Businessbroker The Authority on buying and selling businesses volume 2 no.2
Aus $5.95 NZ $6.95 inc GST
"More! You want More!" GETTING IT RIGHT the first time
14 TYPES OF EXIT STRATEGIES Why do
BUSINESSES Sell For LESS than they are worth? TM
IVAN POOLE L A W Y E R S 23 YEARS FRANCHISE LAW EXPERIENCE • • • • • • • •
Franchise documentation Franchise disputes and mediation Master franchise documentation Structure advice and documentation Trade marks – application, registration, disputes Licensing and Distribution Agreements Intellectual property documentation Business sales, purchases and documentation
Nationally Accredited Mediator Specialising in Mediations in Franchising and Commercial Law.
Do You Want To Find Out How To Get More For Your Business? PHONE
"The authority on selling businesses" For a free, confidential, no obligation consultation
YOU will be surprised at what LINK can do for you! www.linkbusiness.com.au
Phone: (07) 5591 2522 Level 6, 64 Marine Parade, Southport Qld 4215 Fax: 07 5591 2511 Email: ijp@ivanpoolelawyers.com.au
Web: www.ivanpoolelawyers.com.au
Offices in: Australia Queensland New South Wales New Zealand South Africa
1300 763 668 (02) 9899 1999 +64 9 0800 546 528 +27 31 266 5390
If the Banks say no…………… Chances are Commercial Equity will say yes! At Commercial Equity we have noticed a real surge in enquiries, particularly from the small to medium business sector, who have noticed that their banks are more reluctant to lend in areas they were once comfortable with, even to financially sound clients.
We Listen,
We find this a common theme for new or second hand plant, equipment or machinery, business start-ups, business acquisitions, shop fit-outs, capital raising, re-financing or for things that are just unique because of their age or nature.
We lend, No Fuss
If you’re in business or a broker trying to source money why not talk to us today? Call John on (03) 6334 1288 or check us out online at www.commercialequity.com.au
Commercial Equity Group Ltd Business, Consumer & General Finance
TM TM
editorial
"Please Sir, I
The team Editor/Designer: Liann Rasera Writers: Mark Jason, Jamie White, Peter Rowe, Joanne Bennett, Guy Cooper, John Enkelaar, Jerry Crockford, Tim Craft, Sean O'Donnell, Aaron Toresen, Hennie Liebenberg, Mark Jensen, Tim Ross, Corey Radcliff, Don Gilbert, Briony Taylor, David Fitzgerald
want some more"!
This quote was made famous in the classic 1948 movie “Oliver Twist” in which an orphan boy in a workhouse dares to ask for more food, which is frowned upon by the adults in authority. So what does this have to do with business? Everything! As this scenario still occurs today, only the characters have changed; today we have BANKS and BUSINESSES. And if you don’t believe me, try being a business customer and going along to your bank to ask for money!
Cover: Wikimedia Commons http://creativecommons.org/licenses/ by-sa/3.0/ Business Broker magazine is published by Business Sales Corporation Pty Ltd trading as LINK
Since the GFC banks have frowned upon loaning people money to buy a business as they have the luxury of being able to choose their customers carefully due to there being less competition, more people in need of money and businesses seen as high risk. So why should they?
ADVERTISING If you wish to advertise in our magazine please call: Liann Rasera (07) 5572 2122 or email: liannr@linkbusiness.com.au
This has meant that fewer businesses have been sold and that many sellers have had to accept prices below what their business is truly worth. This was a call to action in this edition of Business Broker to focus our articles on; how to get more for your business, preparing your business for sale and adding value to your asset.
CONTACT DETAILS BUSINESS SALES CORPORATION PTY LTD t/as LINK
In this edition you will learn why businesses sell for less than they are worth, how to save time and money in the selling process, the 14 different types of exit strategies for business owners and a banker’s perspective on how to get your business ready to sell plus other great advice and tips from the experts in their fields. We believe that this edition is a must read for anyone looking to sell a business and anyone about to buy a business as one day all businesses need to be sold.
The Atrium Level 2, 15 Lake Street Varsity Lakes, Qld 4227 Australia P O Box 5141 GCMC Bundall Queensland 9726 Australia
We also have exciting news from LINK as we welcome LINK Sydney; a highly experienced wellrespected successful business broking firm, Sydney Brokerage (which has been established for over 30 years), to the LINK Franchise System. New South Wales business owners and business buyers will benefit immensely from being able to utilise LINK business sales systems, technology, support network and great success rate.
Ph: +61 (07) 5572 2122 Fax: +61 (07) 5575 8482 goldcoast@linkbusiness.com.au www.linkbusiness.com.au link@linkbusiness.co.nz www.linkbusiness.co.nz
But wait we have more! Huge news! LINK also welcomes LINK South Africa; which was established in 2002 as Renwick Business Brokers and perceived to be South Africa’s premier Business Brokerage with 30 offices throughout all major cities around South Africa. This is a huge coup for LINK as South Africa has a strong business migration to Australia and New Zealand.
DISCLAIMER The contents of Business Broker are copyright of Business Sales Corporation Pty Ltd t/as LINK. Any reproduction without prior permission is strictly prohibited. Although information in Business Broker has been derived from sources believed to be reliable and accurate, no liability is accepted for any opinions expressed or for any error or omissions. This includes material which may be inserted into the publication.
Again we welcome your comments, suggestions or information that you would like to see us publish in future so please feel free to contact me at davidf@linkbusiness.com.au. We hope that you enjoy reading this edition as much as we did in putting it together for you.
Sincerely,
DAVID FITZGERALD DIRECTOR TM
www.linkbusiness.com.au
Business Broker 03
The link neTwork We have offices with dedicated business sales professionals across Australia, New Zealand and South Africa.
souTh africa
ausTralia
Gauteng - Johannesburg - Krugersdorp - Midrand - Pretoria
Queensland - Gold Coast
Free State - Bloemfontein
WWW.LINKBUSINESS.COM.AU
Kwazulu-Natal - Durban - Matatiele - Pietermaritzburg
new zealand
Eastern Cape - East London - Jeffrey’s Bay
New South Wales - Sydney
TM
Auckland - Wairau Valley - Ellerslie Bay of Plenty - Tauranga
head office
Western Cape - Cape Town - Gansbaai - George - Plettenberg Bay
Wellington - City Centre
Link Business Franchising Ltd Level 1, 401 Great South Road, Ellerslie, Auckland, NZ
South Island - Christchurch
For further LINK Franchising Opportunities please contact link@linkbusiness.co.nz
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volume 2 no.2
11
16
21
07
Contents 06 Getting It Right The First Time
18 Guess Who's Joined the LINK Network?
Mark Jason offers his advice on how to get it right when selling
LINK welcomes two new offices to their national network, Aaron
your business.
Toresan, Managing Director explains the exciting news.
07 Coping With Disaster Implement a business continuity plan is Jamie White's advice.
08 14 Types of EXIT Strategies Exit strategies for businesses. Peter Rowe provides 14 tips.
10 Save Time and Money In The Selling Process Prepare your assignment of your lease, Joanne Bennett explains.
11 This Is Not The Time To Take Short Cuts! Guy Cooper provides 5 steps to prepare your business for sale.
12 A Real Success Story Aktiv Brands provides strong franchisor franchisee support.
13 Why do Businesses Sell For Less Than They Are Worth?
20 How Intellectual Property Contributes To The Value of An Enterprise Hennie Liebenberg explains some of the difficulties.
21 Take Your Business To The Cleaners Mark Jensen explains how to spruce up your business to increase its value and speed the sale process.
22 What If the Decision To Sell Your Share Of The Business Is Taken Out Of Your Hands Tim Ross draws on a case study to explain why you should consider a Buy Sell Agreement funded by insurance.
23 Adding Value - Seek Advice First! What are you selling and what is a buyer looking for?
24 Watch This Space For Leases
John Enkelaar suggests some aspects to consider on how to
Don Gilbert explains what would add or detract from the intangible
best prepare your business for sale.
asset value on a lease agreement.
14 How Your Marketing Plan Can Add Value To Your Business! Documenting your branding and marketing can pay dividends writes Jerry Crockford.
15 Selling A Business Today Tim Craft explains the rules.
16 How To Get Your Business Ready To Sell Sean O'Donnell offers his tips on how you can get your business ready to sell.
25 Buying A Business? Briony Taylor discusses how to get the most out of the standard contract warranties.
26 Looking For a NEW Career? Have you ever considered becoming a Business Broker?
Business Opportunities 28 Queensland 33 New South Wales Business Broker 05
LINK
Getting it RIGHT the first time! In the same way that you wouldn’t let a plumber run a restaurant, you need to make sure you have the right professional handling the sale of your business when it comes time to sell. Mark Jason explains why getting it wrong, even once can cause irreparable damage to the prospects of getting the best price when it comes time to sell. Now more than ever we must be aware that there are only a finite number of buyers in the market and we may only get one chance to capture these buyers attention for a particular business. Hence it is important that all aspects of the business sales process are attended to in an objective and professional manner, with the skill of a Michelin Star Chef. Leaving out one important ingredient or having the oven set slightly too hot may result in a less than sumptuous meal, ensuring the customer will not return for a second visit.
When the price is listed above a position denoted by key value factors, we often see buyers disregard further investigation with the view that the owner’s expectations will be unrealistic.
Negotiation: One must ensure they have covered all commercial points during the negotiation process while displaying tact, diplomacy and dealing appropriately with any emotional content.
While buyers take the notion that a price that seems ‘too good to be true’ often lives up to this perception, as there may be underlying reasoning for the discounted price in comparison to similar offerings.
Quite often we see people involved in the sale process focus on the price during negotiation. Failure to cover all commercial terms can see the sale fall over or a reduced price negotiated. Using a professional broker
“To get the most from the sale of your business as an intermediary during the it is imperative that the person you choose to sell negotiation process will keep Listed below are a few your business is a professional examples where ‘getting it the sale on track towards the with tangible success.” right’ will bring about the best best possible result, by keeping Preparing properly: We see far too often businesses which are put to market that are either not ready for sale or have not had all necessary information collated and provided. A transaction cannot take place, nor can you get the best price unless a buyer is satisfied with the information provided and its validity.
Marketing: The old analogy that ‘you can’t sell a secret’ rings true, but you also don’t want to be blanket advertising for limited results. The creation of a marketing strategy specific to the business offering is important to identify different prospective buyers, target specific buyer pools and engage the interest of as many qualified buyers as possible.
Buyers get frustrated when requested information is slow in coming, sometimes concluding that the vendor is hiding something. These buyers at the very least will offer less for the business, matching the increased risk perceived through the lack of transparency or disclosure. Quite often the buyer will simply walk away from the transaction and focus on another offering where the information is forthcoming and readily disclosed, subduing the buyers concerns and providing a level of comfort essential for the buyer to proceed.
Timing: There are quite a few different ways to go about the sales process, with the position of due diligence, finance, approval processes, price negotiation and contracts being interchangeable within the sale process depending on a number of factors.
Pricing: It’s important to ensure the business is priced correctly at the beginning, as a price too high or too low may see serious buyers overlook the offering regardless of the amount of advertising undertaken.
The creation of this market place amongst willing and able buyers will ensure the best price is attained, retaining the balance of power in the vendor’s hands, as opposed to one buyer driving the price down.
06 Business Broker
Just like a chef can ensure all the food arrives cooked and hot to your table, a professional broker is able to interchange the process amongst different buyers to ensure as many offers are brought to the table around the same time.
the emotional content of the negotiation to a minimum and dealing with both sides in a diplomatic manner.
As you can see from the examples above, to get the most from the sale of your business it’s imperative that the person you choose to sell your business is a professional with tangible success, who has a good understanding of the entire process and is able to identify all that is needed through the sales process, much the same as a good chef can bring a delightful meal to the table hot and perfectly cooked for a good number of diners. ______________________ Mark Jason, Director, LINK NSW Contact Mark Ph: (02) 9899 1999 Email: markj@linkbusiness.com.au
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results.
www.linkbusiness.com.au
Coping with
SOLICITOR
Disaster ! What is your strategy?
There is no doubt that the recent flooding throughout the South-East Queensland and Darling Downs regions has had (and will have) a massive impact upon residents, business owners and various industry sectors. Of concern in the commercial sphere is the ability of business owners to prepare for unforseen interruptions to their business and to reduce consequential economic loss. Jamie White explains. This article will highlight the importance of implementing a business continuity plan in to your business for the purpose of ensuring the ongoing operation of your business in the face of a natural disaster. While there are many considerations to make when preparing your business for a natural disaster, one consideration that is often overlooked is the implementation of a business continuity plan.
What is a Business Continuity Plan?
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A business continuity plan is a document, which addresses the specific circumstances and requirements of your business. It will provide practical strategies to follow in the event of disaster such as flood, fire, storm, explosion, power outage or terrorism. A well prepared business continuity plan will provide a sound understanding of how your business operates, the risks it faces and the things that need to be done to ensure you recover from an incident. Typically, a Disaster Backup Agreement will be integrated in to a business continuity plan. This document is a mutual agreement between two parties for the purpose of assisting the party affected by disaster to carry on business with minimum disruption. Disaster Backup Agreements often create an obligation from the ‘host’ party to the ‘affected’ party to provide minimum resources, www.linkbusiness.com.au
including access to office space and furniture, business equipment, specific technology and software and personnel. Access to these resources will ensure that the affected party continues operation of its business with limited disruption, reducing the possibility of lost business profits and minimising the adverse impact of a natural disaster upon its business.
However most importantly, you should test your business continuity plan to ensure that it will be effective in the event of a disaster. This may be achieved by carrying out a ‘dry run’, which will assist in identifying whether or not you have overlooked any key issues in establishing your plan. Learning of an oversight in your business continuity plan during a disaster would be a disaster in itself.
“
Implementing a Business Continuity Plan. Implementing a business continuity The implementation of a business continuity plan into your business is not a simple task plan in to your business risk management and involves consdiderable planning strategy is a crucial step to take. Business Conclusion insurance alone will not be enough to ensure Preparing your business for a disaster is best the continued operation of your business completed before a disaster occurs. The time during a crisis. However, implementing a and expense associated with implementing business continuity plan in to your business a business continuity plan into your business is not a simple task and involves considerable represents a wise investment as how quickly planning. your company becomes operational after a disaster is contingent upon the planning you Some steps for action are: do now. We recommend that you implement a business continuity plan in to your business • the consultation of employees to now as every business owner should be identify what may constitute a disaster aware of how they will manage their business for your business; in emergency circumstances. • the establishment of a business continuity plan team to carry out the Very few businesses are prepared for natural plan in the event of a disaster; disasters…is yours? • checking to ensure that your business ______________________ insurance is current; Jamie White, Solicitor Director, Pod Legal • the consideration of IT requirements; Ph: 1800 POD LEGAL • planning for an alternate premises; and Email: jamie@podlegal.com.au • routine revision of your business Web: www.podlegal.com.au continuity plan to ensure its currency.
”
Business Broker 07
84%
business specialist
14
types of s e i g e t a r t s exit s e s s e n i s for bu
EXIT
50%
of owners expect their business sale to be the major component of their retirement funding
40%
of SME's are very dependent upon the owner, yet only 28% felt it would be difficult to find someone to take over the business
43%
expect a lump sum payment from the sale of the business; 31% expect an income stream
of business owners intend to leave their business in the next MONEY five years is not regarded as the main block to finding a buyer; skills, lifestyle and personality are
30%
will find it difficult to find a buyer
STRATEGIES
Peter Rowe Managing Director Profitune Business
One of the common myths among business owners is that their business is their superannuation. Business owners are often so absorbed in the day-today running of their business, that they fall into the trap of having bought themself a job, and forget about building a business from which they can easily and profitably exit.
08 Business Broker
www.linkbusiness.com.au
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So, what does it all come down to?
BUSINESS SPECIALIST
So what sort of exits could you make? Let’s look at just a few:
1. The Scott Free Exit! You could work hard, build up a great business and sell it privately for cash, for around 2 to 4 times the average of your last three years pre-tax profits, plus whatever you can get for stock and equipment. You’re out Scott free!
2. The Never-Never Exit. You might find someone (staff? family?) whom agree to your price, but can’t raise the finance, in which case you may “vendor finance” them for a deposit plus instalments over time. You’re not out and you’re not in! Take a mortgage over everything the buyer has!
3. The Shareholder Exit. You may sell some shares in your business to staff, management or others, while retaining others and stepping out. Working shareholders receive a salary for their work, and all divide net profits according to your shareholdings. You have less risk and less control. How will that feel?
4. The Hire Purchase Exit! In the case of two, you may “hire purchase” the business instead, so that if your buyer defaults their payments are forfeit to you as “rent” for use of the business up to that point. Safer, but you’re back to work again if it fails, and usually with a major rebuild on your hands.
5. The "Take Me Out" Exit! You could make yourself an attractive take over target for a competitor. If this is on the cards, keep your lines of communications with your industry open (suppliers and their reps can be great information hubs), and look to develop niches that would complement your competitors’ businesses if they bought you out. The money is usually there, and your business could go on to thrive.
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6. The "Take Me On" Exit! You could make yourself attractive to a supplier! Suppliers usually work on large volume, skinny margin and might see great merit in taking over a leading reseller of their products thereby picking up extra margin, securing market share, and possibly kickstarting a whole retail chain operation. www.linkbusiness.com.au
Cash in the bank! And they may want you to stay on and run the show for a period of time on a fat contract!
7. The "Take Me Too" Exit! You could call in a merchant banker and ask them to group your business with those of a number of your competitors to form a large enough offering that would attract a major corporate purchaser. Corporations often look longer term and look to leverage existing synergies thus making it possible to offer higher multiples of earnings than smaller purchasers.
8. The "Keep Me On" Exit! In any buy out situation, staying on to manage the ownership transition can sometimes be a condition of purchase. At first a nice fat (realistic) executive salary package might be attractive, but the corporate cultural differences may prove a major challenge and your next year or two’s salary could be the hardest dollars you have ever earned! Do whatever you can to minimise the penalties associated with an early withdrawal before you agree to sell.
9. The Promotion Exit! You could do such a brilliant job on systematising your business, developing your staff and delegating responsibilities that the business only needs your occasional input at a high level, in which case you may choose to “retire” into the role of “Chairman/Woman of the Board”, appearing only when needed to set goals, reward performance or coach the management of big issues.
10. The Demotion Exit! This is a variation on the Chair Exit in that instead of moving upstairs, you move down, into a role that you love. For example, you may be an excellent graphic designer who always enjoyed their art, but gave up the pleasure of your art when you accepted that your responsibility lay in building and managing your business. Now that you have developed your management team to the point where they can run it, you might like to “retire” into the gloriouslysatisfying, low-stress role of a dedicated worker bee, and go back to your beloved graphic work!
11. The Disability Exit! Not a pleasant one to think about, but what happens if you are injured or struck by illness to the extent where you can no longer work? What provision have you made to prevent your business and or funds being frozen due to incapacity on your part? This one is never “timed right” but the impact can be minimised using a few simple tools: Enduring Power of Attorney and/or Will and Insurance among them.
12. The Death Exit! This one won’t bother you directly (after all, all of your problems will be over) but it may cause you concern if your loved ones are left to clean up a mess. Make sure your books are in order and up-to-date; that you have a current will that expresses your wishes; that you have a successor, or at least have developed within your team the ability to do the basic things that you do. Succession Insurance is a smart way of protecting your family, your staff and your business and the people it serves.
13. The Divorce Exit! What happens if your partner in life takes half or more of your joint assets to go and play somewhere else? Could your business survive such an event? Can you make arrangements to minimise the business impact of such an eventuality?
14. The Departure Exit! What happens if your business partner wants to leave? Who will referee the event? How will you decide on value? What provision can you make now, to manage such a future event so as to minimise the impact on your business?
I would seriously suggest spending sometime considering what your ideal exit strategy would look like in comparison to the one you are currently headed towards.
______________________ Peter Rowe is a Business Improvement Specialist at Profitune Phone: 1 300 2 PROFIT Website: www.profitune.com Business Broker 09
SOLICITOR
Save Time & Money in the Selling Process
Joanne Bennett from Rostron Carlyle explains that you need to be prepared for the assignment of your lease.
To maximise the size of the cheque you receive at the end of the settlement process and minimise the argument between your landlord’s solicitor, your solicitor and the purchaser’s solicitor it is worth investing time in reviewing your lease in relation to the lease being “assigned” (meaning transferred by agreement) to the purchaser who will take over your relationship with your landlord.
First, make sure you are not currently in breach of your lease. Your rent payments should be up-to-date, the property maintained and serviced, clean and insured for all of those items such as plate glass and public liability which your lease provides. Your landlord has an ability to refuse consent to any assignment if you are in breach of your lease. Find a copy of your most recent outgoings audited statement and a copy of the last three month’s rent invoices in case the purchaser or their accountant wishes to review those as part of the due diligence. Also, check that your business has the requisite 10 Business Broker
town planning approval to operate from your premises.
area? You may want your solicitor to perform a titles office search to ensure that the lease together with any amendments are provided to your business broker to pass on to the seller’s solicitor as early in the process as possible.
Second, you should find out where your original lease is. Your solicitor may have it on file from when you signed it or when the lease was originally assigned to you. The original document must be handed over at the settlement of your sale so it is quite important to obtain it sooner especially if it is stored off site in a safe custody facility which is not easily accessible.
Fourth, check your lease or have your solicitor
Once you have obtained your lease you will need to consider whether or not you have a Retail Shop Leases tenancy or a commercial tenancy as there are extra steps to have your lease assigned and the associated timelines and cooling off periods must be observed.
A proactive broker will ensure that the purchaser is well aware of their requirements and ready and able to provide all of the requested information to the landlord or their solicitor to reduce the delay associated with repeated requests for information.
In many cases your solicitor will already have an understanding of the particular documents such as Assignor and Assignee Disclosure Statements which must be prepared prior to approaching the Landlord/their solicitor about the assignment.
Finally check that you have all the required sets of keys, combination codes, swipe cards and car parking entry keys that will have to be handed over on settlement day.
If you have a Retail Shop Leases Tenancy your business will be listed at: http://www. legislation.qld.gov.au/LEGISLTN/CURRENT/R/ RetailShopR06.pdf. As an “Assignor” you will need to complete an “Assignor Disclosure Statement” and if you wish to be quite proactive you could have your business broker include this in the documents provided to the purchaser.
Third, check if the original lease is the only document governing your relationship with the landlord. Has your lease, for example, been amended perhaps to exercise an option or to change other lease terms such as rent or
check your lease for the information which the landlord/their solicitor will seek from the incoming purchaser and make a note of this information to pass onto your business broker.
Lease assignment wrinkles are best ironed out before the final day of settlement to ensure the completion of your transaction in a smooth and timely manner. ______________________ This article was written by Joanne Bennett LL.B., GDLP., Senior Associate of Roston Carlyle Level 15, 270 Adelaide Street • Brisbane • QLD 4000. You can contact Joanne at T 07 3009 8440 F 07 3009 8499 email: j.bennett@rostroncarlyle.com web: http://www.rostroncarlyle.com linkedIn: Jo Bennett twitter: lady_josephine_
www.linkbusiness.com.au
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S
o, you have decided to sell your business. You have contacted your accountant to obtain up-to-date financial information, you have arranged to meet Joanne Bennett with a broker who Senior Associate understands your Rostron Carlyle business and you’ve Solicitors started to think about the size of the cheque at the end of the settlement process. Isn’t that it? If only it were that simple.
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is h T
t o is n
th et im et ot ak e
r o sh
! s t u tc
Selling your business will most likely be the largest financial transaction you will ever make. What steps should you take in preparing your business for sale?
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Determine your Business actual value. There are many methodologies for valuing a business. The sale price depends on several factors such as profits, sales, business fundamentals, future prospects, lease tenure, client data base, and more. An experienced and accredited Business Broker will be able to give you an appraisal on the current market value of your business, or a third-party independent valuation is another method of establishing a market value for your business. Make sure your records are up-to-date. You will want all of your hard work to pay off in the sale, so be sure you have at least 3 years of detailed financials and company records that provide an accurate assessment of the company’s financial position. This is imperative as you will be guaranteed that not only will the buyer need this information for the Bank, but the accountant will be required to confirm that what you have presented is true and correct as part of the due diligence process. Ensure that you have updated the list of plant and equipment in line with your deprecation schedule. The staff is an important asset. Confidentiality is imperative during the process of the sale of the business. The loss of key employees during a sale can have serious consequences to the transaction and may be crucial to the ongoing success of the business. Do www.linkbusiness.com.au
everything possible to train and properly compensate your best personnel to ensure they will be motivated to work with a new owner de-emphasise the reliance on you as the owner operator and shift as much responsibility for managing the business onto your more senior and trusted staff. Buyers are always impressed with management implantation. Client diversification. Don’t have all of your eggs in one basket! Ensure that your client base is solidified and all contracts are up to date and renewed. If you have any clients who represent more than 10% of your business, now would be the time to add new clients, in order to minimise the potential impact that the loss of one large client could have on your business. Bring together a team of experts. No matter how independent you are, the sale of a business is not something you should attempt to manage on your own. A good team should consist of an accredited Business Broker, experience Solicitor, and Accountant. The performance of your business during the time it is on the market is crucial, so working with professionals will allow you to focus on the ongoing operation of the business while the team manages the sale of your prized asset. SOLD! Guy Cooper, Director , LINK SE Queensland. Contact Guy on his mobile 0431 227 644 or via email guyc@linkbusiness.com.au Business Broker 11
advertorial
AKTIV Brands
A REAL success STORY
A
ktiv is a Brisbane-based company that has helped grow and develop several successful fast food franchises including Bucking Bull, se7en Gourmet Takeaway, Skewerz Kebabz and The Kebab Co.
After 10 years in franchising, including two years as a franchise owner and three years as a master franchisee, Aktiv’s Executive Director, Dean Vella knows the difference between a strong and productive relationship between franchisees and franchisor, and a bad one. According to Dean, franchise owners and staff are trained in every aspect of the business from day one and then coached and supported continuously. Strong branding, stylish marketing material and ongoing coaching provide Aktiv franchise owners with the tools to grow and sustain a profitable business. “Aktiv Brands has quite an intensive initial as well as ongoing training program, so when it’s time to remove the training wheels for the first time, our support and training staff are standing close by to ensure Franchise Owners are supported and any initial concerns sorted before the Franchise Owner is confident and able to meet the brand’s operational requirements”, says Dean. Aktiv group’s primary brand Bucking Bull is still impressively owned by the original founder of the business – CEO, Stuart Beechen. The successful Roast & Grill chain is still 100% focused on the products that gave them their start – the traditional Aussie Roast, home-style burgers and sandwiches, spuds and classic subs. “The success of Bucking Bull rests upon solid foundations of experience, industry knowledge, extensive franchise and staff training, a Franchise Support network ingrained with a passion for food, retail and customer service and a franchise base of loyal, passionate and motivated Store Owners”, says Stuart.
menu of hot breakfasts, gourmet grills, seafood, freshly made salads and coffee. Peter, Master Franchisee for se7en’s West Brisbane territory and franchise owner of Bucking Bull at Ipswich Riverlink Shopping Centre in Queensland, is thrilled to be sharing in the success of his chosen brands. Upon choosing the Bucking Bull and se7en Franchises, Peter says the greatest appeal for him was the “support provided by the franchisor. There is a big difference between franchisors and the level of support given. I also believe in the brands.” Aktiv Brands most recently announced the acquisition of Western Australian brand The Kebab Co. with plans to merge it with new franchised brand, Skewerz Kebabz. Aktiv group’s Managing Director, Stuart Beechen, said “The acquisition provides additional opportunities for the Aktiv group and the franchisees of each system by allowing for the integration of products, collaborative marketing initiatives, co-branding, supply economies and leveraging of the Aktiv franchise management systems.” Basil Bresgi, Franchise Owner of both Bucking Bull and The Kebab Co. in the Centro Galleria Shopping Centre in Western Australia, said “The opportunity for The Kebab Co. to join the Aktiv group was an easy choice considering the franchise support, marketing and group purchasing benefits provided to me as a Bucking Bull franchisee over the past 10 years.”
To become part of the AKTIV Brands Group or learn more about the AKTIV Brands Group please contact Leo Kalathas on 0402 117 722 or email leok@linkbusiness.com.au. For more information, visit www.aktivbrands.com.
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Graham & Sue Carrington, owners of Bucking Bull – Lakeside Joondalup in Western Australia, have been with the brand for many years. “We’ve been involved with Bucking Bull since its beginning and we wouldn’t still be involved if we weren’t happy. The support we get is terrific. We’re very happy to be part of the Bucking Bull community”, says Sue. 2010 is testament to Aktiv group’s success with the acquisition of several new brands including se7en Gourmet Takeaway, a high-end takeaway concept boasting modern branding, stylish store design and an all day 12 Business Broker
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Why do
finance
BUSINESSES SELL for LESS n our ratio 1. Y prepa n g easo llin he r are se T . 2 you
Let's firstly consider “Why businesses sell for less than their worth"? Once you have addressed that question, you can develop strategies which may prove to be time-friendly and generate a postive return. If you want the best price for your business you need to look at these matters:
1. 2.
Your preparation The reason you are selling
1. PREPARATION It’s all about preparation and if you are looking at selling the best tip is plan ahead. Experts claim a one to three year exit plan is essential and will pay off come crunch time. Take a good look at your business as if you were the buyer. Be aware of your strengths and weaknesses. You need to prepare and implement a detailed plan of action to get the business ready for close examination. This is critical, to sell your business at a premium price it needs to be attractive and ready to be sold.
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Inform your staff, let them know your intentions. Your staff may be a key towards a large proportion of the businesses goodwill. Get your financials in order!! When it comes to selling the buyer wants as much information as possible. Make sure your lawyer and accountant have everything up-to-date and precise. Buyers view a business as an investment. If your business financials are incorrect or a bit rubbery, it can lead to the potential buyer becoming nervous and hesitant to invest. www.linkbusiness.com.au
than they are worth?
The best laid plan is to have an Exit Strategy. Here John Enkelaar suggests some aspects to consider on how to best prepare your business for sale. Include all the positives in discussions and planning, such as long term contracts and recurring/on-going revenue. Prepare detailed information on your business, cover everything, such as day-to-day operations, information on your competition, relevant industry information, research and development issues and a history of your business. Sometimes this is referred to as an “information memorandum”, it’s very important that the potential buyer has a “guide” to running the business and essentially an overview on hand. Expect your potential buyers and their accountants to go through your financials with a fine tooth comb. Be well prepared otherwise you may find yourself in an embarrassing situation which may put you on the back foot come negotiations. Remember, a business is attractive to a buyer for only one reason….to make money, plain and simple.
2. THE REASON FOR SELLING Don’t fall into the trap of being negative (or too honest) to potential buyers by saying or implying that... "I'm burnt out." "I’m tired of this and want to do something else." "Things are too uncertain in today’s business world” It sends off alarms like that robot from Lost in Space…..”Warning, warning, warning”!!! The reason for selling should be based on the business' strong selling point. Be positive about your reasons and turn these
lemons into lemonade. Try these….. “The business is at a stage where I must make a decision….I want to wind down my involvement but also want it to grow…….This is the best solution for the business”. Do I grow the business and work longer and harder…..or pass on the banner? "My wife says I should retire, spend more time with family……and play golf”! “I’ve built the business to be strong and viable…. It's a perfect time to sell”. Finally…….advertise! Newspaper ads, a radio campaign, maybe even TV. Look at an option that suits you. Concentrate on branding……who you are, where you are and what you do. Lifting your profile also lifts the perception of strength and credibility in the market place. You will find it worthwhile when it comes sale time. Of course this is just an overview, the best advice is to seek out a professional to guide you through the sales process and then formally value your business. If you want to get more for your business when you sell…….be prepared……and have a strong selling point, a positive reason for selling. ______________________ Commercial Equity Group is a Tasmanian based company that approve and funds loans from their own resources. To learn more about Commercial Equity Group visit their website at www.commercialequity.com.au Business Broker 13
marketing
How your marketing plan can add value to your business! When a prospective buyer is considering your business, one of the things they are looking for is a feeling of confidence about the future. The more security and potential they can see in the business, the happier they will be to make an offer that gives you a higher return writes Jerry Crockford.
The reason for this is that in many cases, the marketing process for the business is in the owner’s head, rather than being a documented system that the next owner can pick up and run with.
Documentation Adds Value Investing some time to put together a documented step-by-step marketing program for your business can pay dividends. It doesn’t need to be overly detailed. It just needs to show that there is a process in place that the new owner can continue and build on into the future.
For example, under the first section about bringing in new customers, have a think about strategies you are using to generate inquiries. This may include advertisements in the newspaper, your online (email and web) strategy, direct mail or other processes. Noting the what, when, why and how of these over the past, say, two to five years can create an impressive document. To really add value, include copies of any direct mail or adverts you have used, together with comments about what worked well etc. As your website is upgraded, make sure you print screen shots of the previous version. Seeing these will help a prospective buyer appreciate the growth of the business, and the potential for the future.
Your Customer Database
customer that hasn’t been in contact with you for a while, they should ALWAYS quickly check with the customer to ensure that their email and other contact details are up-to-date on your database.
Documenting Your Branding Too The other asset that is often overlooked in small business is that of your branding. This is your: • Logo. • Overall visual identity. • Brand promise. • The way you do business. All of these things determine the experience that customers have with your business. As such, they are of GREAT value to a potential buyer, as they are the cornerstone that sets your business apart from competitors.
I can’t emphasise enough the importance of keeping your customer database up-to-date. In the short and medium term, it is something you can use to generate repeat and referral business. And, in the long term, it will add tremendous value to the sale price of your business.
Remember, when selling your business, it isn’t enough for YOU to know how good it is. Your potential buyer must be able to see it too. By documenting your branding and marketing strategy, you will give a potential buyer more confidence, and add value to your business at sale time.
When I go through this process with business owners, they are often surprised at how much they are really doing with their marketing, without even realising it themselves. They just don’t see it, as it isn’t documented.
When a buyer can see that there is a list of actual customers, together with detail of their relationship with your business, it will give them a huge amount of confidence in the opportunity that you are offering.
As you start to unpack each of the above sections, you can then analyse and document the steps that are being taken to bring about the desired result.
Keeping your list up to date is very important, and I strongly encourage you to make sure that everyone on your team is aware of its value. For example, if someone is talking to a
______________________ Jerry Crockford is the Managing Director of Crockford Carlisle, located in Brisbane. For more help with your marketing and growth strategies, call Jerry and his team at their Woolloongabba office on (07) 3891 3800 or email them at profit@c-c.com.au.
When drafting your plan, brainstorm with your team to identify things that you have done in the past to: • Bring in new customers. • Bring in repeat customers. • Bring in referral business.
14 Business Broker
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O
ne asset that is frequently overlooked when selling a business is that of your marketing plan.
LINK
Selling A Business Today
H
aving had approximately sixteen years in Business Broking, I have to say that the last three years have been the toughest I can remember.
I suppose that we are still here and doing better than most is a good thing but everyone in the business I talk to is happy that 2010 is now behind us. The aftermath of the GFC caused the following issues: • • • •
• •
Baby boomers not wanting to sell as they need to make up for lost profits. Buyers who want to buy businesses but cannot raise the money or the banks prohibitive lending restrictions. Banks having less competition and their much stricter lending criteria for businesses. The seller not being educated about the availability of a buyer not having access to money at the same rate the seller did when they bought the business. The business being incorrectly priced in the first place. The distinct lack of good businesses for sale coupled with some industries having had a really bad time of the last couple of years.
The rules to sell a business are the same as they always have been only much stricter these days. Rule #1 Is to get the business in order and present it as you would like to have found it when you bought it. Rule #2 Make sure you have all the correct figures in the way of profit & loss accounts for at least the last 3 years. To have a current profit and loss included for the few months of the present trading years is even better.
Rule #3 Make sure the profit and loss have been signed off by the accountant as it is his/her responsibility. Rule #4 Have someone who you can trust or who you are happy with to assist in valuing your business. The Tim Craft, Director valuing of your business is of vital importance LINK SE QLD and unfortunately not many people know how to do it. The value of your business is not going to be worked out the same as when you bought it. Get full explanations from the person valuing it as to how they worked it out. Don’t just accept what they say is accurate. In most cases it won’t be. Rule #5 Make sure your asking price is reasonable and that you are not expecting a premium and wonder why it doesn’t sell. Rule #6 Ensure all the operational details and systems are in place and can be easily shown to a prospective buyer. Try to ensure the business does not only rely on your input. The banks are the toughest I have ever known them and the lending criteria for buyers is extremely strict. Make sure your business is priced correctly, and marketed via the correct channels, whether this is via the web sites or the newspaper. You cannot sell a secret so promote it for sale; all strictly confidential without giving too much away. To sell a business is a major transaction, much bigger than selling your house. Work with someone who can help get you the right information, help to price it properly, help to present it correctly and help to market it correctly. With all these things put together properly your business should sell and sell for the right price. For advice or assistance call an experienced Business Broker at LINK.
Do you enjoy reading Businessbroker? Would you like to receive your very own copy of Businessbroker magazine? If so, please send your postal details to goldcoast@linkbusiness.com.au or post your details to PO Box 5141, GCMC QLD 9726.
SCAN HERE
If there are any articles you would like to see covered in our magazine let us know and we will have one of our professionals write an article.
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TM
Business Broker 15
How to get your business READY TO SELL
A BANKER'S PERSPECTIVE BY SEAN O'DONNELL
No matter what the reasons behind your sale, BOQ General Manager Business Banking Sean O’Donnell has some tips on how you can get your business ready to sell. 16 Business Broker
Sean said first and foremost keep your decision to sell confidential. “The decision to sell your business should be kept amongst yourself and other select individuals,” he said. This is to ensure that you avoid upsetting your employees as any rumours of a sale can be unsettling for any staff. Your employees naturally want job security and rumours of a pending sale may prompt key employees to seek other employment opportunities.” "But that’s not to say that you should keep your people in the dark," says Sean. Once you’re sufficiently progressed towards a sale, I’d recommend you meet with your staff frequently to update them on business plans, speak privately with key individuals about your plans and assure them of continued
success. You might also like to consider incentives such as pay rises, promotions and activities to maintain staff morale, such as an afternoon of barefoot bowling and giving your staff tickets to sporting events or concerts. “You should also seek advice on your obligations under the Fair Work Australia Act,” he said. Another reason for keeping your decision confidential is to keep your competition at bay. “As soon as your competitors get a whiff of anything going on they unfortunately might make some moves that can undermine the success of your business,” said Sean. Rumours that you’ll no longer be in the business could damage the goodwill that you’ve worked hard to build over the years and your customers, suppliers and creditors may feel uneasy with the news. www.linkbusiness.com.au
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The decision to sell your business can be a big deal, especially if it’s a business that you’ve nurtured from its infancy.
FINANCIAL INSTITUTION A way around this is to keep in close contact with your key customers and assure them of your continued service and business as well as keeping up your good relationship with your suppliers and creditors. And, don’t get lazy because you’re selling, now is not the time to be slack with your accounts, if anything it is imperative that you pay your accounts on time and keep all your books in good order. Although the decision may have been a difficult one to reach, Sean recommends as soon as you’ve made the decision to sell you need jump into it quickly. “No doubt you’ve seen it before and not just with businesses but with a perfectly good home that sits on the market too long, people begin to wonder what’s wrong with it,” he said. “And, the longer it takes to sell, the higher chance your employees, competitors and creditors may undermine your continued operations.” To make sure your business is in good order to sell, Sean recommends that you have your financials ready to review, that you scrutinise and validate every potential buyer including entering into an appropriate confidentiality agreement before showing your business operations and key customers to them. Sean also recommends that you should make yourself available as needed and seek professional assistance from an advisor who can prepare the necessary documentation as well as keeping things confidential and moving in the right direction.
past three years and you should prep your business to show a minimum forecast of two years uptrend that supports your market value. This includes increasing sales from the year prior, incurring expenses that directly grow the business and building a positive cash flow stream. When all that’s done you should also focus on getting rid of excess inventory, paying off short and long-term obligations, showing a history of collectable receivable and maintaining a strong credit record with your lender. So, you’ve taken all the right steps to have your business in order to sell but how do you put a fair market price on the business and take the sentimental value out of the equation? “Value can mean different things to different people, but cash is a good measure of value,” Sean said. The price to one buyer may signal low value in the benefits received and to another buyer, the "price" may indicate high value. That’s why value can be a different
The more repeat customers you have, the better. Are your sales from a broad spectrum of customers? Chances are if you’ve been in business a while you’ve heard of the 80-20 rule, that is 80% of your business comes from 20% of your customers, which is a typical scenario for most businesses. There’s cause for concern when your sales breakdown reads along the lines of 95% of your sales from 2 - 5% of your customers. Anyone looking to buy your business will factor in what could happen to sales if one of your major customers deflect or go out of business. By having a broad spectrum of customers you’ll increase the value of your business. Can your sales be replicated? In other words, can you take your product or service and replicate the sales success in a different market or to a different target segment? If the answer is yes the value of your business will go up.
“No matter what way you look at it a dollar is a dollar and the more dollars you have the greater Are you a key factor in the ongoing success of your business? the value of your business”
Sean said having your financial paperwork in order is absolutely necessary.
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“This is your bread and butter and will be your prospective buyer’s bread and butter too,” he said. You may know that your business is in good shape but if your paperwork isn’t up-to-date or is missing vital information then you’ll have a hard time convincing someone that your business is a good buy. Your sales presentation to a prospective buyer should include the company financial for the www.linkbusiness.com.au
However, there’s one commonality that exists when measuring value and that is cash.
If your business brand, product and /or customer contacts are dependent on you being in the business then you need to start prepping your business many months before you put your business up for sale to slowly take yourself out of the picture of the day-to-day operations.
No matter what way you look at it a dollar is a dollar and the more dollars you have the greater the value of your business.
And, all the while you need to keep those ‘sale’ rumours at bay while you work on your exit strategy.
Here are some things to consider when measuring the value of your business:
Naturally any potential buyer will want to know whether the sales will continue when you transfer the business to them. It doesn’t matter how good your financials and profit forecasts are your business is going to be more valuable if it is not dependent on you.
measurement depending on who you market your business to.
Are your sales trending up? This is a given requirement before any business will sell at its maximum market value. If sales are trending down, it's best to revisit your marketing strategy or exit the business. The buyer will analyse your sales numbers as follows: Are your sales one-offs or from repeat customers?
The information contained in this article is of a general nature only and does not substitute professional advice. Professional advice should be sought before any action is taken based on the content of this article.
Business Broker 17
link
New South Wales & South Africa Join the LINK Network Aaron Toresen, Managing Director, LINK Business Franchising Ltd is happy to announce a major change in the industry On the 24th December 2010, while most people were busy preparing for the holiday season, LINK welcomed two new companies to their international network. The first is Sydney Brokerage located in the Sydney CBD, and the second is Renwick Business Brokers, one of the largest Business Broking companies in South Africa.
The new LINK New South Wales is staffed by a select group of seven vibrant brokers and three administrators. With vast experience in Business Broking, LINK New South Wales is able to achieve full exposure in the marketplace while supplying personal service to our clients needs.
LINK New South Wales
LINK New South Wales Suite 507, Museum Towers 267 – 277 Castlereagh Street Sydney, NSW 2000 Australia
LINK is proud to introduce Sydney Brokerage as the new LINK New South Wales. Sydney Brokerage was founded in 1979 by Ray Jason and is now owned and operated by his son Mark. Mark joined the family business in 2004 after having worked internationally for many years in the finance sector and has worked in various management positions in the service and hospitality industries. His great understanding of business management makes him an ideal partner to grow LINK in Sydney and New South Wales.
Ph: (02) 9899 1999 Fax: (02) 9269 0835 Email: sydney@linkbusiness.com.au Website: www.linkbusiness.com.au
LINK found that Sydney Brokerage’s aim to raise the standards of Business Broking Nationwide fit perfectly with LINK’s commitment to excellence. Sydney Brokerage prides itself as being a leader of new Business Broking ideologies and in developing and improving traditional applications in the marketing and selling of businesses and therefore is a welcome addition to the LINK network.
From left to right - Canaan Lim, Sean Wolrige, Ray Jason, Mark Jason, Mindy Prestage, Mark Nesbitt, Karin Bentlin, and Matthew Page
18 Business Broker
LINK
Aaron Toresen Managing Director, LINK Business Franchising Ltdia
LINK South Africa LINK has been looking to open in South Africa for quite some time, due to the close relationship between New Zealand, Australia and South Africa. After months of discussion we are excited to announce that Renwick Business Brokers will be rebranding and joining the LINK network as LINK South Africa from 01 March 2011.
photo iStockphoto & stock.xchng images
Renwick Business Brokers was first established in 2002, and is one of the largest and fastest growing Business Brokerages in South Africa and is now perceived to be South Africa’s premier Business Brokerage. Led by CEO Ian Craig, the company is based on strong business ethics, honest representation and admirable efficiency. LINK South Africa has brokers in over 30 locations around the country, including all major cities. One of LINK South Africa’s objectives is to ensure that a representative is easily accessible to Sellers and Buyers of businesses anywhere in South Africa. With Master Franchisees, Franchisees, Area Development Managers and Business Brokers countrywide, their focus is solely facilitating the buying and selling of businesses.
LINK South Africa 57 Constance Cawston Road Westville Durban KwaZulu-Natal 3629 Ph: +27 31 266 5390 Fax: +27 86 672 6355 Email: southafrica@linkbusiness.co.za Website: www.linkbusiness.co.za
Ian Craig Managing Director LINK South Africa
LINK South Africa prides itself on the fact that they work to demanding standards and have an entrenched culture of professionalism, like all LINK franchises. It is with great pleasure that we welcome Renwick to the LINK Network as LINK South Africa.
Business Broker 19
INTELLECTUAL PROPERTY
How Intellectual Property contributes to the value of an enterprise
What are Intellectual Property (IP) Assets? An enterprise’s assets may be broadly divided into two categories, namely: • Physical assets - such as buildings, plant, equipment, financial assets, infrastructure; and • Intangible assets - which range from human capital, relationship capital, goodwill, intellectual property (IP), and other intangible fruits of an enterprise’s creative and innovative Hennie Liebenberg capacity. B.Sc (AM), B.Eng (E/E) The most common types of IP that Associate businesses create and/or use are: B.Eagar Patent & • Inventions, which include new and Trade Mark innovative systems, apparatus, Attorney devices, processes, methods, software, compositions; • Designs, which include the visual appearance of manufactured/ handmade products, including visual features of shape, configuration, ornamentation, pattern; • Branding, which includes trade marks that may consist of logos, business names, product/service names, slogans, colour combinations, sounds, trade-dress; • Publications and Printed Materials which include websites, brochures, letterheads, business cards, business manuals, training manuals, user manuals, drawings, images; and • Confidential Information which includes know-how and trade secrets which may include a client database, a supplier database, financial figures, in-house business procedures, marketing plans.
is that they can transform intangible assets into exclusive property rights. In short, legal IP ownership can transform intangible assets into valuable exclusive assets that can have real benefits in the market place, such as:
CAUTION! Only a person can create IP. Consequently, the only way that an enterprise can obtain legal ownership of IP is by way of an appropriate legal mechanism. Does your business own the IP it uses?
It follows that an enterprise that has solid ownership of its IP can benefit both the seller and the purchaser of the enterprise. The seller can gain maximum value for the enterprise’s IP and the buyer obtains certainty concerning IP that is actually transferred with the enterprise. In addition, a smooth transfer of IP rights avoids consequential illegalities that may be associated with broken links in the chain of IP ownership transfer.
The Value of Intellectual Property (IP) Assets to an Enterprise A crucial point about obtaining legal ownership rights in intellectual property 20 Business Broker
•
•
• •
The power to control use of the IP, including: ÐÐ Stopping unauthorized use of the IP by competitors, ÐÐ Licensing the IP out to generate extra revenue, and ÐÐ Selling the IP for extra revenue. The power to leverage the IP, including: ÐÐ Encouraging investors to invest in the enterprise (reduced risk of direct competition), ÐÐ Increasing the fair share size in business combinations, ÐÐ Borrowing money against the IP, and ÐÐ Increasing the overall business valuation. Obtaining accounting/taxation benefits Creating a ‘smart’ and ‘intellectual’ business image
Intellectual Property (IP) Assets and the Transfer of Enterprise Ownership Traditionally, physical assets have been responsible for the bulk of the value of a company. The situation has changed significantly in recent times, so much so that in some types of enterprises their intangible assets become more valuable than their physical assets.
IP Ownership Due Diligence Audits One way that an enterprise can take the first steps to benefit from its IP assets and extract their full value is by conducting an IP ownership due diligence audit. Broadly, this entails identifying the IP, assessing ownership of the IP, and forming an action plan to ensure ownership of the IP where still possible. An IP ownership due diligence audit can mitigate these risks, and should be conducted by an experienced IP professional. It’s important to pick your IP advisor carefully. Identifying IP, defining IP rights, and applying the IP laws strategically are as much an art as a skill. Quality, cost, and time management should all form part of a professional service that facilitates a sensible valueequation.
Take Action Now The more valuable the IP assets of an enterprise, the greater the risks that others may make use of it without having to pay for it. Time erodes the ability to leverage your IP effectively. For example: • Once an employer is imbued with confidential know-how in the absence of an effective employment agreement, he or she may be vulnerable to the risk of resignation and a transfer of all that knowledge to your competitor; • Once an invention is made available to the public, it may no longer be possible to obtain valid patent protection; • Public release of a design before an application to register the design is filed could destroy any subsequent opportunity to protect that design; • Once a brand is diluted, brand exclusivity may never be restorable. Take action now, prevention is better than cure! ______________________ Written by: Hennie Liebenberg , Associate, B.Eagar Patent & Trade Mark Attorney, M: 0401 253 665 E: hennie@beagar.com.au www.linkbusiness.com.au
Business support
Take Your Business to the Cleaners Mark Jensen Partner SolutionWise
I
t’s amazing, when selling our car or home we spend considerable time and money making certain it looks great and everything is working to ensure it attracts the highest price and sells quickly. Typically we have limited time and need expert help, thus engaging specialists to do some of the work; mechanics, detailers or a professional valuation.
Service History - One of the essentials of presenting a business for sale is your past figures. Undertake a simple Business Audit and ensure the Financial History is well presented. In addition, comprehensive Monthly Financial Reports for the current year will be a significant advantage and have your Customer Database up-to-date. This is also an opportunity to show off your successes.
list for Corporate Governance obligations and issues.
Surely the same applies when preparing a business for sale? Then why is it many of us don’t do this when selling our own business? So let’s get your business ready to sell with a spruce up to increase its value, speed the sale process and keep your stress levels in check.
Tune Up - There’s never been a better time
And finally, list your business with a well established brokerage and don’t be afraid to spend money on marketing your business for sale, the more people who see it the better your chance of a sale.
Presentation - You don’t get a second chance at a first impression. Time for a little face lift with a good tidy up, some fresh paint and new signage to improve your street appeal, as buyers are likely to ‘drive by’ or be a secret shopper. Update your brand presentation with refreshed stationary, promotional collateral, staff uniforms and website. Remember websites are the new ‘shop windows’ and potential buyers are going to research on the Internet comparing other businesses for sales.
Repairs and Maintenance - Unless you
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sell well below market value, the buyer doesn’t want to purchase a business having to spend time and money fixing things, so everything needs to be in order and working well. Ensure you have your basic operational requirements in place and up to date, like your Policies and Procedures Manual and Occupational Health and Safety requirements. These items will build the internal capability of the business so its success is not dependent on you. www.linkbusiness.com.au
to create or update current operating budgets which clearly show a strong Profit and Loss (P&L) and Balance Sheet. It is best to prepare a three year Business Plan and Financial Forecast including Cash Flow Projections and develop a Marketing Plan. These will be vital if the buyer requires finance. If the success of the business relies solely on your involvement then it is important to create an independent organisational structure. Consider having an experienced General Manager in place or at least have subordinates skilled in the administrative activity you undertake on a daily basis.
Detailing - The easier you make it for the buyer, the more likely they will buy. Ensure the premises and equipment leases are updated and be ready to demonstrate you can clear any finance on the business at settlement. Have effective Business Systems established and formal operating Policies and Procedures. Even put simple staff Engagement Agreements, Job Descriptions and Key Performance Indicators in place and ensure all staff entitlements are accounted for.
Registration and fees - All too often a sale cannot be completed due to Local, State or Federal Government requirements not being up-to-date or in place. Write a check-
Some examples are: Business and Business name registrations, Trade marking, Design and Systems Patents, ISO accreditation, BAS statements, Taxes payments and Industry registrations or association membership fees.
Advertising and promotion -
There is a lot to do, so don’t be afraid to engage the support of a Business Specialist, a wise investment for a greater return. They will help: 99 Get your Business in order 99 Make it easier for the Broker 99 Achieve a lot better sale price 99 Remove after sales support issues 99 Remove staff fears and generate goodwill 99 Build confidence in the buyer and financier 99 Sell the business quickly with a smoother transaction ______________________ SolutionWise supports SMEs on all aspects of business and prides itself on providing practical solutions for businesses in the real world. Our team of highly experienced senior business executives, past business owners and former CEO's have an impressive record of success across numerous industry sectors. Want to know more about how to improve your business call Mark Jensen, Partner, at SolutionWise - Mobile: 0418 488 188 Email: mark@solutionwise.com.au Web: www.solutionwise.com.au Business Broker 21
INSURANCE
WHAT IF...
The Decision To Sell Your Business is Taken Out Of Your HANDS? Tim Ross Ross Financial Group
CASE STUDY
res in a owned 50% of the sha John died n Dave and John each whe ss ine bus g rin successful manufactu . dly suddenly and unexpecte e Suzie inherited by his wif Buy Sell John’s shares were bec no was re the e aus d to ige via his Will and, obl not was ie Suz Agreement in place, Dave and Dave is not obliged sell the shares to from Suzie. to buy the shares
FURTHERMORE: • There was no agreed price or timeframe for the transfer of John’s shares • There was no insurance in place to enable Dave to buy the shares, and • Dave doesn’t have enough funds to buy out Suzie and neither does he have the capacity to borrow the money. TO FURTHER COMPLICATE MATTERS, Suzie is entitl to the same management rights and share of theed profits as her deceased husband, while Dave is doing 100% of the work and only receiving 50% of the profits.
W
hen contemplating the sale of our interest in our business most of us imagine that this will come at a time and in a manner of our choosing. However, unexpected and sudden events such as disablement or premature death could strike any of us at any time. Tim Ross explains that if you are in business with other people you should consider establishing a Buy Sell Agreement funded by insurance.
been avoided if John & This outcome could have advice and executed ial anc fin ght sou had Dave by insurance. By ded fun , ent eem Agr l Sel a Buy ld have received wou ie Suz gy, ate str s thi using urance policy in ins the m fro ds cee pro the her interest in the exchange for handing over e. Dav to ss busine ly compensated while Suzie would have been ful % ownership of the 100 en tak e hav ld wou Dave % of the profits. 100 ed eiv rec and ss busine
What is a Buy Sell Agreement and how does it work?
•
•
A transfer agreement (which outlines what will happen to each principals business interest if certain events occur and how the interest will be valued), and A funding agreement (which outlines how the money will be raised to finance the ownership transfer and who will receive it).
Should a principal die or become totally & permanently disabled the Buy Sell agreement outlines the way forward for the individual or his estate to dispose of their share in the business. In the absence of such an agreement such circumstances are likely to become very distressing to all parties especially when one considers that there is usually an accompanying high level of extreme shock and emotional turmoil. 22 Business Broker
There are a number of ways a Buy Sell Agreement can be funded. For example, the remaining principal(s) may be able to buy out the departing principal’s interests using their own or borrowed money. However, insurance is usually considered the most cost effective and efficient way to raise sufficient capital in these circumstances. To find out whether you should consider establishing a Buy Sell agreement and to consider funding options you should speak with a financial adviser who specialises in business insurance cover. A financial adviser can also review your insurance needs over time to ensure that your cover remains relevant to your circumstances and competitive within the marketplace. ______________________ Tim Ross of Ross Financial Group is a business insurance specialist. For further information on this article contact Tim on 07 3257 3494 or email info@rossfinancialgroup.com.au www.linkbusiness.com.au
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A Buy Sell Agreement is a legal contract between business principals that usually comprises two components:
Adding Value
SOLICITOR
SEEK ADVICE FIRST
Business owners, from the day they start trading, are already preparing for the eventual sale whether they know it or not. Corey Radcliff reports that as your business grows you should continually seek advice and guidance from your accountant, business advisor, mentor or lawyer. The decision to sell should be made only when your business is in its best condition.
T
he most common mistake made when selling a business is not having a proper understanding of what you are selling and what someone is looking to buy.
Compliance through corporate governance, taxation, industry specific licensing, product safety, and proprietary rights in assets, trade marks and intellectual property will continue to develop with more burden to business owners imposed by government.
What are you selling? It may sound strange, but new developments in law, accounting practices, and industry standards mean that the structure of your business and its sale may be the most important aspect to consider. Will you sell business assets, which attract stamp duty for the buyer? Or will you sell shares in your trading company, which may not. Are you prepared to offer buyers a restraint of trade in exchange for them paying for goodwill? Could you work with the buyer after the sale to assist in the handover and get the best price possible? Some of the most successful sales we have observed have involved a trade sale where the principals have continued on for many years with new investors to provide genuine synergy and financial resources for the benefit of both parties.
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Discussion with your advisors and identifying strengths and weaknesses in your business could help determine the structure of your sale.
Make sure you bullet proof your business to survive due diligence by offering up as much information as possible to potential buyers. Your advisors will often be able to assist in reviewing compliance issues to provide reasonable explanations for any issues or to rectify them completely. Don't wait for buyers to discover problems or you may have to renegotiate your position at great cost.
What can't you sell? Carefully review supplier agreements, service contracts, licenses, leases, finance agreements and employment contracts. Standard agreements may seem simple enough but the fine print usually hides some strong penalties and termination events if you sell your business or attempt to assign an agreement to a buyer. Personal agreements sometimes cannot be transferred with the business. If crucial plant and equipment cannot be sold, the buyer could walk away leaving you at square one.
Are you compliant? The greatest obstacle to any successful sale is surviving due diligence. Lawyers, accountants and bankers may scour through your records looking for weaknesses to reveal to the buyer. www.linkbusiness.com.au
Ask these stakeholders before you sell, what their criteria for considering an assignment so you know what to look out for. Some may require the buyer to meet a financial standard
or may not release any personal guarantees or bonds you have provided.
Have you got it wrong? Without knowing, business owners can assume the way they run their business is lawful and because performance is good, they are immune to risks. By far the most common mistake is whether workers are employees or contractors. We recently acted in a purchase of business where all workers were engaged as contractors. On review it was revealed that workers were actually employees and in order to get the sale completed, the seller had to offer up substantial payments to our trust account for employee entitlements, PAYG and long service leave.
What is your market? Knowing your buyers and what they want is important and you should seek advice from agents and brokers with experience and skill. They speak to business buyers everyday and know what to look for. You might be surprised.
Get Advice Investment in sound advice and preparation to sell your business will ensure a smooth sale, a happy buyer and greater return on your investment. ______________________ Written by Corey Radcliff LLB., Legal Director, Radcliff Taylor Lawyers, Ph: 07 55788245 Fax: 07 5578 8254 Email: cradcliff@rtlawyers.com.au Website: www.rtlawyers.com.au Business Broker 23
lease consultant
Watch This S P A C E for Leases AASB 138 is the Australian equivalent of IAS 38 (International Accounting Standards) pertaining to the quantification and reporting the intangible assets of the business on the balance sheet. Intangible assets: include brand names, patents, trade marks, etc, and of course leases.
trademarks and goodwill of a business.
The concept came to my attention at the first World Valuation Congress (WAVO) in Singapore in 2006. I incorporated and expanded the thinking into my paper “Settling rental disputes by expert determination” – see Google which I presented the following year at the second World Valuation Congress in Beijing – see extract below.
A business making no net return has negative goodwill, so the host that houses it – a shopping centre will have significantly diminished value!
Two scenarios, two businesses in two similar centres with similar business potential: • First, the landlord with flexible leases and security of tenure; who manages tenancy mixes; procures, apportions, charges and audits outgoings and utility charges efficiently; properly promotes and allows market forces to drive development; • Secondly, the landlord who develops centres he owns and manages; duplicates tenancy mixes; erodes the cash-flow via profit on management fees, outgoings and utility charges; inflates refits via subsidiary companies before they are depreciated; whose leases are inflexible, have fixed increments and limited/short tenure. Comparing and contrasting the two is easy. Doughnut franchise one has a strong balance sheet and goodwill whereas franchise two, which also cost $250,000 to set up, will have little/negative value because AASB 138 requires the value of the lease to reflect negative value of the intangible assets, including the lease. Double whammy – intellectual property and goodwill The double whammy will be the adverse affect on intellectual property,
Staff with limited employment, because the business has no tenure, will move on; intellectual property associated with the business or customer lists and addresses, shown as an “asset”, must be given negative “value”.
AASB 138 will become an important consideration, from a valuer’s point of view, to determine rents and asset valuations and will provide a “check and balancing factor” for the professional valuer to lean on. Conclusion: AASB 138 in my opinion will force both Landlords and Tenants to significantly lift their game insofar as negotiating fair, flexible and longer leases are concerned. A negative “bundle” of leases on a Landlord’s balance sheet could be highly detrimental to valuations. Valuation standards will have to lift and Landlords will have to plan ahead as to when they want leases to terminate to renovate/refurbish, etc. It has come to my attention that landlords (International Council of Shopping Centres) have sought exclusion from having to comply with their leases being "valued" as an intangible asset on their balance sheets and the specific provisions of IAS 38 or AASB 138. It is beyond belief that any organisation or group would seek exclusion from worlds best practice; in fact from the possibilty of "adding" value to a bundle of leases on their balance sheet(s). ______________________ Don Gilbert is a specialist retail valuer and arbitrator. Website www.aaapc.net.au and www.leaseconsultant.com.au
Factors Adding or Decreasing the "value" of a lease. The Table below lists and suggests some concepts that would add or detract from the intangible asset value on a lease agreement and below that is an example of the same. Factors adding “value”
Reducing or negative value
Comment
Long tenure say 5+5+5+5 years
Shorter tenure say 4 – 6 years
Leases in the UK can be 10+10+10 years, with automatic renewals. With less tenure, one must amortise set-up costs over shorter term.
“Market rent” can be ordered by court in UK
Rent well above “market rent”
Rent established using principles in tenancy legislation and definition of market rent vs gazumping viz. duress, misrepresentation, etc.
Low set-up costs
High set-up costs
Flexible lease terms, regular reviews to market rent
Inflexible lease, rigid rental structure viz. CPI + 1.5% pa
A combination of the above
Same
Affects amount to amortise over term and residual available for rent. Flexible leases result in market rental outcomes and lower risk on income streams. Rents must be able to rise and fall without a ratchet. With no options or renewal opportunity, business must selling down stock and close.
Other factors which will increase and decrease the value of a lease Good and poor management of tenancy mix
Diminution of cash flows must be taken into account under AASB 138, eg. failure to manage tenancy mixes, causing higher risk.
Valuers who do not adopt market rental into rental valuations or cannot interpret “evidence”
A valuer who cannot adopt or “test” evidence and separate the business and site goodwill should not determine market rents and produce inflated valuations which often require forensic financial analysis.
Failure to provide quiet use and enjoyment
Reduces business potential and decreases value of lease.
Failure by Tribunals and Courts to enforce legislations and make decisions in equity
This will put pressure and force our judicial systems to award damages in equity.
Investment in a court or tribunal action
An “investment” to protect one’s position viz. a director of a retail business, forced to protect their asset under corporations law via a court action, might see a favourable outcome as an “asset” on the balance sheet.
24 Business Broker
www.linkbusiness.com.au
BUYING A BUSINESS? If you plan on buying a business, make sure the accounts are annexed to the contract. Briony Taylor discusses how to get the most out of the standard contract warranties.
Finan.
B
uying a business? – Insist on a copy of the seller’s accounts being annexed to the contract!
Quite often sellers provide trading figures and other financial data to buyers during precontract negotiations. For a large number of buyers that information forms an important part of the decision-making process to purchase the business. However, unless that information is annexed to the business contract (or otherwise properly described in the contract), it carries no clear warranty from the seller that the information is correct. The standard conditions of sale which form part of the REIQ Business Sale Contract provide some important warranties in clause 8.1 to assist the buyer, and clause 8.1(i) provides the relevant warranty for the trading figures and financial data attached to the contract, as being true and correct in every particular. If it becomes apparent that those trading figures or financial data are not true and correct in every particular, clause 8.2 provides various options for the buyer – such as a right to:
" Insist on a copy of the seller's accounts being annexed to the contract."
• •
Terminate the contract and sue the seller for damages; or Affirm the contract and sue the seller for damages and/or specific performance of the contract.
The buyer also has the right to any other remedy available to the buyer under the contract or under the common law.
photo STOCK.XCHNG IMAGE
Briony Taylor Solicitor Active Lawyers
It is therefore critical that the accounts are attached to the contract (or otherwise properly described in the contract), otherwise the warranty does not apply. Whilst you may still have a claim against the seller for misrepresenting the financial position of the business or engaging in misleading conduct (and whether you would have a claim or not would depend on the relevant facts), litigating those claims may not be anywhere as simple as litigating a breach of warranty that the accounts are not “true and correct in every detail”. What else can be done to ensure the business is viable? There are of course other clauses under the
www.linkbusiness.com.au
SOLICITOR
standard conditions of sale (QLD) to assist the buyer to verify the figures and financial data, such as: •
•
Clause 37 provides the buyer with the right to verify the financial accounts of the business, and to terminate the contract if the buyer is not satisfied that the accounts are substantially true and correct. Clause 11 provides for a trial period if required by the buyer. A trial period can be very useful, particularly for cash based businesses as it allows the buyer to essentially stand beside the cash register and check the trading performance first hand.
In addition to these standard conditions, an appropriately drafted special condition which provides for a due diligence period can also be of some significant assistance to a buyer in verifying the trading figures and financial data (among other aspects of the business). We strongly recommend buyers involve a suitably qualified accountant and/or business adviser to review all of the accounts of the business and provide an independent assessment as to the business. This exercise should be done as early as possible to save the buyer incurring unnecessary costs in proceeding with a business which may not be as viable as first thought. A prudent buyer would be well advised to take advantage of clause 8.1(i), together with the standard conditions discussed above and a due diligence special condition, to ensure the financial information the seller is giving the buyer is true and correct in every particular. Active Lawyers & Consultants provide commercial legal advice to prospective buyers and sellers in respect of buying or selling a business (including franchises). We work closely with our client’s accountants, bankers, tax advisors and other professional advisers to effectively address the legal and commercial issues which may arise when buying or selling a business. ______________________ If you are looking at buying a business and would like to know how to best protect your interests, please contact us at 07 3343 7096 or visit www.activelawyers.com.au Business Broker 25
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LINK
Looking for a NEW CAREER? Why not become a Business Broker at LINK Tim Craft, Director, LINK SE QLD discusses why you will be successful at LINK
Everyone that has ever built up a successful and valuable business has put in long hours, invested a lot of money and deserves to reap the financial rewards that they have earned when it comes time to sell their prized asset. They can only achieve the best results through engaging a Business Broker that has had the necessary training, gained the required knowledge and has a strong support infrastructure and team. At LINK, we have produced a comprehensive procedure manual that has been written by experienced and successful business brokers. Like a successful franchise we have all of the necessary systems, support structure and experience to ensure that a new broker succeeds. The selling of a business is all about getting the facts and figures right, presenting it to perspective buyers in an easy to understand format then being able to guide and manage the sales process right up until the contract settles and the new owner has taken possession of the business. The LINK system assists and helps manage this process better than any other business brokerage that I have seen in my 15 years experience. Our broker support software package, BOSS System, was designed solely for business brokers to enable us to best prepare a business for sale and gather all of the required information that a buyer would 26 Business Broker
expect and get it to market in an easily comprehendible format. It also helps us market and advertise businesses for sale and through its database management system allows us to update buyers and sellers with important information as it is received. The sale process can be completely facilitated and managed through BOSS which ensures we are able to provide buyers and sellers with excellent service and a very pleasant experience. In saying this however, systems and software packages don’t sell businesses, people do. This requires knowledge, experience, integrity and trust. All of which is learnt and developed in our training package as new brokers get to work closely with some of the most successful and experienced business brokers in the country. As well as systems, we have developed advertising and marketing strategies that we tailor to sell each individual business and ensure that it gains maximum exposure to the market while maintaining the strictest of confidentiality for the seller. You cannot sell a secret and must be able to convey as much information as possible to your target market. The business brokers that you work with and learn from are also the most respected in the industry by Accountants, Solicitors, Business Advisors and Bank Managers through their experience and results.
______________________ Interested in becoming a Business Broker? • SE QLD, call Tim Craft 0411 874 452 or email timc@linkbusiness.com.au • NSW, call Mark Jason (02) 9899 1999 or email markj@linkbusiness.com.au • Visit our website for more information www.linkbusiness.com.au
photo SHUTTERSTOCK image
B
usiness people and professionals want to deal with people that have a thorough understanding of the service and results that they require, especially when it comes to selling their business. You would not go to your local GP for open heart surgery, so why would you entrust someone unqualified with the very important task of selling your business?
www.linkbusiness.com.au
LINK
Business opportunities Here is a selection of businesses LINK has for sale. For more business opportunities visit www.linkbusiness.com.au
photo Supplied & SHUTTERSTOCK images
28 South East Queensland 33 New South Wales
TM
www.linkbusiness.com.au 27
South East Queensland
Boutique Pet Resort + Freehold Net Profit $324,341pa & Under Management
• Established 6 years • Under Management with six • •
staff who run the day-to-day care of the animals at this resort style kennel Licensed to house 50 dogs and 36 cats Freehold consists of 12 acres of land and large luxury
•
house of about 50 squares and a large building that houses 16 kennels. Lifestyle with income
TM
Well Established Flooring Business Last 3 years EBITDA $88,628 or working owners profit $165,000pa
• Has completed projects for •
Asking $3 Million Ref 10602 Contact Tim Craft Ph 0411 874 452
Palazzo Versace, Jupiters Casino, Dream World & plenty of Gov't Jobs Getting very busy now with flood damage work
• Well trained and courteous staff in place and a large amount of repeat business
• Opportunity for Franchising • Price includes all P & E valued at over $70,000
Asking $250,000 + SAV($20k) Ref 10481 Contact Guy Cooper Ph 0431 227 644
BUSINESSES WANTED TOP prices are being paid for businesses in the following industries:
Xpresso Delight Gold Coast Franchise!! Newly established September 2010
• Earn lucrative returns while • •
working less than ten hours each week! Seize the opportunity to profit from one of the fastest growing markets on the planet! Unique franchise with amazing potential!!
• BRW Fast Franchises 2009 &
99 Accounting Practices $300K - $2Million 99 Financial Planning $300K - $5 Million 99 Manufacturing $1 Million - $7.5 Million 99 Wholesale $500K - $5 Million 99 Import/Export from $500K - $15 Million 99 Fully Managed Businesses $500K - $10 Million If you own a business or know of someone wanting to sell their business then contact:
2010!!!
• Top 10 Franchises as featured on Channel 9 "A Current Affair"
1300 763 668
(all information will be held in strict confidence)
Asking $69,000 + SAV + Xfer Fees Ref 10632 Contact John Kyriazis Ph 0404 155 984
Some images shown are for illustration purposes only and are not necessarily examples of the business’ products or services
28
www.linkbusiness.com.au
Phone 1300 763 668
South East Queensland
TM
One of the BEST & Privately Owned
Bearings, Nuts and Bolts! Net Profit $209,680pa
• Wholesale/Distribution • • •
business established 14 years Located North Brisbane selling niche products to a wide variety of industries Solid customer base in a strong growth area Fool proof systems in place and all are well documented and simple to follow
3 Years Average Net Profit $321,988pa
• Long serving staff that are dedicated to customer service Strong Growth Business! Asking $495,000 + SAV($140k) Ref 10429 Contact David Fitzgerald Ph 0411 693 588
• Established in 2004. Tier 1 •
Licensed with four terminals In highly sought after location in very busy shopping centre on Gold Coast with plenty of parking
• Solid lease - rent is approx. •
7.5% of turnover Has 900 PO Boxes with over 90% let and sells a variety of other products
• Services include: bill • •
payments, banking, photocopying, faxes, etc Secure financial stability Ideal family business
Great Lifestyle! Asking $1,700,000 + SAV ($120k) Ref 10441 Contact Guy Cooper Ph 0431 227 644
Business is Booming!
Garden Nursery and Cafe
Average Net Profit for 3 years $350,822pa
Net Profit $165,000pa
• Established 4 years and can
• Bonus! Major Government
be run from anywhere Niche market with quality in demand products Strong book of projects on the horizon Quality, loyal and very skilled contractors in place Little competition and well respected brand
and Council work expected from recent QLD floods Excellent ROI with plenty of room for future growth!
• • • •
•
Asking $885,000 + SAV Ref 10290 Contact David Fitzgerald Ph 0411 693 588
• Business with freehold • • •
established 20 years on popular Mt Tamborine Over 6000m2 of growing area Great wholesale and retail nursery with add-on cafe and homewares Easily managed with excellent staff in place
• Low overheads and great margins
• Niche market with strong client base
• Price excludes freehold Asking $295,000 + SAV($150k) Ref 10637 Contact Myron Plumb Ph 0415 303 370
Some images shown are for illustration purposes only and are not necessarily examples of the business’ products or services
Phone 1300 763 668
www.linkbusiness.com.au 29
South East Queensland
TM
Red Devil Radiators and Car Air-Conditioning Net Profit 2010 $119,730
• Established icon business
• Great location with an
•
• Strong growth area • Amazing opportunity to
• • •
TYRES AND MORE TYRES Net Profit $308,751pa Established 30 years in a country town that is booming. And whilst is in the centre of all the gas and coal exploration it will only get much bigger and busier. Present owner is looking to retire after owning this business for 14 years.
Strong links with suppliers and long lease available to new owner. Huge potential for continual growth for many years! Asking $895,000 + SAV($150K) Ref 10455 Contact Tim Craft Ph 0411 874 452
located in South East Queensland Strong brand with extremely high consumer recognition Well trained and reliable staff Business unaffected by economic conditions Profits set to increase substantially with new centralised warehouse
excellent lease.
make huge money!
Asking $220,000 + SAV ($30K) Ref 10448 Contact David Fitzgerald Ph 0411 693 588
"TWO" Regional Master Franchises In the Home Service Industry Well known and respected national franchise system. (1) 8 Franchises in place. Projected Net Profit 2011 $152,502 (2) 11 Franchises in place. Projected Net Profit 2011 $162,750 Existing Master Franchises are part of a unique Franchise system that will suit a person
or a family with the ability to manage a team or Franchises. If you are looking for a rock-solid investment into a well established Franchise business, then you are making the best decision! Asking (1)$250,000 (2) $290,000 Ref 10445 Contact Guy Cooper Ph 0431 227 644
Some images shown are for illustration purposes only and are not necessarily examples of the business’ products or services
30
www.linkbusiness.com.au
Phone 1300 763 668
South East Queensland
TM
Sheet Metal Fabrication Manufacturer
Mini Crane Hire Business
Turnover of $10million and growing rapidly
Reach NEW Heights!!!
Major player in its field in Queensland. It is showing a net of around $2.4 million for 2011.
Huge forward orders - services industries including mining, Gov't, telecommunication, etc.
established mini crane hire business as your main work, or expand your business into another source of income!
Excellent long term and key qualified employees in place. High tech plant & equipment valued at $2.4 million. Large premise & long lease in place.
Take advantage of this well
Asking $4,800,000 + SAV($1M) Ref 10446 Contact Tim Craft Ph 0411 874 452
Operating from Brisbane,
P & E value is $425,000 with 4 mini cranes, 2 truck mounted cranes, a trailer and a ute. 2010 net profit $115,711. Last 3 years average net profit $174,546!!! Asking $449,000 Ref 10497 Contact John Kyriazis Ph 0404 155 984
servicing all of Southeast Queensland.
Join Australia's Fastest Growing Outdoor Franchise!
Garden Maintenance Business!
2 x Territories to be sold - GC & GC South
Year-round residential and commercial work. Would suit an operator in a similar industry (landscaping) or someone looking to buy a business with immediate cashflow. Current owner works a minimum amount of time (approx. 3 days per week) with 2-3 months away each year!!!
• • • • •
Ultimate lifestyle Camper Trailer Hire & Sale business Growing industry with 48 franchises Australia wide Strong Franchisor support with over 10 yrs experience Excellent systems in place and very easily managed Price includes equipment valued at $50k
• •
Recession proof business, well established!
Suit Owner/Operator or husband/wife team Simple to run, work your own hours from home using your PC and phone.
Asking $90k & $108k per territory Ref 10621 Contact Myron Plumb Ph 0415 303 370
This business has been
established for 8+ years with a large client base. Net Profit FY 2011 $88K + (est) Plant & Equipment value of $30k (Ute is included in asking price but optional). Call me! Asking $139,000 (Ute optional) Ref 10631 Contact John Kyriazis Ph 0404 155 984
Some images shown are for illustration purposes only and are not necessarily examples of the business’ products or services
Phone 1300 763 668
www.linkbusiness.com.au 31
South East Queensland
TM
Fruit & Vegetable Retail & Wholesale
Waterproofing Business
Net Profit $188,000pa
2010 EBITDA $146,450 Owner/Operator earnings $260,242 (2010)
• Est. 34 years on the southern • Low overheads and high • • • •
end of the Gold Coast Very easy to operate with great staff in place Long established clients with sales exceeding $20K per week and growing Recently added grocery & convenience items Equipment valued at $145K
turnover
• Very strong CASH business • Owner must sell due to other business interests Secure this fantastic opportunity today!
Asking $195,000 + SAV($20k) Ref 10646 Contact Myron Plumb Ph 0415 303 370
• Successful and respected
• •
contracting business providing services to the commercial sector within the construction industry Strong referral base from product suppliers Ideal opportunity for trade person or a company already
involved in this industry
• Showing strong growth for 2011
Asking $395,000 + SAV($20k) Ref 10634 Contact Guy Cooper Ph 0431 227 644
Exclusive Firearms Distributor/ Importer
Sub60 Express Couriers
Net Profit $128,988pa
• Established 25 years • Operates Monday to Friday
• Established 21 years • Exclusive quality • • •
International brands Wholesale and Retail client base Lifestyle business Monday to Friday Products sought by Olympic style target shooters
• Strong internet presence • Freehold building also available for $295,000
Net Profit $172,620pa only
• Over 1,300 long standing
• Excellent systems and procedures in place
• Price includes freehold building
quality clients
• Well trained, long serving staff and contractors
Asking $195,000 + SAV($300k) Ref 10626 Contact David Fitzgerald Ph 0411 693 588
• A solid business poised for continual growth and ready for major expansion
Asking $920,000 includes freehold Ref 10628 Contact David Fitzgerald Ph 0411 693 588
Some images shown are for illustration purposes only and are not necessarily examples of the business’ products or services
32
www.linkbusiness.com.au
Phone 1300 763 668
New South Wales
TM
Marble and Granite Business
Exclusive Distribution Rights!
Net Profit $77,710 (EBITDA) for 2011FY (EST.)
Price includes start-up stock of $22,500
40 year history servicing from the Gold Coast to as far North as Port Douglas and South to Yamba!
World leader in the manufacture and supply of exclusive waterless urinals is looking for exclusive distributors in ALL States; • Established International brand • Can be homebased or would make a great add on or excellent small business
Fully staffed and project managed, working from a purpose built factory centrally located on the Gold Coast! This business is for sale alone
or with the freehold factory as well! New lease available. Also purchase freehold factory for $1,250,000.
Asking $250,000 + SAV Ref 10465 Contact John Kyriazis Ph 0404 155 984
Body & Skin Care - Northern Rivers Net Profit 2010 $103,449 / Fit-out $300k+ Think of this Body and Skin Care salon as a clinic. Specialising in a variety of treatments for a variety of clients. Reap the benefits of this booming multi-billion dollar aesthetic industry. Solid 5-year foundation. Impeccable reputation.
High tech treatments. Beautiful river-front location in holiday accommodation building with plenty of parking.
Asking $197,000 + SAV Ref 10478 Contact John Kyriazis Ph 0404 155 984
• Very high margins Waterless urinals can be sold to plumbers, developers, builders and/or through tradelink and hardware stores Strong Growth Industry! Saving Water & Money! Asking $45,000 + GST Ref 10464, 10472, 10477 Contact David Fitzgerald Ph 0411 693 588
Importer/Wholesaler Engineering Products Net Profit $85,000 per annum For almost 24 years the business has supplied a comprehensive range of Industrial Power Transmission Products to a loyal client base. Situated in Western Sydney the business employs two full time Sales Engineers and turns over approximately $570,000 per annum.
Well known and extremely well respected this business is ready to grow to the next level.
Be quick this one won't last! Asking $200,000 + SAV Ref 10633 Contact Mark Nesbitt Ph 0411 228 899
Some images shown are for illustration purposes only and are not necessarily examples of the business’ products or services
Phone 1300 763 668
www.linkbusiness.com.au 33
New South Wales
Manufacturing - Import/Distribution Established for over 30 Years in Sydney The business has a consistent trading history and has strong brand awareness in its specialist market. The products are regarded as excellent quality and the company has a reputation for service and product development.
The business has strong relationships with both end users and distribution network. Opportunity to grow in existing and new markets! Asking $540,000 + Inventory Ref 10063 Contact John Bentley Ph 0418 288 117
Iconic Modern Italian Restaurant 1 Owner/Operator Nets $561,753pa
• Sydney Eastern Suburbs • Huge potential to trade lunch • Turnover $1,665,000pa Friday, Saturday & Sunday • Only 6 nights and 4hrs/week • All recipes and seasonal • Established 25 years dishes to be provided to • Same owner 5 years buyer with an extended • Seats 140 (sectioned areas) handover period • Prime corner on main street Asking $995,000 10506 • New kitchen, furniture and Ref Contact Mark Jason equipment
Ph (02) 9899 1999
TM
Gorgeous Cafe/Bar Inner West Sydney Net Profit $450,000 plus per annum
• Turnover in excess of $1.7M •
per annum Lease 5 + 5 years at less than 10% rental Primary service liquor license
• • Huge bar and night trade potential
• Currently operating short days
• Designer fit-out (minimalist) delivers relaxing and vibrant atmosphere with spacious open plan
Asking $750,000 Ref 10630 Contact Matthew Page Ph 0418 115 204
Gloria Jeans - Sydney Eastern Suburbs Nets Owner/Operator $184,000pa
• Brand new store must sell
due to other commitments
• Fantastic 5+5+5 years lease at only $52,000pa
Don't miss out on this bargain!
• Prime main shopping strip location
• Unsecured finance available • Organic improvement potential for business as it matures
Asking $495,000 Ref 10570 Contact Mark Jason Ph (02) 9899 1999
Some images shown are for illustration purposes only and are not necessarily examples of the business’ products or services
34
www.linkbusiness.com.au
Phone (02) 9899 1999
You will earn 20% p.a. return on investment as a minimum for 10 years* Perfectly suited for individuals and Self Managed Superannuation Funds Fully managed without the need for any day-to-day involvement from you Your chosen deployer will site, monitor, service and maintain your ATMs 24/7 * Return is paid monthly and based on the GST exclusive price
Your investment will earn 20% p.a. or better* even while you sleep!