

3. Question their market knowledge

It is likely you will listen to numerous presentations before selecting a business broker, and if they are all good – it can be hard to decide who to choose. Market knowledge is an excellent indicator of how well prepared a broker is to handle the sale of your business. A solid understanding and awareness of other businesses for sale in the area can often make up for a broker lacking a track record. Every business broker starts somewhere. If you are in conversation with a broker who has just started in the industry, their enthusiasm and commitment to understanding and interpreting local business sales stats and market conditions could be a good measurement of their overall skill.

The team at ABBA Group have represented corporates and individuals in over $500 million worth of acquisitions, divestments, and mergers since 2016. Our track record has been consistent through all economic conditions and transcends all industry sectors.

4. Ask questions that matter to you

When interviewing multiple business brokers, they are likely to come prepared with a presentation. These presentations will cover a lot of information and should give you a decent impression of the broker’s sales skills, personality, and background. However, if you have any questions that concern you, don’t be afraid to bring them up.

When working with ABBA Group, we move into your world – in every possible way.

We invest time to ensure we fully understand your position, objectives, and options. And because the world of acquisitions and divestments is complex, we always communicate simply and without the jargon. We’ll never leave you feeling overwhelmed or confused. We will always encourage you to bring up any concerns you may have and allow us to put your mind at ease.

5. What marketing should you undertake?

Some business brokers will choose to review advertising strategies and costs at the outset. It may seem uncomfortable to discuss dollar figures so early in the relationship, but it is important. Understanding these costs and strategies will not only give you an indication of their marketing knowledge, but it will also prepare you for the practical implications of running a campaign to sell your business. At the end of the day, the business broker you select will have a great impact on the sale of your business, so make sure you are completely prepared. Ask advice from family and friends if need be.

Unlike other business brokers/business sales agents, ABBA Group advertises your business thoroughly across a vast network of overseas and local business sales websites. Our extensive listing process ensures your business is part of a global network of active buyers looking to immediately purchase quality Australian businesses across a wide range of industries. This is what we like to refer to as: “The ABBA Group Advantage”.

If you’re still unsure, you can register as a seller on the ABBA Group website and speak confidentially with one of our expert business brokers at no-cost and allow them to answer any questions you have.

Top 10 Business Commandments to Running a Successful Car Wash

Owning a car wash can be tough work. Keeping track of employees, advertising, updating social media and making sure your equipment is providing the best achievable wash, just to name a few obligations. It doesn’t matter if you are operating a single in bay automatic or a 12-meter tunnel – the following tips for success remain the same.

1. Concentrate on providing both value and speed – customers who use automatic car washes are wanting to have their vehicle adequately cleaned in the quickest time probable.

2. Keep your business spotless and well preserved – your site should never look dirty. As a matter of fact, the site should appear as clean as possible to express how much satisfaction you take in presenting your business. Therefore, you should avoid damaged paint, damaged equipment and accumulation of dirt, sludge or mould.

3. Distinct signage, good lighting & professional cameras – advertise your offers, great value and promotions with coherent, to the point signage. Inviting lighting is a brilliant marketing tool and will additionally make your customers feel safe and comfortable. Good quality cameras are also a must.

4. Make sure equipment is not too complicated for customers to use – while you may use the equipment daily, your clients do not. If equipment is confusing or overwhelming (i.e., difficult to access wash bays, triggers on hoses that get stuck) it is likely that customers will not return.

5. Don’t overwhelm customers with wash options – your clients will want options, but not too many. Research suggests that having too many choices causes people to feel intimidated and confused. It is recommended to have no more than 3 selections for your automatic car wash – remove the cheap, budget wash and watch your profits flourish.

6. Preserving and servicing your equipment – Car wash equipment costs a substantial amount of money, so it is beneficial to service your equipment regularly to avoid needless breakdowns or repairs. Downtime means loss for your business.

7. Ensure your chemical distribution is precise – particularly significant for a touchless car wash, however also applicable to any car wash. Organising test washes and making adjustments to chemicals often is essential.

8. Forming a connection with customers – building and upholding a relationship with your clients is crucial for repeat business. Call upon your employees and their customer service skills and use targeted social media posts to communicate how much you value your client’s business.

9. Dedicated employees – your employees need to be able to collaborate with your brand and offers. They should embrace the businesses values. It is imperative that all staff are trained to have a comprehensive knowledge of the equipment and the product distribution.

10. Compelling deals and promotions – keep your existing customers excited, and entice new customers, by offering new and inviting deals. Discount codes, social media giveaways and Unlimited Wash Clubs are all great ways to keep customers interested and coming back.

Regardless of how active you are in the business on an everyday level, if you ensure you put into practice the 10 Business Commandments listed above, you are sure to have yourself a popular car wash that the locals will love to visit.

For more information about buying a car wash business in Australia, please visit:
www.abbacarwashsales.com.au/buy-car-wash-business-australia-car-wash-business-brokers/

How to buy a car wash business in Australia

The convenience of a car wash has been enticing more Australians than ever in recent years. Below is some advice on purchasing the right business to capitalise on strong, steady demand.

The car wash and detailing industry has been performing well in recent years. People are becoming more and more environmentally aware of not only water usage and restrictions, but also the possible damaging effects of water pollution caused by water run off when washing cars in residential areas. This has seen more vehicle owners choose third-party car washing alternatives and driven annual growth of around 2.5%1.

However, there is more to successfully managing a car wash than simply grabbing a sponge and bucket and getting to work. This guide describes the several varieties of car wash and suggests advice about purchasing an established business, in which you procure a fitted-out location, qualified staff, functioning equipment and everything else you need to make money from your first day on site.

Selecting goals

What style of car wash would you like – and can afford – to buy? You can swiftly generate a shortlist of businesses you may be interested in by looking at the car washes that ABBA Group has available on sites such as BusinessesForSale.com. Once you have browsed the available businesses you can create a shortlist according to your budget and preferences.

What kind of car wash?

Predominantly automatic operations can handle more customers – and generate more revenue – in a specified time frame, when compared to their manual counterparts. As well as offering larger margins, they are less labour-intensive, however, do occur some maintenance costs which you would need to consider.

The self-service design similarly cuts labour costs but inflicts inconvenience on the customer.

For all the appeals of automation, hand car washes do still thrive and succeed.

Businesses that are superior in car detailing – polishing, waxing and paintwork repair as well as a standard clean – can be appealing options too. Clients on higher incomes and car dealerships looking to improve resale value can offer a steady source of rewarding custom.

The least expensive option is the mobile car wash: this is where a van fitted with cleaning equipment travels to businesses and people’s homes to save them the effort of driving to a car wash.

Should you consider a franchise?

Although the car wash industry model is less complicated than in many other sectors, a franchise can make this even easier for you. A reputable franchise will assist you in the set-up of the business, give you training following a proven formula, deliver continuing support and run marketing campaigns. Car wash franchise brands active in Australia include WashTec, Magic Hand, Geowash, IMO Car Wash and Car Care.

Look at the business evaluation

Car washes are primarily valued by looking at profits over multiple years – increased by an industry standard ratio – as well as the value of property, land and equipment.

The location is essential

A car wash relies heavily on its location. To gauge a location’s desirability, you need to investigate how much traffic the road bears on a regular day. When visiting a business that you are interested in, observe the traffic for a while.

Having a car wash located near a heavily populated area is beneficial for instances when vehicle owners realise their car needs to be washed quickly. As they would pass the business frequently, they would know where to go, and know they don’t have to travel far. Another major location plus is being situated on the same site as a petrol station. As motorists have to periodically stop here anyway, they may be likely to use your services.

Have a look at the range of businesses that ABBA Group has available to buy in your area, or, even, other parts of the country. The more conscious you are of what is available, the more likely you are to find the car wash with the right location for you.

Consider the surrounding competition

The size of the car wash is another important consideration. How many cars can the business service at once? If the car wash is working well below capacity, then there is opportunity for increasing revenues – subject to the barriers to attracting more customers.

Before buying a business, it is essential to determine how much competition there is in the vicinity. You will need to compare speed, quality and prices of these competitors to the car wash you are looking to buy. Ex car wash owner and author of So You Want to Own a Car wash Steve Gaudreau advises that you “identify on a map all of the competition within a five-mile radius and determine what their trade area is, what your natural trade area is, and understand where there is an overlay.2”

If opponents have a competitive advantage, you will need to contemplate the time, effort and investment that it would take to bridge the gap. The business you are interested in will become a more or less attractive proposition depending on your conclusions – unless of course you are content with the present income levels.

Due diligence is an important aspect of buying a business

Once a contract to purchase a business is settled in principle, a period of due diligence should be commenced. This is your opportunity to confirm that information about the business delivered by the seller stands up to scrutiny.

Due diligence involves a comprehensive investigation of the properties, accounts, employees, brand reputation and other elements influencing the asking price. Financial statements are not reliable measurements of genuine income in an industry where a lot of cash goes through the register. You will need to form your sales numbers based on sales reports produced by the computerised, point-of-sale cash register.

Talk to the experts

It is worthwhile to request the guidance of professional experts in business acquisitions – notably lawyers, accountants and business brokers. They can assist you with obtaining funding, business evaluation, acquiring and inspecting paperwork, negotiations, due diligence and settling the deal.

For more information about buying a car wash business in Australia, please visit:
www.abbacarwashsales.com.au/buy-car-wash-business-australia-car-wash-business-brokers/

1 https://www.prowash.com.au/resources/b6f06323-224f-4dd9-b163-7ad46c0c7ac2.pdf

How to sell a car wash business in Australia

Selling a car wash business is one of the most important decisions you will likely make as a business owner, one that will make a significant impact on your financial future, but before you begin the process to sell your car wash business, It is worth having a well-defined exit strategy in place for when you’re ready to start advertising your car wash business for sale.

Whether you are looking to sell an old carwash business or sell a modern new car wash business, no matter what your circumstances are, there are steps you can take that will assist in making the process run more smoothly, and with the right advise more profitable for you as a business owner.

Call in the professionals

ABBA Group are the experts when it comes to buying and selling businesses and understand how to sell a car wash in Australia. Having a business broker by your side will allow you to be accustomed to critical information about certain aspects of the selling process and make the experience smoother and less stressful.

Businesses brokers such as the team at ABBA Group will assist you with preparing your business for sale right through to signing the final sales agreement.

Timing is key

It is prudent that you start preparing to sell your business as soon as you decide that it is time to move on. Selling a business can often be a lengthy and complex process, often taking six months or longer. Therefore, unless you are fortunate enough to have a reliable friend or family member prepared to take over, the sooner you begin proceedings, the better.

Have a car wash business valued

Car wash business valuations are usually valued by multiples of gross yearly returns, EBITDA, or for businesses with larger than average profitability, the business’s reputation or goodwill will be a factor as well. Car washes that have been running for some time with a good return rate, therefore, are generally valued by means of the capitalised excess earnings method, which takes into account goodwill as well as physical assets such as properties and equipment.

For newer car washes, particularly those rapidly gaining momentum, discounted cash flow may be a successful tool, as you can reveal the value of a business to potential buyers based on your earnings forecast and risk assessment.

The most profitable option for your particular business will be best established by your business broker or other business valuation professional.

Make your business stand out and get buyers excited

Once you have decided to sell and are starting to prepare for sale, you will need to examine your business objectively and select what assets to highlight and what flaws need fixing – without spending more than you can recover from a higher asking price.

It is a good idea to put yourself in the shoes of a prospective buyer visiting your business. Is there any machinery that needs fixing or replacing – and is it worth the expenditure when considering the possible influence on the buyer’s perception? Could you find a less expensive chemical supplier? Are your books in order and is all paperwork neat and ready to access? A genuine and serious buyer will want access to appropriate information without unwarranted delay. Good bookkeeping is frequently overlooked in the car wash industry, however, legible and accurate paperwork is essential, as you will likely have a hard time selling your business with an asking price based on vague financials.

Installing a water reclaiming system if you don’t already have one can boost your eco-credentials and reduce water bills, but more importantly and from a customer point of view, is your car wash as clean and neat as can rationally be anticipated? Washing or changing dirty or aging signage is another low-cost way to improve curb appeal and increase the sales price of your car wash business.

To receive the best buying price possible, your car wash business has to be well-organized and run smoothly. Most importantly, you need to ensure the transaction process is easy for the buyer.

Spreading the word

You are finally ready to start getting the word out that you are moving on. However, unlike how you would advertise selling a house, you will want to advertise your business discreetly and without too much elaboration. This is to avoid your regular customers discovering you are moving on and doubting your commitment to delivering outstanding service.

Let your business run itself

Buyers will often look for a business which is able to run itself, as this is one of the best types of business to purchase. Once your business is able to function efficiently even when you’re not around, you are on the right track to a successful sale.

Luckily, the car wash industry model is moderately straightforward and car washes flourish within a bustling location, competitive prices and capable, thorough employees (and equipment), rather than the owners’ charm.

Therefore, it is a good idea to take a step back and encourage your managers to take on the more mundane tasks to display to the buyer that the business can prosper without you.

You can also reassure the buyer that they will be able to continue your success by detailing the processes involved – such as maintenance timetables, the employee roster system, point-of-sale, how to order stock and so on.

A few ways to find buyers for your car wash are:

· Buying an ad in the local newspaper or in a trade publication.

· If you are happy to disclose to your employees you are selling, you may find a potential buyer within the business – i.e, an employee might wish to buy you out. You can also approach business contacts or even friends or family members.

· Through a professional business broker agency, such as:  www.abbacarwashsales.com.au

· When selling through ABBA Group, we will advertise your business thoroughly across a vast network of overseas and local business sales websites.

This includes:

• 17 Local/Australian business for sale listing websites
• 28 Overseas business for sale listing websites
• ABBA Group’s established buyer-database of business professionals, high level corporates and investors.

If your business isn’t listed on ALL of these platforms, you are not reaching all potential buyers.

ABBA Group’s extensive listing process ensures your business is part of a global network of active buyers looking to immediately purchase car wash businesses in Australia.

If you’re debating whether to buy a franchise or an independent business, you’re certainly not alone.

Having been in the broking industry for many, many years, ABBA Group has encountered an endless number of clients asking for advice on this.

There is no one size fits all solution but there are some factors to consider that will help you make the right decision.

Franchise vs. independent business

There are similarities and differences between franchises and independent businesses.

Individuals who leave corporate jobs after spending years in them prefer franchises. This is because they’re used to working in a structured way knowing that tasks will be executed in a specific way. Individuals who also prefer some order and documented systems and processes tend to lean more towards franchises.

Individuals who like to do things their way and prefer to not be directed on what to do with their business will opt for an independent venture. There’s absolutely nothing wrong with either of the two – you just need to know where you fit best.

Franchise businesses can be found in a variety of industries so you can usually compare any type of independent business with a franchise one, ranging from tech to interior design to transport based ventures. You can compare the cash flow statements of the two businesses and objectively gauge their performances.

Some people choose to set up businesses and franchise them using independent franchisors. This option however is generally considered to be quite risky compared to buying an established franchise or buying an independent startup. However, presented with a decision between starting a business from scratch to franchise and starting an independent one, the franchise option would be the easiest and safest bet.

A franchisor will normally assume the duty of market surveying to establish the viability of setting up shop at your chosen location. They will also avail themselves to respond to any of your concerns, offer training while requiring regular reports.

When deciding between a franchise and an independent business, be sure to compare them using a similar set of financial records. In both cases, royalties and other expenses will be deducted from the income, allowing you to assess their adjusted cash flows.

Compared to an independent business, purchasing a franchise means that you’re buying a business from a proven franchise, and the franchise fee is recorded as an asset to your business. The franchiser will also protect your business, meaning they will not allow another franchisee to set up shop in your territory. An independent business will have most perks that come with a franchise except with barriers to entry.

So, to franchise or not?

Before you decide, check out ABBA Group’s business listings (both franchise and independent) on our website and contact us today to learn more from one of our friendly brokers.

Franchising is an arrangement where one party allows another to use its systems, processes, name and trademark to conduct business.

A person buying a franchise will normally go for a brand that has been around for some time, is well established and will potentially exist for the foreseeable future. But what then happens if the franchise you choose for isn’t yielding the anticipated returns? Or what if the growth rate is slower than you projected? ABBA Group typically advises our clients who are looking to boost their franchise returns to diversify – wisely. While diversifying is an old concept assumed to be obvious to most franchise investors, there are key steps that many people tend to miss. Below we have compiled a simple guide to help you to diversify your multi-unit franchise portfolio without compromising any of them.

Step 1: Carve out a niche

Before adding any new brands to your portfolio, it may be wise to examine yourself as an investor. You want to ensure that you figure out what you’re passionate about and will enjoy getting behind. But that doesn’t mean that architects should only invest in architect-related

franchises. To the contrary, you may be an accountant but enjoy working in the hospitality or the sporting sectors.

Finding your personal sweet spot will ensure that you remain motivated, both as an investor and from a personal perspective.

Step 2: Carefully evaluate brands

It’s not enough to invest in the food industry because you have great culinary skills. After identifying what works for you, it is crucial to evaluate market brands to find one that’s actually going to be profitable to invest in.

The market is full of attractive franchises but you need to look beyond the bells and whistle and carefully evaluate each one.

For starters, you want to keep an eye out for established brands with solid growth and consistent leadership. Such brands will have a proven track record. An example would be Australia’s Food Co, having been around for over 30 years now and an owner of some of the region’s leading cafe franchises including Dreamy Donuts, Jamaica Blue and Muffin Break.

Whichever field you choose to invest in, don’t be afraid to aim for the market leaders. Remember, brands that are already successful will have a clear growth strategy.

Step 3: Balance between emotional and finance driven investing

When diversifying your multi-franchise portfolio, be careful not to invest with your heart but your calculator. First-time franchisees tend to make the mistake of investing in a brand simply because it appeals to them. While your heart may tell you to follow your passion, the financial side must add up too. Business decisions should not be emotional but analytical if they are to lead to success.

Ensure that you fully understand the business side of any franchise you plan to invest in regardless of the “greatness” of its product or service. The numbers must be able to sustain a reasonable return on investment or you risk getting burnt.

Step 4: Get the right team

If you own multiple franchises, delegating will help you to succeed. First, you need to have the right people in the right positions.

Look to hire people who share the brand’s vision and mission – a team that believes in a business will be willing to learn as much as they can about how it operates and will be able to take on duties that would normally be your responsibility. This will free up some time for you to be able to focus on all your brands.

The bottom line

Diversifying your portfolio is a no-brainer which presents lots of options to choose from. However, actually understanding how investing in multiple brands works is critical if you’re going to succeed. Look out for brands in your specific areas of interest and narrow down the list to what suits your lifestyle and business goals best.

Once you have a shortlist of the preferred brands you would like to partner with as a franchisee, contact the team at ABBA Group and we will put you in contact with the right people immediately.

If you’re looking to buy a business, identifying the right business to buy can be a daunting process and care must be taken to ensure that you get maximum value for money while reducing your hidden costs. That means that before you agree on a deal with a business seller, you’ll need to take into consideration all the additional expenses and hidden costs on top of the purchase price. Whether you’re a regular or a first-time business buyer, read on about possible additional expenses you may incur and don’t get caught out with any hidden costs when buying a business in Australia.

Refurbishment

If the business was not running efficiently, you may need to consider updating inventories and assets to get the business back on track and making a profit. If the business is a franchise, you may be given a list of specifications for refitting a premise before launch. It’s therefore important to ensure that you fully understand what’s required of you and how much it will cost before agreeing to buying a business.

Other associated expenses to take into account here include machine or vehicle maintenance, leasing or machinery replacement costs, and other hidden costs that are related to buying a business.

Staffing

Employing the right people to help you drive your business forward is not something you want to consider sometime down the track. You want to make sure that you’re aware of what it will take to recruit and train new staff. Even if the business will be retaining some employees from the previous owner, you may want to come in with new methods and systems – all of which will cost time and money.

Marketing

Your new business will require constant marketing from the start. You’ll therefore need to set aside upfront marketing fees as you seek to establish yourself in the market as the new owner, while also attracting new clientele.

Marketing costs may include the printing of banners and new signage, in-store branding or re-branding, and other online marketing tools.

Compliance

Compliance means that after buying a business, your business is protected from breaking the law by ensuring registrations and licenses are up to date. You’ll need to register the business name that you’ll be using to trade along with other certifications and licenses.

Depending on your industry, compliance may also include obtaining a Food Act registration, import permits and/or insurance. Ensure that you factor in all these hidden costs as you consider and final your new business purchase.

Professional services

Professionals help you to get the most of your business deals. From a sale agreement to business valuations to scouting for businesses to buy, you want to make sure that you set aside enough resources and time to be able to leverage the expertise of various professionals. Try to balance between expertise and affordability even as you look to save as much money as possible.

To learn more about potential hidden costs when buying a business, talk to a professional business broker. As a leading business brokerage firm with a transaction record spanning more than $500 million worth of deals, ABBA Group is ready to assist you in buying the right business at the right price. Email or talk to us today.

When planning to finance a business purchase, it is important to understand the different ways you can acquire funding and also what type of finance is best suited for your business. While buying a company can be less risky especially if it’s already doing well, you’ll most likely part with a lot more to acquire it. Businesses can be financed either through debt or equity and should you choose to purchase a business through financing, this article will explain the options available to you.

Debt financing

At its simplest, debt financing is money lent to a company by an external financier. These include banks, credit companies, credit unions and building societies. Borrowings sourced from financial institutions attract interest and penalties apply if repayments are late.

Terms of the loan will vary depending on your source of financing. For example, loans from family or relatives will most likely attract less to no interest. But at the same time, they could affect your relationship with the individuals.

With debt financing, you don’t have to give up a stake in your business and the interest paid can be deducted against your taxes.

The loan needs to be repaid regardless of how well or not your business is doing. Some lenders will also impose high interest rates on borrowed amounts so care should be taken to only go with fairly rated facilities.

Vendor financing

Also known as owner or seller financing, vendor financing occurs when a business seller also lends cash as part of the buying price. The buyer basically accepts an IOU from the seller. This type of transaction is common where the amount that the buyer is willing to offer does not meet the seller’s price.

Vendor financing is crucial when the buyer is unable to meet the full cost of buying a business without having to break the bank or borrow additional funds. If you’re especially unable to access financing, this could be a great alternative for bridging the financial gap.

A vendor finance agreement is normally prepared to capture the nature of the transaction using details such as the amount being borrowed, the rate of interest, repayment period, security instrument, and more.

The biggest downside to this mode of financing is that not every seller will be willing to vendor-finance. The interest rates involved can also be unfairly set as they are determined by the seller.

Equity financing

Lastly, there is equity financing. As the name suggests, this mode of financing involves injecting money into a business in exchange for a stake in it. The loan doesn’t have to be repaid as the lender will be taking a part of your profits.

It is common for equity finances to be sourced from relatives, friends, or private investors.

The best thing about it is that the incoming stakeholder can be beneficial to your business, depending on their skill set, experience or industry connections. That means that when sourcing for equity finances, it’s probably wise to go for a strategic partner that will offer much more than just money.

As with the first two options, there are downsides to equity financing. One of them is ownership sharing obligation. This results in splitting your business profits as long as the lender’s money remains in your business. If you prefer total control of your business including decision-making, you may want to by pass the equity mode of financing.

Figure out what works for you

Your business financing decision today will impact your new business for years to come. Before settling on a financing option, make sure that you’re fully aware of all the products available to you and talk to a specialist for guidance.

ABBA Group prides itself in offering sound business financing advice to its clients as well as a range of lucrative business listings all over Australia. Reach out to one of our experienced brokers for a one-on-one chat today. Our team is dedicated to seeing you through your business ownership journey from start to end.

Starting up a new business or buying an existing business, which way is right for you? 

Deciding on whether to buy an existing business or start a new business from scratch hinges around personal and financial issues, but one thing is certain, an existing business that is already established has already undergone and put procedures in place to survive various challenges when compared to the relatively unknown challenges you will face when starting a new business. Accordingly, buying an existing business is often much more profitable in the long run when compared to starting a new business.

On the other hand, if you do decide to start a new business, a new venture can be pretty exciting, with a lot of great things to look forward to including forging a team, building a relationship with incoming customers, coming up with new ways to promote your products or services, and more. But securing finance for a new start-up business can often be difficult when compared to buying an existing business.

So, which way should you go?

To buy or not to buy?

The truth is that when most people visualise owning a business, they instantly think to start a new business, but starting from the ground-up will mean that you’ll need to build a customer base from scratch, hire staff, market your idea, and more, without any track record to rely on. But if you dread dealing with challenges around starting a new entity, you may be better off buying an existing one.

Acquiring a new business means taking over the operations of a working company – with existing cash flow and profits. With it, you get an existing team that is familiar with the business operations as well as an active customer base. And if you like, you don’t necessarily have to reinvent the wheel including creating company policies and procedures, control systems, and a mission statement since all that already exists.

However, buying a business will also have its fair share of challenges. For instance, it will cost you more to buy an existing entity than to start one. Sellers will factor in things such as revenue potential, existing clients, and business assets into the selling price, raising it higher. On the bright side, you’re likely to get financing for such a purchase as it has a track record for lenders to refer to. Owning an existing business may also grant you certain benefits including copyrights and patents, legal rights, which boost valuation figures and profits.

With a business purchase, you can also never be too sure of what you’ve actually paid for. Of course, an expert broker will help you navigate such pitfalls, otherwise, you could get stuck with outdated systems, uncooperative employees, or obsolete stock.

When purchasing a business, ask the owner some critical questions: Why is the business up for sale? What is the industry outlook like? Can the business secure a large enough market share to thrive? How has the product line evolved over time? These questions will grant you a fair understanding of the past, current, and future prospects of the business.

So, which way for you? Start a new business, or buy an existing business? Honestly, it all depends on your personal financial standing, personal preferences and needs. It will also depends on your finances, passion, and window of opportunity. If you’ve minimal time at hand, you probably want to engage a broker and discuss with them the possibility of buying an existing business. A broker such as ABBA Group boasts a global network of business acquisitions and disposals spanning more than $500 million, backed with a team of highly-experienced experts.

 

Think you’re ready to talk about your business acquisition needs? Talk to one of our representatives today. ABBA Group has you covered with a team of highly specialised and well-networked business brokers, you’re assured of expert guidance and advice from start to finish. Get in touch with us today.

For a while now, you’ve been planning to invest in buying the business of your dreams. Thanks to your resilience, vision, and passion, it’s time to make your move as an entrepreneur towards making your dreams a reality.

Buying a business worth thousands or millions of dollars can be a difficult choice to make. Those selling their businesses will have often be emotionally attached to them, while others will simply believe their ideas are worth much more than the market is willing to pay for them. These factors can result in inflated prices for businesses that are for sale. Whichever scenario you are faced with, you want to make sure that when the ideal time arrives for you to buy a business, you strike the best deal possible, getting the most value for your money.

Before finalising a deal, here are some tips to keep front of mind:

Tip #1. Decide on what you’re looking for

Buying a business is an important decision which will impact your life for many years to come. There are a few important things that you’ll need to consider when acquiring a business including location, size of the business and the industry.

Ask yourself these simple questions to ensure you make the right decision:

· Would you move or are you looking for something close to home?

· Do you prefer buying a small, medium or large company?

· What areas/industries are you passionate about?

· What are your business strengths and skills?

Answering these questions will help you narrow down the choice of what to buy and help you towards landing your dream business.

 

Tip #2. Consider engaging a broker

Once you’ve created a clear picture of what is required when buying a business, next is to do your ground work well. Here, you want to have a full list of all businesses that match your specifications and are available for sale. You may opt to check the local business listing sites. However, if you still can’t seem to find exactly what you’re looking for, the easiest way is to work with a registered broker. Brokers will filter businesses according to your needs and pull up a few great deals for you.

ABBA Group is a registered and reputable firm for buying businesses locally and overseas with a track record of over $500 million worth of acquisitions, divestments and mergers since 2016.

 

Tip #3. Complete your due diligence and close the transaction

Upon identifying a good business either through a broker or an online listing, you want to complete a due diligence to make sure everything checks out. Businesses that look perfect on the surface may have serious underlying issues. If dealing with a broker, talk to them and iron out any concerns you may have before inking a deal.

Once satisfied, go ahead and arrange for the purchase funds. Funding may range from self financing to angel investing or a business loan. Depending on the source, ensure that funds are ready upon settling on your purchase.

Of course buying a business entails more than these three simple steps. However, the important things to have in mind are understanding exactly what you need, proper research or working with the right broker, and lastly, doing your own due diligence before writing that seller a cheque.

If you’re looking to cut through the red tape associated with acquiring a business in Australia or overseas, ABBA Group has you covered. With a team of highly specialised and well-networked brokers, you’re assured of expert guidance and advice from start to finish. Get in touch with us today.

Ok so you’ve acquired a business, but now what? Running a new business can be both exciting and daunting at the same time, especially when you’re only just starting out, but it can also be a very rewarding experience once all the hard work begins to pay off.

As a new business owner you may be left wondering what to do after buying an existing business, but really there are only 5 things to do after buying a business, especially if the business has been recently acquired. After all, it can be easy to get caught up in all the work that goes into undertaking a new venture, which also means it can be easy to make mistakes.

With that said, here are five important things to do after buying a business to ensure you don’t end up mismanaging your newly acquired business.

1 | Create a Solid Business Plan

First things first, you need to create a solid plan for your newly acquired business. This is one of the top things most new business owners regret not doing and the reason it is critical is because it can help a business owner avoid making impulsive decisions.

Impulsive and unplanned decisions can end up costing more than what should have been spent had they had a solid plan in place. New business owners needing assistance with business plans can look into ABBA Groups’ business acquisitions service. ABBA can assist with the business acquisition process from start to finish including creating a solid business plan.

 

2 | Avoid Spending Too Much on Advertising

Spending too much on advertising is a common mistake many new business owners make. Sure, it might be tempting to spend a lot on advertising as it might help garner more customers – and some media outlets might convince you to spend more with them as well.

However, it can also be easy to spend far too much than what you have allocated for advertising as TV and radio ads can be so convincing once presented. Moreover, you might end up finding yourself earning less than what the media predicted.

There are other avenues you can use to promote awareness of your new business which can be even more effective than traditional paid advertising methods. This can be in the form of becoming more active in your local community or by fostering connections with people who can spread the word for you.

Perhaps one of the most important things every successful business needs is its own well-designed and easy-to-use website. If the business does not already have a website, or the current website just isn’t working as it should, allocating funds in your marketing budget towards a website would be a smart business decision.

 

3 | Be Aware of your Products’ Pricing

No one wants to over pay for anything, so it’s important to be aware of your products value and price it correctly. The great news is that if you bought a business that’s been doing well, all you need to do is to continue on the same successful path.

Suppliers can help you on this front as they can give you some guidelines on how to price your products, so neither you nor your customers are getting the short end of the stick.

Furthermore, keep in mind that you if you lower prices so people will buy more of your product, this will often negatively impact your profits. The smart thing to do is ensure your products are priced correctly and competitively over the longer term.

Also keep in mind how much you’re spending on purchasing stock and at what point you will break even. After all, if you’re selling lower than you should, you might be losing more money than what you’re making.

 

4 | Learn How to Prioritise

As mentioned, writing down and having a solid business plan can help you make the right decisions for your venture as well as avoid common mistakes experienced by new business owners.

However, keep in mind that even the most carefully crafted plans can go wrong. After all, you can’t possibly take into account everything that might happen, however hard you try. Therefore, problems may arise if you find yourself facing a challenge that you didn’t account for.

In this case, the best thing to do is to learn how to prioritise the most important aspects of your business. This may mean making the hard decision to only work on the problem that needs your immediate attention and put off the rest until you have managed your current crisis.

 

5 | Find a Skilled Accountant

One aspect that many new business owners neglect is the paperwork involved in running a business. They may know what they need to do and what they want to do for a successful operation, but the books are often overlooked.

In this regard, you will need to look for a skilled accountant to help you set up your business’s accounts. However, depending on just how knowledgeable you are about bookkeeping, you may opt to hire the accountant full-time.

Nevertheless, it’s still important for you to learn every aspect of your business, especially the paperwork behind it. You don’t need to be an expert but simply take some time to be aware of the how your business operates.

Consider using the services of a broker such as ABBA Group who offer an an end-to-end business acquisition service. ABBA Group can facilitate a number of related services to ensure a seamless and successful business acquisition, including preparing a business plan, advising on tax and overseeing the entire handover process.

Running a business can be difficult sometimes but it does not need to be daunting, even if you have never owned a business before. The key to a successful business acquisition is to create a plan, have a budget and stick to it, know how your business operates and learn how to prioritise. These things can help you become more successful in your new venture.

If you need support, the team at the ABBA Group are waiting to assist you. They have a wide network and an experienced team of professional brokers that will assist you whether you are planning to buy or sell a business.

Decided to sell your business? Here’s what happens next

You’ve made the decision to sell your business and whether it’s been an agonising one or a decision that came easily, from this point on, there are a few things you can expect to happen. Read on to learn more about the steps involved in listing your business and selling your business.

Selling a business can be a complicated process. You need to continue to manage the business and ensure it not only continues to operate smoothly but also that it continues to maintain reported revenue. This won’t leave you with much time to dedicate to sell your business, not in a way that will present the business professionally, maximise your sale price and contract terms. At this point, it’s a good idea to talk to a business broker who can handle everything on your behalf.

You may already have a business broker in mind, perhaps someone you bought your current business from. If not, talk to business associates, your accountant, your lawyer, clients, even friends or family and get some recommendations.

The sales process

Once you’ve found a business broker, the selling process can really begin. Firstly, your business broker needs to know and understand everything about your business so that he or she can market it in the best possible light. You need to gather information relating to your business operations and financials so that your broker can compile it to present to potential buyers. The document your broker will compile is called an Information Memorandum or ‘IM’. 

During this part of the sales process, your broker should undertake a valuation of your business. This will set the price tag of your business when it hits the open market and it needs to be fair to both you, and potential buyers. If your broker does not offer a valuation service you need to get this done independently – it is a crucial part of the selling process!

Once the price is right, your business will be listed for sale and marketing it can begin. Your broker will create the agreed marketing materials for you to approve and authorise. A good broker will reach out to their existing contacts when they know of someone looking to purchase a business like yours. A good broker will also have a network of advisory firms and be prepared to pick up the phone and call potential targets. At ABBA Group the process we follow is twofold. We work pro-actively and reactively. Our pro-active work involves identifying potential targets and approaching those targets. If it is a synergic acquisition the prospective purchaser is generally inclined to pay more to acquire.  

When a buyer enquires about your business, your broker will ensure that they sign a non-disclosure agreement before they release any details about your business to them. Your broker will introduce you to buyers that are serious and have been pre-qualified so that your time is not wasted. In addition, your broker will provide you with regular updates about what potential buyers are saying about your business – is the price too high? Why is it priced so low? Will the owner stay on for an agreed period of time? Will the business be affected with the transition? This buyer feedback is crucial during the sales process as it will allow you to work with your broker to make any necessary adjustments to marketing your business to ultimately reach your desired final sale price.

Once a buyer has been found, your broker will negotiate on your behalf. This includes both price and contract terms. Your broker will liaise with third parties throughout negotiations, including solicitors, accountants and landlords, keeping you informed along the way. This is especially important during the due diligence phase when a potential buyer and their advisory team will be doing their homework on your business. Your solicitor will prepare the Contract of Sale and will keep you informed of any changes, buyer concerns or requests along the way, right through to exchange and settlement. 

After your business has been sold, there are still a few things you need to take care of. Firstly, your staff. You might have chosen to keep the sale of your business private but now is finally the time to inform all employees that you have sold the business. The same applies to your suppliers and customers – let them know what has happened and how they may be impacted from this point on. Any training that was agreed to with the new owner as part of the sale needs to be scheduled or carried out and you also need to work through the agreed hand over period. An experienced and skilled business broker will be able to provide advice on all these points as well.

Throughout the sale of your business, whether that turns out to be a relatively short period of time or if it unfolds into a lengthy negotiation, keep in mind that even though you have decided to sell your business, your business still needs to operate efficiently and continue to perform as it always has. To ensure this happens, consider recruiting an experienced business broker to take care of selling your business for you.

Buying an existing business? What you need to know and do.

So you’ve made the decision to become your own boss and buy a business. While you’ve yet to identify what business that will be, one thing you do know is that you want to buy a business that’s already up and running. That’s the easy part done. Read on to learn more about what’s involved with buying an existing business.

To begin the process, there are a few questions you need to ask yourself that will help you along the path of finding and buying an existing business that will be right for you.

What sort of business do I want

Firstly, consider location. Where do you want to work? Is commuting an hour each way per day fine with you or do you prefer to work from home? Do you want to be close to home or are you open to moving? Would you consider an online business in which case location won’t matter? When thinking about these questions, keep in mind that location will go on to have an impact on employee numbers, labour costs, taxes and potential earnings.

Next, think about the size of the business. Are you looking for a small, family-run type of business or do you want to take over a large company and grow it further? When thinking about this, consider the implications of small versus large – that is, a larger business could mean larger profits but it will most likely also come with a heftier purchase price and not to mention more stress in both the buying process and the on-going operation of the business. A small business may be easier to take over but potential growth may also be small so consider whether you are ok with that or not.

Once you’ve nailed down location and size, it’s time to turn your thoughts to what do you want to actually be doing every day? Hospitality… automotive… printing…small goods… manufacturing… building… choosing an industry might be a no brainer for you if you have experience in a particular field but if you don’t, or you want to try something completely new, this can be a daunting decision. Start by identifying causes you are passionate about or hobbies you enjoy and are skilled at. Decide if you want a career that has high levels of people interaction or if you prefer to work autonomously. Answering these questions will help you get closer to choosing an industry you want to be part of.

Finally, think about what sort of lifestyle you want to have. Are you happy to travel lots, work late into the night, be outdoors most of the time or is 9 to 5 at a desk more your cup of tea? Whatever you prefer, remember that as the owner, the success of the business ultimately lies with you so if you cannot fulfil the demands of the job, its probably not the right fit for you.

The search for the right business

Now you have a clear picture of what you are looking for it’s time to do your homework. Research what businesses are available and a great way to kick this off is word of mouth. Ask friends and family if they know of a business for sale that would be suited. They may even be thinking of selling themselves in which case you’ve hit the jackpot! If it’s a small café you’re after and your local is somewhere you picture spending your days, there’s no harm in asking the owner if they want to sell. The more people you talk to and who know what you are looking for, the more chance you have of finding the right business sooner.

Another avenue to pursue in your search is your current business contacts. Extending the search area to them widens the options available. The wider your network, the more chance you have of hearing about a great business that is for sale.

You might also consider using the services of a professional business broker to help in your search. If you find that the above methods aren’t really getting you anywhere, a business broker can help in a number of ways. Firstly, a business broker will take your wishlist and pre-screen businesses on your behalf so you’ll only be presented with businesses that will fit your requirements. No time wasters please! A business broker may also have access to off-market opportunities that you otherwise would not find out about. Bring those on!

Once a business has been found, a business broker will also be able to negotiate on your behalf. You’ll benefit from removing yourself from what can often become an emotionally-driven purchase, especially if you have been searching for a long time and have finally identified a business you really want.

Seal the deal

Once you’ve found the business that is right for you, don’t get ahead of yourself and forget about your due diligence. A business may look great at first glance but unless you dive into the ins-and-outs of how it operates, you could get stung by making a poor choice.

If you are working with a business broker, they will help you through the due diligence process. Another advantage of using a business broker is they will be able to provide a professional valuation of the business.

If you are going it alone, have your solicitor and accountant by your side and an independent business valuer to help you assess the value and financial position of the business. Keep in mind that a professional business valuation will take into account the current owner’s impact on the value of the business and what could potentially happen to that value should he/she sell up. Your solicitor will guide you through the sales agreement and ensure you understand everything before you sign on the dotted line.

Open for business

While buying an existing business often costs a lot more than starting a business from scratch, it usually also comes with less risk. Financial information is there for you to view in black and white with an existing business rather than rough projections about potential profits with a start-up. An existing business may also come with an exciting patent or the opportunity to inject fresh ideas as well as your expertise that will take it to the next level. There’s no doubt that buying an existing business will impact your lifestyle and be a huge adjustment for you. With a sound transition plan, and the willingness to work hard, innovate and learn, buying an existing business might just be the best business decision you’ll ever make.

As a small business, a strong and memorable brand will continue to work for you long after the doors of your shop have closed for the day.

If you think of a large-scale business or corporation like Coca Cola, no doubt their brand will be front of mind. Not only does the company logo spring to mind, but so too do associations like cool, energetic, refreshing and fun. Their branding also evokes emotions and memories of warm summer nights, fun-filled family bbqs and holidays with friends by the beach. Coca Cola has branding down pat that’s for sure.

In the case of small businesses, branding can also work like it does for larger corporations, that is it can help the consumer to associate your business with a feeling, outcome or quality. Many small businesses don’t see themselves as a brand and that’s where they go wrong. Don’t overlook the importance and impact of strong branding because it can continue to work for you long after the doors of your shop have closed for the day.

What is branding?

First things first – branding is more than just creating a logo. A good brand goes beyond a logo. A good brand creates associations. If you run a small print-company, do you want to be known only as quick, cheap and low quality or do you want to be known as reliable, friendly and great value for money? The answer no doubt is the latter. If your brand makes people associate your business with these attributes they will be more likely to make a purchase from you.

Further, being reliable, friendly and great value for money makes the customer feel happy, satisfied and good about the purchase they’ve just made – these emotions will be stirred when the customer sees your brand and they will be more likely to return. In short, you want to create emotion when people see your brand because emotion drives purchasing decisions in most people.

Branding = Recognition

While branding goes beyond your logo, you should still put in the time, effort and money required to have a logo professionally designed. It needs to have impact, it needs to be memorable and it needs to make people feel how you want them to feel about your company. For example, if you are a company that makes and sells weight loss shakes, you want a logo that represents healthy living. A silhouette of a slim person running will do just that.

Branding beyond a logo

Creating a campaign, with your logo plastered all over it and your product or messaging at the forefront will go one step further to building a strong brand that people will remember for the right reasons.

Think of all the commercials on television and billboards you see advertising cars. They usually depict long, winding roads in the country, or traffic-free city driving and happy, stress-free drivers at the wheel with smiling passengers. Car manufacturers want you to associate their motor vehicle with feelings of happiness, and if emotions drive purchases, them consumers will want to buy a car that makes them feel happy.

If you are a smaller business, for example one that sells pet accessories, you wouldn’t use aggressive dogs or homeless cats in your campaign. You’d use well-looked after and groomed pooches, walking obediently with their owners and playing with children at the park. These images evoke feelings of happiness, creating positive family memories and promote pet cleanliness.

Branding increases value

Building a strong brand also goes a long way towards increasing the overall value of a business. A strong, recognizable brand is often developed over time – it doesn’t just happen overnight. A future buyer of your business will see the work that has gone into brand development and be excited by a strong brand in the marketplace. A strong brand is therefore an important asset that can increase the value and selling price of a business.

Branding attracts quality staff

People want to work for a company that has a positive image and produces high quality products or solutions. When staff feel like they are part of a successful team they will be happier and fulfilled with their job and inspired to meet the high quality and standards your business and brand stand for. A strong brand is essential for positive employee morale and productivity. For all these reasons, it is important that your employees are well versed in what your brand stands for and what the key attributes of your brand are.

Branding brings in new business

A strong brand that is memorable will bring in new business the old-fashioned way – word of mouth! If you’ve bought an amazing new set of golf clubs or a super comfortable baby carrier you’re highly likely to tell your friends and family about it. A brand that is memorable will go a long way towards bringing in new business without you having to spend any extra marketing dollars because happy consumers will do all the selling on your behalf.

Creating a point of difference

If you operate in a busy space, you need to stand out from the crowd. What do you offer consumers that your competitors don’t or can’t? Identify what that is and use it to your advantage. Incorporate it into your brand, logo and tagline. A strong brand will not only help consumers remember you over your competition, it will showcase that you offer more value, better quality, faster service – whatever it is you want to be known for.

Communicate your brand’s values

Values are hugely important in business today because people want to align with a business that shares similar values to their own or which are looked upon favourably by society at large. To identify your company’s values, start by writing down what’s important to you. For example, your business might place a huge emphasis on being environmentally friendly. In that case, you should let people know that your company aligns itself with this value and how you go about implementing it everyday, like using green energy in your office, only buying recycled paper or volunteering to clean up the local area. Letting people know that your business cares about the environment will help them associate this value with your brand.

Branding matters

Whether large or small, the businesses that are most likely to succeed are those that are memorable for the right reasons. If you are producing an amazing product or offering a high quality service don’t let yourself down by forgetting about your brand. Products and services will get the attention of consumers but a strong brand will ensure that they keep on coming back.

As a buyer looking to purchase a new business there will be a process you need to follow during your search and one of those will be to sign a non-disclosure agreement.

A business broker will usually request that you sign a non-disclosure agreement, also know as a confidentiality agreement, once a business you are interested in has been identified and before any confidential information relating to that business, such as financials, employee records, supplier agreements and lease contracts are provided to you.

A non-disclosure agreement basically prevents you as the buyer from revealing any information about the business you are interested in to any third parties. A non-disclosure agreement usually allows you to discuss information relating to a business with only your support team which might include your accountant, solicitor, the business broker involved in the transaction or a business partner. It protects the seller and their business from having confidential information relating to that business shared with anyone other than the prospective buyer.

The benefits of using a non-disclosure agreement

It is a good idea to sign a non-disclosure agreement before you look into purchasing a business and here are a few reasons why:

· The definition of ‘confidential information’ may be different to a seller and buyer and problems can arise because of this. To prevent any uncertainty, a non-disclosure agreement will clearly define what is classed as ‘confidential information’ so that all parties involved in the transaction know exactly what needs to be kept confidential. That may include trade secrets, a pending patent, profit and loss statements or any product samples made available during the course of a transaction. A non-disclosure agreement can include an extensive list of what information cannot be shared and be as specific as the seller wants it to be.

· If there is any breach of the conditions outlined in the non-disclosure agreement, that agreement will usually also include the consequences that will result from any breach. It will be very clear to all parties involved and provides the seller with a legal document to be able to take legal action should any breach occur.

· In many cases, when a buyer refuses to sign a non-disclosure agreement, preliminary discussions or due diligence cannot happen. So if you are genuinely interested in purchasing a business, you need to really consider signing a non-disclosure agreement or the deal will fall over even before it’s been put together.

· A non-disclosure agreement can also include a clause to protect any information about the buyer which that buyer does not want passed on to any third party. This way, everyone involved feels comfortable and open communication relating to the business can occur.

 

As a buyer, when you enquire with a business broker about a business they have listed for sale, one of the first things the business broker will ask you to do is to sign a non-disclosure agreement. You should view this as a positive move forward towards finding out all the crucial information which you need to know in order to make a well-informed decision about whether to purchase a business or not.

What are the Benefits?

A professional business valuation is a good idea whatever stage of business you are in, in other words not only when you are thinking of or about to sell. Getting your business professionally valued every 12 months will help you keep accurate records regarding the actual worth or value of your company. This information can be crucial when you do decide to sell and are asking for top dollar – you’ll have the facts and figures to back you up.

Before you embark on getting a business valuation assessment, remember that accuracy is important. You cannot estimate this or that because the end result will be based on guesswork rather than actual figures. So, ensure that your accounting practices are on point as specific numbers need to be gained from valuation processes. This will then assist in obtaining the proper insurance coverage, knowing what you need to reinvest in the company and how much you need to sell your company for (if you decide to) in order to still make a decent profit that you will be satisfied with.

If you have decided to sell you business, a professional valuation is worth its weight in gold. And if you want to get more bang for your buck from a business valuation, have one done every year for a few years prior to selling. A yearly business valuation will assist in displaying company growth and worth in terms of market competition and asset and income values.

Of course it may not always be possible to plan to sell in 2, 3 or 4 years time. Sometimes a sale may be necessary in a short period of time and a valuation in those circumstances will certainly also always be very useful, if not crucial to have.

However, if you have the luxury of knowing that you will sell in a few years time, a yearly business valuation allows you to monitor value yearly and see what steps you need to take to increase your company’s value before the next valuation is performed. Not only will this help to show company income and valuation growth over the previous years, it will also show potential buyers that the business has enjoyed regular, consistent growth thus supporting you in asking for a higher selling price.

Further to this, if you are able to demonstrate, through up-to-date and accurate financial statements, that your business is likely to be profitable in the future, you can demand a higher sell price for your business. This helps to give a prospective buyer an idea of the future profits that they may expect from your business in the future.

To estimate the future profit of your business, start by examining any trends in your business finances from recent years. A professional business valuation can also include trends of similar businesses in your industry to see how your business compares and how the market is travelling as a whole. You can then use this information during negotiations of the final sale price of your business.

There are other circumstances where a business valuation can also be beneficial, outside of when an owner decides to sell. These include;

· Dissolving a business relationship

If one or more partners in a business wants to leave, a professional business valuation can accurately identify each person’s monetary worth in the business, thus providing a fair value for that person or persons to be bought out.

· Making business decisions

When performing a business valuation, a valuer will take current market conditions into account. That being said, a business owner can then use a valuation as a decision-making tool. For instance, it can help to identify the ideal time to market their business and if that is not the present time, they can hold off on selling until the market changes.

· Manage the Management Team

A regular (yearly) business valuation is good business practice as it will help you as the owner to assess the performance of your Management Team. You will be able to see what facets of the business are performing well and if anything needs to be changed or modified. A valuation will help you focus your energy where the business needs it most.

As a business owner, you will have a general idea of what your business is worth, based upon simple data such as stock market value, total asset value and company bank account balances. A professional business valuation that reflects true company value is much more than these simple factors. It is a good idea to work with a reputable valuer to ensure the correct numbers are used and the right methods are applied. You will then be well-placed to not only run your business efficiently and profitability, but also to show the real value of your business to future potential buyers and investors.

How did you get into Business Broking?

Before entering into Business Broking I worked for ten years in retail with Virgin Group and then hospitality, owning and managing my own cafes in the Sydney CBD. Following the sale of my own small businesses, I was intrigued by the process of selling a business and wanted to learn more about it. So began my new career as a Business Broker. I haven’t looked back since!

In my time as a business broker, I have helped change the future of many businesses and the lives of many people. This is the part I have enjoyed the most – helping people fulfill their business and career goals.

I work across all industry sectors and love the variety this offers. Today, with an inspiring team beside me at ABBA Group, I am proud to be creating wealth for more and more clients every day.

When was ABBA Group formed?

ABBA Group was formed in 2015 when I saw a gap in the market for quality business broking services in the $1m+ market. I believe that businesses in this market require specialised knowledge and skills and so I focused on building a team with these attributes. I am proud of how far ABBA has come in a relatively short amount of time and even more proud that we have built a reputation of being ethical, honest and professional.

What is your role at ABBA Group?

I am the Managing Director of ABBA Group and lead a team of 20 business brokers.

I still enjoy managing deals – as a business broker there is nothing more rewarding that a signed contract and a happy client. These days however, my role also involves overseeing all the other deals which ABBA Business Brokers are working on. I’m here to guide them, give them advice on how to structure deals and ensure that every transaction runs smoothly.

What do you enjoy most about being a business broker?

Definitely meeting people from all walks of life. Today I might be talking to the owner of a multi-million dollar construction company who is looking to acquire a competitor and tomorrow, I might get a call from someone who is planning to sell a childcare business and is looking for a career change. The variety is endless and every client comes with their own unique set of needs, requirements and expectations. I enjoy the challenge of managing and meeting all of those needs.

What does a typical word day look like for you?

My word day commences when I start my morning commute from home to office – making or returning phone calls to clients. An important part of being a business broker is keeping clients informed and up-to-date so I take this opportunity in the morning to communicate with clients and keep deals that I am working on moving along in the right direction.

Once I’m in the office, I spend the first hour or so actioning any emails that require attention.

Following that, I am usually in an out of meetings for most of the day. I meet with clients, both new and existing and also with other ABBA business brokers. In my meetings with ABBA brokers, I offer advice on deals others are working on and help my team of brokers in any way i can, be that giving advice on how to structure a deal, manage a challenging client or source new business. Being a business broker requires a great deal of discipline and no two days are the same in the life of a business broker!

What sort of transactions does ABBA Group manage?

ABBA Business Brokers focus on transactions in the $1m+ market. Our team has sound knowledge across a wide range of industries and an extensive network of contacts to draw from.

We can help clients source a business to purchase or, if they already have one in mind, we can manage the acquisition process to ensure it runs smoothly. ABBA brokers also represent businesses for sale, managing everything from preparing an Information Memorandum to finding the right buyer and securing our clients the best deal possible.

ABBA also manages off-market projects, capital raising, business valuations, property consultation and can assist with business immigration as well.

What advice would you give someone just starting a career as a business broker?

Without a doubt, the hardest part of becoming a business broker in Australia is just starting out and having little or no income. Until that first commission comes in, it can be hard to keep focused and motivated.

This is a time when a new business broker must self-motivate. He or she has to be able to see the bigger picture and visualize their career one, five, 10 years down the track when the rewards will be coming in and they will be a success. I also tell new brokers to be patient and keep chipping away at those first few deals and they will soon be on their way to building a successful career. It is also important to learn the basics. Many brokers fail or walk away from a potentially rewarding career because they become disengaged from the basics. This includes learning how to negotiate, sell and build positive relationships with customers. Finally, and this is something I apply to all areas of my life, I would advise a new broker to act ethically and always be honest and up front in all dealings. This, above everything else, will help them build a positive reputation in the industry which will lead to a rewarding long-term career.

A business broker is an intermediary that connects a buyer and a seller and guides both parties towards reaching a favourable deal for everyone involved.

It can be an exciting and rewarding career path for those who possess the right attitude and skill set. There is no doubt that there aren’t many careers that allow you as much control over your own time and work environment as that of a business broker. Add to that no limitations on your earning capacity and working as a business broker becomes a very attractive career path.

Before you dive in and start ordering your new business cards, you need to learn what it takes to succeed as a business broker. Because, while there certainly are many selling points for this type of job, there are also some cons to be aware of. To be a successful broker, you need to be able to sell and sell well. The flip side of not being able to sell and sell well is having no income and, ultimately, no career.

So, how do you succeed as a business broker? First, learn the basics. Many brokers fail or walk away from a potentially rewarding career because they become disengaged from the basics. This includes focusing on four key areas: listings; customers; selling and negotiating and; professionalism.

1 | Listings

You need something to sell – a listing. This is the bread and butter of being a broker. Without listings your earning capacity is zero. There’s no secret to how to get listings – you have two options. First is face-to-face. Get out there in front of sellers and pitch yourself and convince a business owner to choose you over another business broker. Visit them more than once, be persistent but respectful and show them you will have their best interests at heart if they list with you.

Second, there is cold calling. Do not under estimate picking up the phone and talking to 10, 20, 50, 100 business owners – whatever it takes to secure that listing that will bring in the rewards. You don’t need all of them to say yes, you need a few quality listings that you know you can sell and sell well.

Quality v Quantity

The difference between a good broker who makes an average income and a great broker whose earnings are above average is quality listings. A good broker has 50 listings which are over-priced and lacking quality business information which a buyer looks for when assessing a business to purchase. These listings will sit idle for months with little to no activity because the broker has over promised the seller when it comes to the sale price and also the information that a buyer will ask for during the sales process, such as up to date financial information, a business forecast plan and documented processes is missing from the listing because the broker has not taken the time to gather it.

On the other end of the spectrum there are the great brokers. They have between 10 to 20 listings which have a realistic price tag and comprehensive information on a business’ systems, processes and financial records. These listings have a shorter shelf life because buyers will be lining up with offers. The end result for this broker is a greater income than the broker with the 50 average listings.

 

2 | Customers

A successful broker focuses on customers and building positive and productive business relationships with them. One way to do this goes back to the previous point regarding listings. Well managed listings that sell well equal satisfied customers. A satisfied customer is more likely to become a repeat customer and hence a broker will build a client base that will continue to bring in income well beyond the first deal that was done.

You also need to ensure that your interactions with your customer are always positive. This means being honest and up front with them, even when you may not always have good news. Ensuring that the communication between the two of you is always open and you keep your customer up to date every step of the way.

It is important here to remember that the seller is not your only customer. While you may be representing the seller in a deal, the buyer is someone that you should view as a potential future client. If you treat a buyer right during the sales process, and that includes being fair, honest and open in your communication with them also, then they may just keep in you mind when they one day decide to sell the business they just bought from you. And just like that, you’ve secured more income for yourself down the track.

 

3 | Selling and Negotiating

You’ve probably heard the term, ‘he could sell ice to an eskimo!’. This is the ultimate compliment you can pay to a business broker. While extreme, this saying lies at the core of what it means to be able to sell well. If you want to succeed as a business broker, you must have the skill and ability to convince people to buy what you have to offer.

Possessing sales skill involves making the potential buyer see what he or she stands to gain by buying your product and finally transforming the potential buyer into a keen buyer who is ready to sign a contract and make an immediate purchase. Part of selling is negotiating. While it would be nice and easy to have a buyer pay the listing price every time, it isn’t what happens in real life. You need to be ready to counter what a buyer offers by negotiating well but fairly and ultimately reaching a point where the buyer and seller agrees to terms that are favourable and acceptable to both parties.

 

4 | Professionalism

This may seem obvious, but many brokers fail because they lack professionalism when they are managing deals. Being professional in business includes acting with integrity, displaying fairness and being honest, ethical and up front. Having these values at the core of how you operate your business will ensure you gain the trust and respect of your customers, it will help your customers to succeed which ultimately means that you too will succeed.

In your career as a business broker you will be faced with many different types of deals, each of which will come with its own set of challenges and obstacles to overcome. If you are self-motivated to succeed and have a passion for sales you will thrive in such an environment and by focusing on the above four key areas – listings, customers, sales and negotiation skills and professionalism, you’ll be well placed to enjoy a long-term successful career.