The New Job Security

When you think of going into business, what comes to your mind? Most people conjure up visions of a brilliant idea and building a company from scratch—successful for some but not usually without deep pockets, substantial risk and a workaholic lifestyle. There are no existing customers, no sales and little to no immediate revenue. You need to market your business, hire and train employees and hopefully establish a cash flow… all without a track record or reputation to go on.

 

These are some of the benefits of buying a business instead of starting one:

• Less Risk. You walk into an operation that already has revenue and profit.
• Relationships. You have a well established customer base, a good track record and a competitive edge because of the company’s tenure.
• Financing. The banks are more willing to provide financing to buy an existing business versus funding a new venture.
• Employees. Included in the purchase of a business are loyal employees who know every aspect of the company. You don’t have to reinvent the wheel by developing procedures, systems and policies, since the blueprint for running a profitable business is already in place.

Best of all, you don’t have to compete for that ever elusive “secure” corporate position that could evaporate, in the name of downsizing, restructuring or reorganization… taking your benefit package with it. That’s what the new owners Detlev and Anke Braatz considered with their recent purchase of Paulette’s Cleaning Services, a commercial cleaning business on Vancouver Island. “Despite our years of experience and education, we just couldn’t find jobs” says Anke. “So we looked for a business that was up and running, something we could easily do.” Thankfully,” she adds, “our business broker helped us protect our interests with a Due Diligence Checklist, a step-by-step process that was invaluable. Our clients are happy as are our 9 employees and we continue to have the support of the previous owner.”

 

Working for someone else is trading time for money, but doesn’t build equity. As an entrepreneur, you are the master of your own destiny.

 

If you are considering business ownership or the sale of your business, we can help. Visit our local website at http://www.bcbusinessbroker.ca/ or www.sunbeltnetwork.com/vancouverisland or phone 1-877-289-0969.

 

Consider More Than Money When Selling Your Business

Sure you want a big payoff, but when it comes to selling your business, money should not be the only consideration.  You don’t want just any buyer, you want the best buyer. Surprisingly, sellers don’t always choose the buyers offering the most money. Would you consider a lower price for a buyer that fits the company’s culture?  Would you consider an offer that’s considerably lower if it meant the difference between years of seller financing and cash at close? It’s common for deal structures to include a variety of options which must be carefully evaluated, long before you get to the negotiating table. You may not realize it, but you’re positioning and negotiating from day one of a sale. Be sure your priorities are well thought out or you might give a buyer the wrong impression. A prospective buyer may ask how long you’ll stick around after the sale and you may casually respond that you’ll be around as long as needed.  Then you find out that the buyer is thinking about a two-year transition when you and your wife had been discussing a potential move to Florida. Something like that could blow up a deal. Had your initial response been that you would be around three to six months and then could provide consulting services from Florida, the buyer would not be counting on long-term support. As a seller, here are 7 important questions to ask yourself:

1. Financing – Do you prefer a higher offer with some seller financing or a lower offer with cash at close?

2. Transition – Are you looking for a quick exit?  Does the buyer expect a lengthy transition?

3. Employees – Sellers are often very protective of their employees.  Will the buyer relocate or replace staff?

4. Ownership – Are you looking to maintain a minority stake for yourself or your family?

5. Legacy – Most sellers don’t want to cash out and watch the company erode. Ten years from now they want to look at a successful business that they had a hand in building.

6. Real Estate – Is the buyer interested in your building?  Some sellers prefer to keep the real estate and draw rental income. If the buyer doesn’t want your facility, how soon can you fill it?

7. Trust – Do you trust the buyer?  Some sellers will pass up higher offers to work with a buyer they feel better about.

Even if you know your preferences, you may not get everything you want when making a deal.  A reputable Business Intermediary will be sure that the right questions are asked to help you organize your thoughts, review your priorities and understand what the market will bear.  In the end, you’ll find yourself in a better position to negotiate and close the deal—without sacrificing your goals. Contact the Sunbelt Nanaimo office @ 250-751-7917 or visit our local website at http://www.bcbusinessbroker.ca/.

How To Grow Your Business Through Franchising

Do you think your business is unique? Have you considered replication through franchising? Do you have the necessary skills to use franchising as an expansion strategy? While it’s not the right strategy for everyone, for some companies the explosive potential that franchising affords is unparalleled in the world of business growth. Franchising has many attractive features, particularly when compared with more traditional methods of expansion such as opening more outlets on your own. Typically referred to as company stores, you own and operate these locations yourself. You provide the entire investment for the startup, and while you earn all the income, you are also responsible for the expenses. That’s why more and more entrepreneurs are choosing franchising as the best way to expand a great business quickly with minimal capital and risk. Here are a few reasons why:

• Franchise owners are highly motivated operators
• Franchisees assume the risk of succeeding or failing
• Franchises can open quickly, gaining an edge on the competition
• Franchisees are responsible for all hiring, leases, and unit-opening expenses, reducing your risk
• Franchisees are easily attracted because buying into a proven concept minimizes their risk

Is your business "Franchisable"? Before making the decision to franchise, you must first determine whether franchising is a viable strategy for your particular business.

BC Business Brokers, an affiliate of Sunbelt, can help you analyze your business and perhaps, take it to the next level. If you are contemplating the sale or expansion of your business and would like to discuss your options, contact our Nanaimo office at 1-877-289-0969 – we can help you. Feel free to visit our local website at http://www.bcbusinessbroker.ca/ or www.sunbeltnetwork.com/vancouverisland.