Business Purchase or Start Up
Whether starting a new (or buying an existing business) the following should be considered to ensure you make an educated decision on your going into the business, including:
- Pro’s and Con’s of the industry
- Business Planning
- Marketing strategy
- Registration and licence requirements
- Name registrations (including ASIC and Domain’s)
- Tax Structures and Asset Protection
- Workplace Health and Safety (WHS)
- Tax Office Compliance – TFN, ABN, GST, PAYG, FBT
- Intellectual Property / Trade Marks
- Insurances – Prof Indemnity, Contents/Building, Public Liability,
- Workcover, Life, Income protection, Key Man
- Finance & cash flow requirements
- Staff and employment requirements and obligations (HR)
- Fixed and Variable expenses, break even analysis
- Management and reporting systems
- Roles and Responsibilities of staff
Important Points That All Business Owners Should Consider
- Is your business able to be sold?
- How quickly can it be sold and turned into CASH?
- Who would buy your business and why?
- What will someone pay for it?
- Who would pay the most for it?
Operations and Improvement
Sound business operation requires the right foundations. This means access to accurate numbers and key measurements in a timely manner so you know what is happening in the business at any point in time. Three main areas for business improvement include:
- Increasing Gross Profit margins
- Reducing overheads
- Growing sales.
Regular meetings, monitoring and implementation of your strategies enable you to quickly see improvements to your profits. Many businesses fail because of a lack of planning. It is imperative that business owners manage, monitor and measure business performance to know where changes can be made, and to see that business plans are working. Business owners must be able to regularly review and monitor performance, and make changes quickly.
What is wealth? To be wealthy simply means you can afford your lifestyle…… now, and into the future. Business owners should manage their affairs to grow and build wealth – and look towards reducing input into the business, and ultimately retiring. There are many ways that this can be achieved.
Succession Planning (or exit strategy)
A succession plan will help your business transition smoothly to the new owner – and derive more value. It clearly outlines your timeframe, expected sales value and who is your targeted purchaser.
It is highly recommended to plan your exit early, the sooner the better. That way you have time on your side to maximise the value of your business for sale.
Once your timeline is set you can then clearly set measurable targets to reach your businesses full market potential for sale.
It is important to know who your targeted purchaser is, being your family, an investor, a new working owner or your business team. There are many different strategies and planning solutions depending on your ideal purchaser.. So get planning your exit strategy – right now.!
Strategic Acquirers pay more for businesses.
Most business owners find it hard to believe that they should start thinking about the sale of their business from the first day of acquiring the business – but they should. Even experienced business owners get swept up with the daily operation of their business, and other distractions of everyday living – and forget that one of the most important parts of owning a business is to PLAN THE EXIT IN ADVANCE.
It’s actually pretty simple. Like any journey, we need to plan our final destination at the start of the journey, and then we can set a course, and plan the path to the end.
So, what’s involved? All that is required is to:
- Decide when you want to exit, and how much you will want to sell for
- Plan on how much profit the business will need to show to sell for the price that you want to achieve
- Set a program with targets and KPI (Key Performance Indicators) that need to be achieved to realise the price sought
- Plan to prepare the business for sale
- Seek advice from credible advisors to keep you accountable and “on-track”
- Measure your performance and adjust where necessary to hit targets
- Make it happen
Put together a team of advisors who can assist to achieve the outcome. The best team is one which supports your exit strategy.
The need to have an Exit Strategy is clear… “Failing to plan – is planning to fail”.
Business owners must have plans:
- A Business Plan
- A Marketing Plan
- An Exit Plan