YourBusiness - Past Business Broking Newsletters
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Winter 2011
Bridging the price gap between buyers and sellers: Read this before dropping your price |
In times of economic uncertainty as we’re seeing today, the distance between a buyer’s and seller’s desired business price becomes increasingly difficult to reconcile. What follows is one of the more creative solutions to this problem.
First we must define the variable that we can adjust to provide a solution. A business buyer wants a price that both adequately justifies the risks involved with a business, and a price that outweighs the returns of an alternative purchase elsewhere. A business seller needs a price that both satisfies their reasons for selling, and outweighs the alternative of continued ownership... read more. |
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Autumn 2011
Pricing Your Business: Why leaving room for negotiation can leave you out of pocket. |
As a broker I deal with this issue every day. I’ve seen it with every business type and size, so when I say this, you can know that I’m speaking only from experience: If you don’t price your business correctly it won’t sell.
Allow me to illustrate. You’re selling your business. Broker A performs a thorough valuation and values your business at $315,000. Broker B doesn’t perform a valuation and tells you they can sell it for $430,000. You look at these figures, and you remember all the hard work, money, time and effort you’ve put in and you think to yourself, “The buyers will probably talk me down anyway, but... read more. |
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 | Summer 2010-2011 Buying a Business VS Building a Business; Avoiding the pitfalls of early businesshood |
Is it better to start a business from scratch, or to buy a business? Though there’s nothing wrong with starting your own business, you must first be aware of the usual pitfalls and how to avoid them.
Based on the stories I’ve heard over the years, what follows is a cautionary tale with an outcome that could have been avoided.
A young man decides to open his own café. He budgets $150,000 for startup costs to cover the shop fit out, fixtures, stock etc, but as it so often happens, by opening day this figure ends up being much closer to $250,000. This may sound high, but it’s actually quite conservative... read more. |
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Spring 2010
Why are Today’s Business Owners Turning Down Their Best Offers? |
‘Holding Out’ can be a very successful negotiating technique, but when it comes to business sales, if you’re not careful, it could cost you more than just your hottest leads.
Six Months ago, I was approached by a client who wanted to sell her business. After the necessary preparation, it was placed on the market for $160,000 and the first wave of offers, though good, came in at around twenty percent less than she had wanted. Against our best advice, the seller contacted the buyers directly and instructed them to look elsewhere, choosing instead to hold out for better offers. Four months later, her business went into liquidation and was sold for stock. What did she do wrong?... read more. |
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Autumn 2010
Shortage of Good Businesses
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With the fallout from the GFC finally beginning to settle, buyers are returning to the market, but leaving empty handed.
As it stands today, there are still not enough good businesses to meet the ever increasing demand from buyers. Why is this the case?
The current trends suggest that sellers have been reluctant to put their businesses on the market because valuations have dropped.
Valuations, based primarily on trading profits, were strongly affected by the global recession in the 2008-09 financial year. Now however, ... read more. |
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