16 minute read
Caitlin Mary
GET AN UNDERSTANDING OF THE DIGITAL SPACE BEFORE SELLING A BUSINESS.
LIZ WARD
Founder & CEO | Navii
www.navii.com.au
Liz is a committed advocate for innovation in marketing and distribution and recognised expert in strategy with more than 20 years experience specialising in travel and tourism. Liz has pioneered many first-time digital transformation initiatives that have had lasting impacts including starting up the Australian Tourism Data Warehouse (ATDW) and being its CEO for over ten years.
Author
Caitlin Mary Bsale Journalist
The digital space is everevolving and changing. Digital products, tools and services are released on a daily basis that can be utilised by business owners to help them grow. Ignoring these trends and new releases can be detrimental to an organisation's success. This can have an impact on the profitability, and ultimately the price they will achieve, when selling a business.
Bsale recently spoke with Liz Ward, the CEO and co-founder of Navii, a company dedicated to helping businesses use digital tools and systems to operate more efficiently.
The development of Navii came off the back of Liz’s personal experience working in the tourism industry. business called Tourism Tribe back in 2015, it tackled those problems of digital adoption for small business. 90% of the tourism industry are small businesses.”
Liz knew they could help more owners navigate the digital landscape.
“We always knew that the opportunity was there to do what we do with tourism for other business sectors.” After winning a Government Grant, Navii was launched in 2020 to assist small business owners.
When it comes time to sell a business the owner needs to be aware of the technology and tools available; if they are not yet implemented into their organisation, they need to look at why. When you are selling a business, you want to achieve the best possible price. After all, you worked hard to build your business. Technology, tools and services can lead to an increase in revenue and reduced expenses which ultimately increases the net profit of the business, thus a higher sale price.
HOW NAVII IS HELPING OWNERS
Navii is an Australian Governmentbacked, independent community of small business owners, industry and digital experts. Launched in November 2020, they assist owners in understanding the technology available and how it can help their organisation.
They help owners stay up-to-date with transformative technology and opportunities brought by changing markets. Through
education they can help owners to understand the technology faster and more efficiently.
“Small business is just such a huge part of our economy, so it just makes sense to try and make that easy for them, which is what we aim to do.”
“We’re able to offer a platform to be able to help them [small business] because it is something that is needed, those small businesses are being challenged by the number of technology opportunities available to them, and they’re finding it really hard to put the time into learning about them and adopting them.”
Sharing best practices and bringing together leaders in various industries enables Navii to assist owners in the best way possible.
Liz's previous experience in the tourism industry is what led to the development of Navii when she saw the struggles of business owners. Most tourism businesses in Australia are classed as small to medium enterprises, and regional towns often have older establishments that struggle to adapt to new technologies.
“It was just a passion point for me because I wanted to do something that helps these people because I could see how hard they work and mostly they get into it because of passion and lifestyle. Often it’s lifestyle that is the driver for starting or buying or owning a small business, it’s often not for the money but we want small businesses to be sustainable and to do really well.”
BUSINESS OWNERS LEARNT TO ADAPT DURING COVID.
The timing of the grant Navii received and Covid was uncanny, over the last two years business and consumers' digital literacy, competency and confidence have changed drastically due to Covid. These changes have been a widespread shift in business.
“You had this incredible growth in the use of video messaging people using zoom and Facebook messenger. People's confidence grew enormously. Paypal reported extraordinary, never before seen growth in what they call their ‘silver tech’ generation which is the over 50 - 75-year-olds downloading for the first time.”
“So it was this perfect storm of consumers from all age groups (and for the first time ever in the older age group) having the confidence and the necessity to use eCommerce and online payments and they were using social media video platforms and video platforms generally like never before.”
“There was a whole lot going on in the business world as well, this really interesting humanisation in certain sectors like finance, software and different types of companies that had their business or consumer customers under a lot of hardship so they had more empathy with their customers with extended payment terms or extended software licence terms or rental agreements and all these other things,” Liz said.
Customer service expectations were changing and “the whole bar has been lifted for business”. During Covid, there were incredible stories of businesses “pivoting with their products and business models”, while at the same time consumer expectations were going up. The expectation for both sides was lifted which means there are a lot of small businesses that were left behind to catch up.
THE NEED FOR DIGITAL LITERACY IN BUSINESS
Liz and Navii recognise the need for digital literacy and competency for businesses now more than ever, particularly as Australian organisations were below the benchmark average prior to Covid and now the benchmark is even higher.
“It’s not about digital literacy with the younger people, it’s about business strategy, they know how to use the apps or websites they’re not scared of breaking anything they just go for it. What they really appreciate [about Navii] is the business and digital strategy. Why am I doing this? What is the investment? What am I expecting to get out of it? It’s just part of business.”
“I think eventually we will get to the stage where we won’t put the word digital in front of marketing or business, it will just be marketing, it will just be business, but we’re not there yet. I think when we think about marketing now most people's minds now go to digital methods of marketing so we are getting there. We’ll change the language in 5 years or so.” Liz said.
Whilst businesses continue to grapple with the technology available, when your selling a business you need to think about how your business is catering to today. Are your products and services delivering to the current tech saavy clients. Whether you are placing a cafe for sale or a supermarket, do you have the
best software? Can your clients order from their tables? Can you split bills? Can you place orders online? Is your email marketing effective?
ONLINE STRUGGLES FACED BY OWNERS
Of the businesses coming to Navii, the biggest things they need help with are their key objectives, that they don’t know where to start and feel overwhelmed.
“Their lightbulb moment, they know it’s important but they don’t know where to start and the other thing that we know is that most of the people who get benefit from, or are attractive to Navii, are coming because they have a business objective of getting more sales and they’ve got that growth objective. Another lightbulb moment is that they are clear about their future.”
Owners who are thinking about selling a business may find it hard to review their technology and where they can improve. There is often alot of stress when preparing a business for sale and this is why companies such as Navii can be utilised. Helping owners to understand where they are at now, and where they could be in the future.
Social media is also a big driver. Liz said that businesses often use language such as; ‘I just want to do it better, I want to know how to do it to have benefits for my business’.
“They’re trying but they just don’t know whether what they are doing is of any use, whether they’re wasting their time, and that is completely understandable because if you just look at Facebook and Instagram by way of example, being two main social media platforms that nearly every business will want to be on, they “The algorithm has changed so much in the last 3 years and the posting format, the tools and the way you use the platforms has moved so quickly, and these poor business owners just can’t keep up.”
Understanding the technology, tools and services that are available to assist your business is important. Whilst we know owners can struggle with the amount of information available and sometimes head into overload. Selling a business is about obtaining the best possible price for your business sale.
Technology and tools can help drive an increase in revenue and reduce expenses, ultimately leading to a higher sale price at settlement.
Selling a business is an extensive process; a lot is involved, even from the initial phase of preparing your exit strategy. If you are considering selling a business, it’s a good idea to check your digital health as an initial step. There may be areas you could address before placing it for sale.
Navii has a really well-evolved diagnostic tool, the digital engagement health check, that is predominantly about sales and marketing but it is the “main hook for businesses” as it conducts an assessment of the businesses entire online presence from their website to their social media, search and more.
“It gives an amazing profile of where a business sits benchmarked against small businesses in Australia. The report gives them every point that could be an opportunity for them [to improve,] it could be they don’t have a clickable phone number on their website for example and the report gives them that feedback, why it’s important, and a solution for it.”
“It’s an amazing diagnostic tool that can also be used as an action plan, it gives us tremendous data about where the issues are about small business but its main use is for the business owner, that they can go ‘oh look here is 20 things I can do myself and improve my online presence’ pretty much immediately and those are some of those quick wins.”
“Against best practice, the average for small business in Australia is below 50%, out of the opportunities that exist across these fundamental marketing platforms, Australian small business is about halfway there generally speaking.”
Education and access are key to helping small businesses in Australia keep up in an increasingly online marketplace.
Implementing technology months before selling a business could positively impact the sales process. If you’re unable to implement any new tools, mention relevant technology in your Memorandum in the ‘potential growth’ section, so the buyer is aware.
NAVII
P. 07 3103 6566
www.navii.com.au
Navii is an Australian Government-backed, independent community of small business owners, industry and digital experts doing what they can to help businesses use digital tools and systems to operate more efficiently.
Putting your plans and ideas into motion and giving life to your business can be a very costly exercise. There is a whole new world of products and services that are designed to support and nurture your delicate little newborn business, all of which sound amazing but come with a price. customize to fit your brief. It’s all about being open minded and flexible to ensure you open up as efficiently as possible. You can always add new things to a business that is making money but you can never recover the money spent, in a business that is struggling.
You need to make sure you’ve allocated a certain budget for the initial outlay, factoring in all your costs and cash flow needs to launch. If you start without having a firm budget in mind it is very easy to get swept up in the romance and excitement of the whole process.
Remember the ultimate objective of a business is for it to be profitable and begin generating enough revenue to allow steady annual growth for reinvestment.
A budget doesn’t necessarily mean you have to sacrifice the look or concept of your business but it does mean you need to spend consciously.
If for example, you’re planning to open a salon, you may consider buying one that is established already. Rather than spend $70,000 on fitting out a blank canvas, you might take over a newly built existing salon for $30,000 and save on asset costs as well as set up time.
The money left over which you’ve now saved, can go towards hiring that marketing agency you like to build up your exposure.
Even if you’ve got a unique product or concept that doesn’t exist- you may find something in a similar industry or style that you could take over and Whilst it’s important to be thrifty with your money, you also need to remember that certain things come with certain price tags. In my many years’ experience, representing the sale of businesses across every industry imaginable, there is almost always the same common factor between the businesses that fail within the first 3-5 years of trade. Can you guess it?
I’ve run the exercise of asking first time buyers this question, and I’ve yet to have someone guess correctly. The answer is all the businesses that failed in less than 5 years of trading spent little to no money on hiring an accountant advisory service or a solicitor with commercial experience.
The focus is always around the creativity and branding of the business which generates instant physical or visual reinforcement that your business is coming to life. The idea of spending money out of the budget for business structuring advice or for legal advice around the many clauses in the lease you want to sign never seems feasible at first.
The reality is that your business can’t survive on good looks alone. Your business needs solid foundations of financial structure to rest on and the legal framework to prop itself against challenging times.
Elle Likopoulos
Officer In Effective Control
P. 03 9566 7300 E. elle@absolutebb.com.au
www.absolutbusinessbrokers.com.au
Elle is a motivated business broker with the highest number of business sales within Absolute Business Brokers. Specializing in international investor liaisons – Elle has an acute understanding of the market and buying patterns of current international investors and business visa requirements for a purchase of a business. selling or buying a business.
Business Sales Specialists
www.absolutbusinessbrokers.com.au
As a business owner who decides to put their business up for sale, you usually have some idea about what you’d like to sell your business for. This is taken into consideration, but at Absolute Business Brokers we will review your business operation and its financial records to sell your business, then use proven techniques to assist you in determining the fair market value of you business in today’s marketplace and sell your business at the best price possible.
Sellers must realize that a buyer will pay for what a business is worth today – not what it might be worth in the future. When you decide to sell your business you need to take into account current market conditions. Absolute Business Brokers will guide you through the time-consuming process of finding the right buyer, negotiating the many details to sell your business, and working closely with the accountants and other parties involved to sell your business and follow through to settlement. We use many different personal interviews with prospective buyers to determine their individual requirements, goals and objectives. We also discuss the financial resources they have available to purchase a business. When doing business with Absolute results are paramount.
Absolute is considered to be above the industry standards for reliability and results amongst its peers. Which is why we are the brokers of choice to sell your business.
Going Into Business: Buying In vs Starting Up
If you've got a passion for business and want to own a company, you're on the right track for the adventure of a lifetime. There are several ways to get started, but they're not always clear, and which is right depends on the individual. Should you buy an established company, or start your own from scratch?
There are advantages and disadvantages to both paths. Which will cost you more? Do you have a better chance of success going one way or the other? These are important questions, but fortunately, they're easy to answer.
What Kind of Entrepreneur Are You?
Your preference might come down to what drives you as an entrepreneur. Are you trying to change the world, or are you making an investment for your future?
If you have a novel idea and want to build an empire around your wild innovations, starting from scratch feels like the natural choice. You'll get to shape every aspect of your business from the ground up. It's a romantic idea, but it's more work than most people think. You have to be willing to sacrifice years of your life on a project that might not go anywhere.
Buying an established business is a more reliable option. If you want to be your own boss and grow a company, your chance of success is higher when you have a solid base to start from. Established companies offer a proven model, strong resources, and greater financial security. You don't have to reinvent the wheel, you just have to know how to drive.
It can take a long time to develop employees, business models, and vital systems for your startup. There is a lot of trial and error involved, and this is the big reason that most start-ups fail within five years. The safe bet is to take ownership of an existing enterprise. Starting from scratch is only necessary if your idea is so unique that it doesn't exist anywhere else.
What Can You Afford?
Buying a business costs more up front than starting one, but the situation begins to reverse itself almost immediately after the purchase.
With an existing business, you have the advantage of making money right away. An established cash flow lets you set realistic goals and projections, giving you more control and clarity.
Most start-ups don't turn a profit for quite some time. It's completely normal to bleed money for the first several years in operation, and there's no guarantee you'll ever turn it around.
You also have to commit to working several years of your life with no income. Far too few entrepreneurs factor this in when they calculate the cost of a startup.
Get to Work with a LINK Business Broker
At LINK Business Brisbane we work with entrepreneurs to find businesses in their industry and price range. The sellers pay all the fees, so you don't have anything to lose by taking a look at our listings to see if there's an opportunity available for you right now.
LINK Business Brisbane
Business Sale Specialists
M. 07 3831 2300 E. brisbane@linkbusiness.com.au
linkbusiness.com.au
