Top Categories by Impressions

Top Ten Businesses for November 2015

1. Restaurants
2. Home Based
3. E-Commerce
4. Health Fitness
5. Café Bars/ Coffee Shops/ Sandwich Bars
6. Retail Businesses
7. Franchise Businesses
8. Auto Repair, Service & Parts
9. Liquor Stores/ Convenience Stores
10. Home & Garden Businesses

Top Ten M&A Businesses for November 2015

1. Restaurants
2. E-Commerce
3. Gas/Petrol Service Stations
4. Professional Services
5. Retail Businesses
6. Services Businesses
7. Distribution Businesses
8. Leisure Businesses
9. Specialist Subcontractors
10. Construction Businesses

If your business is location-sensitive, which is almost always true for a restaurant, a retail operation, or, in fact, any business that depends on customers finding you (or coming upon you, as is often the case with a well-located gift shop) – the lease is critical. It may be too late if you already have executed it, but the following might be helpful in your next lease negotiation.

Obviously, a very important factor is the length of the lease, usually the longer the better. If the property ever becomes available – do whatever it takes to purchase it. However, if you are negotiating a lease for a new business, you might want to make sure you can get out of the lease if the business is not successful. A one-year lease with a long option period might be an idea. Keep in mind that you might want to sell the business at some point – see if the landlord will outline his or her requirements for transfer of the lease.

If you’re in a shopping centre, insist on being the only tenant that does what your business does. If you have a high-end gift store, a “dollar” type of store might not hurt, but its inclusion as a business neighbor should be your decision. Also, if the centre has an anchor store as a draw, what happens if it closes? The same is true if the center starts losing businesses. Your rent should be commensurate with how well the center meets your needs.

What happens if the centre is destroyed by fire or some other disaster – who pays, how long will it take to rebuild? – these questions should be dealt with in the lease. In addition to the rent, what else will be added: for example, if there is a percentage clause – is it reasonable? How are the real estate outgoings covered? Are there fees for grounds-keeping, parking lot maintenance, etc? How and when does the rent increase? Who is responsible for what in building repair and maintenance?

A key issue for many business owners is determining who holds ultimate responsibility for the rent. Are you required to personally guarantee the terms of the lease? If you have a business that has been around for years, or if you are opening a second or third business, the landlord should accept a corporation as the tenant. However, if the business is new, a landlord will most likely require the personal guarantee of the owner.

The dollar amount of the rent is not necessarily the most important ingredient in a lease. If the business is successful – the longer the lease the better. If it’s a new business, the fledging owner might want an escape clause. And, in any case, the right to sell the business and transfer the business is a necessity.

The projected revenue growth can be attributed to a broader range of healthier fast-food options providing some opportunities for expansion.

According to a recent report, consumers have revised their fast food eating habits and operators have responded by expanding healthy ranges and introducing new products to recapture this market.

Fast Food Operating Landscape

While the industry is considered to be mature, growth in healthy and premium markets has provided an opportunity for new and existing businesses.

Enterprise numbers have increased over the past five years, due to the entry of healthier fast food players.

Industry employment in fast food has trended upwards over the past five years, largely driven by growth in demand for casual positions and more flexible working arrangements.

Fast Food Profit

Fast food operators have focused their efforts on labour costs, as wages account for the second-largest share of revenue.

The wider implementation of casual contracts has increased operator flexibility to reduce staff levels during non-peak periods.

Additionally, a focus on hiring young employees has allowed players to minimise wage bills further, due to the lower award wages for younger age groups.

Increasing premiumisation within the industry has also provided some support for margins, with higher quality products attracting higher prices.

Fast Food Health and Quality

The Fast Food Services industry has been transformed by growing consumer awareness of the importance of healthy eating over the past five years.

Australians have become increasingly health-conscious due to public campaigns discouraging unhealthy lifestyles.

This trend has affected the industry in two ways: driving consumers away from unhealthy options and drawing them towards operators that provide healthy alternatives.

This has led to an increase in the number of fast-food options available to consumers such as healthier eating options, including salad and juice bars and sushi retailers have increasingly infiltrated the Fast Food Services industry.

Rising discretionary income has boosted the industry, with revenue growth remaining relatively robust over this period. The industry has also benefited from changed business models as operators have taken advantage of consumer demand for quality dining. Industry revenue is forecast to grow by 1.0% in 2015-16, to reach $16.8 billion.

Small Bars Leading the Charge

According to the report small bars are enjoying strong growth as new establishments continue to open in the trendy inner-city areas of Sydney, Melbourne and Perth. The NSW Government relaxed licensing laws in 2007, and the number of small bars in Sydney has grown significantly as the city attempts to mimic Melbourne’s bar culture.

Perth has also been promoting a bar culture, with industry owners eager to capitalise on the high disposable incomes generated by the mining boom. Small bars are also better placed to benefit from changing consumer trends as higher value alcoholic beverages such as craft beers, ciders, wine and cocktails become more popular.

A number of specialist wine or cocktail bars have also opened. Queensland, on the other hand, has a stronger nightclub scene due to the greater number of tourists and resort destinations.

Nightclubs have performed relatively well over the past five years. Nightclubs derive the majority of their revenue from alcohol sales, with these businesses not providing any other significant service.

Premium Drops Increase Profits

A Trend towards premium alcohols and craft beers has allowed operators to push prices up slightly and thus increase profitability. The sale of premium food has also boosted profit margins over the period, as operators have sought to market themselves as an alternative to restaurants. Small bar operators continue to reap the most rewards.

Changing Industry Landscape

Due to changes in food and beverage consumption trends, some venues have renovated their premises to provide dining areas, cocktail bars or family restaurants. These changes have sought to take advantage of Australia’s thriving restaurant culture. Consumer preference has moved away from large suburban beer barns to smaller niche facilities, and social venues such as nightclubs.

In seeking to capture a larger portion of the restaurant trade, some operators have repositioned themselves as gastro pubs. Many of these operators have sought to introduce premium menu options in an effort to win over the increasingly quality-conscious restaurant crowd. As a result, meals have increased as a share of industry revenue over the past five years, with this trend expected to gain pace as bars and pubs seek to expand their revenue base.

4 Recognisable Characteristics of Driven Gen Y’ers

1) Tech Savvy

One of the most important factors that make a millennial a good business owner is their level of comfort with technology. They have familiarised themselves with modern technology from an early age and have adopted more modern business practices. They are willing to apply their tech savvy skills to purchase a business for sale or wanting to ‘make it’ as entrepreneurs with their own venture.

2) Sophisticated Business Sense

With Gen Y taking over, the manner of conducting business is undergoing an overhaul. It is common that upcoming professionals are implementing clever business practices. With high motivation and strong educational backgrounds, they are developing their independent ways of conducting business. Incorporating the latest technology into their businesses from the beginning is allowing the opportunity to find a unique and successful way to market themselves.

3) Core Understanding of Branding

Irrespective of whether it is a business for sale or a business set up from scratch; new business owners want to create a brand like experience for their customers. The keen entrepreneurial spirit is driving them to establish a brand identity. A majority of them focus on establishing strong social presences that speak to their target audiences.

4) Risk Taking Spirit

Generally speaking, members of Generation Y are known to be ‘risk-takers’. They are willing to grab an opportunity and make their dreams a reality, particularly as many wish to be remembered after their time. They are well versed in the world of social networks. Social media provides a wide range of resources, which can help establish and grow an online business; and Gen Y are willing to tap into this. Gen Y has found the best way to harness the energy of social media and promote their business venture. With platforms like Kick Starter, they are more likely to make their dreams a reality and willing to give it their best shot, even if this means making a few mistakes along the way.

How to Become a Successful Business Owner

If you are considering buying an existing business for sale or setting up a business from scratch, there some things you must consider, stick my these rules, and go with your gut and 9 times out of 10 you will see the development of your successful business venture in no time.

1) Determine if owning your business is worth the effort:

Taking charge of your professional life is one of the key motivators if you intend to own a business. From controlling your income, to determining the hours you work; it is a new world filled with possibilities, and far away from having to having everything ticked off by your supervisor in a 9-5 office job. At the other end of the scale there is having the ability to cope with the stress associated with owning a business. While the life of a business owner may seem easy and ideal, it takes immense efforts and determination to achieve it, particularly in the early days of the business. If being self-employed is your goal in life, there is a good possibility of you being immensely satisfied with your work. In such a situation, it is a good idea to start thinking of a business idea and developing it.

2) Develop your business idea:

If you have a potential business idea, it is important to develop a full business strategy before taking any major action. It is always a good idea to research the market, identify the need for your business, and determine the target audience, before you even think about developing your marketing mix. One key aspect that you need to consider is to get an idea about the type of business you would like to own. Once you have determined a specific industry to set up your business in; you can consider the various options you have. While a few people prefer to set up their business from scratch, it is more likely to have some unexpected risks. If you want to lower the risks involved, you can research available businesses for sale. Purchasing an existing business after thorough research can lower the risks tremendously and give you the initial push you need to grow and flourish.

3) Establish goals:

One of the vital ways to ensure your business continues to succeed is by having clearly defined objectives and goals. While having a vision for the business is good; having a small goal to realise the vision is even better. Even though there are more Gen Y business owners today, not every venture is bound to succeed. It is important to keep yourself updated about the different options you can choose from and ways to implement business strategies.

4) Keep finance a core focus:

Finance is the backbone of a business. It is crucial to ensure sufficient means to not only keep the business afloat but also to expand it over time. Securing business grants is a good way to grow your business. With proper research and a strong business plan, a grant can go a long way. Whilst it is not feasible to rely solely on the grant, it can be considered additional support to existing funds. There are a variety of grant options for business owners that can come in handy depending on your business needs.

On a concluding note, if you are a millennial who dreams of owning your own business, do not hesitate to pursue this goal and consider the variety of options on the Boston Brokers page. In today’s work environment, there is tremendous space for entrepreneurs to grow and succeed and be a part of the ever-growing Gen Y workforce.

Whether you plan to sell out in one year, five years, or never, you need an exit strategy. As the term suggests, an exit strategy is a plan for leaving your business, and every business should have one, if not two. The first is useful as a guide to a smooth exit from your business. The second is for emergencies that could come about due to poor health or partnership problems. You may never plan to sell, but you never know!

The first step in creating an exit plan is to develop what is basically an exit policy and procedure manual. It may end up being only on a few sheets of paper, but it should outline your thoughts on how to exit the business when the time comes. There are some important questions to wrestle with in creating a basic plan and procedures.

The plan should start with outlining the circumstances under which a sale or merger might occur, other than the obvious financial difficulties or other economic pressures. The reason for selling or merging might then be the obvious one – retirement – or another non-emergency situation. Competition issues might be a reason – or perhaps there is a merger under consideration to grow the company. No matter what the circumstance, an exit plan or procedure is something that should be developed even if a reason is not immediately on the horizon.

Next, any existing agreements with other partners or shareholders that could influence any exit plans should be reviewed. If there are partners or shareholders, there should be buy-sell agreements in place. If not, these should be prepared. Any subsequent acquisition of the company will most likely be for the entire business. Everyone involved in the decision to sell, legally or otherwise, should be involved in the exit procedures. This group can then determine under what circumstances the company might be offered for sale.

The next step to consider is which, if any, of the partners, shareholders or key managers will play an actual part in any exit strategy and who will handle what. A legal advisor can be called upon to answer any of the legal issues, and the company’s financial officer or outside accounting firm can develop and resolve any financial issues. Obviously, no one can predict the future, but basic legal and accounting “what-ifs” can be anticipated and answered in advance.

A similar issue to consider is who will be responsible for representing the company in negotiations. It is generally best if one key manager or owner represents the company in the sale process and is accountable for the execution of the procedures in place in the exit plan. This might also be a good time to talk to an M&A intermediary firm for advice about the process itself. Your M&A advisor can provide samples of the documents that will most likely be executed as part of the sale process; e.g., confidentiality agreements, term sheets, letters of intent, and typical closing documents. The M&A advisor can also answer questions relating to fees and charges.

One of the most important tasks is determining how to value the company. Certainly, an appraisal done today will not reflect the value of the company in the future. However, a plan of how the company will be valued for sale purposes should be outlined. For example, tax implications can be considered: Who should do the valuation?  Are any synergistic benefits outlined that might impact the value?  How would a potential buyer look at the value of the company?

An integral part of the plan is to address the due diligence issues that will be a critical part of any sale. The time to address the due diligence process and possible contentious issues is before a sale plan is formalized. The best way to address the potential “skeletons in the closet” is to shake them at this point and resolve the problems. What are the key problems or issues that could cause concern to a potential acquirer? Are agreements with large customers and suppliers in writing? Are there contracts with key employees? Are the leases, if any, on equipment and real estate current and long enough to meet an acquirer’s requirements?

The time to address selling the company is now. Creating the basic procedures that will be followed makes good business sense and, although they may not be put into action for a long time, they should be in place and updated periodically.

Myth #1 – I Can Sell It Myself

Many owners believe they’re qualified to sell their business without professional assistance. Many owners are entrepreneurs and the key salesperson for the company. But selling a business is not like selling a product or service.

If you’re looking to sell on your own, confidentiality is lost. If word of a potential sale gets out, there are definite risks of losing clients, employees and favorable credit terms.

Do you really have the time to run your business and compile marketing materials, advertise, screen buyers, give tours and facilitate due diligence?

When you’re looking to sell you want to put even greater emphasis on running your business, boosting your sales and not taking on new challenges.

Myth #2 – I’ll Sell When I’m Ready

Certainly, an owner wants to be sure he or she is mentally and emotionally prepared to sell. But personal readiness is just one factor. Economic factors can have a significant impact on the sale of a business.

Sale prices can be affected by industry consolidation, interest rates, unemployment and many other economic measures. Talk with a professional and aim to sell when your personal goals and market conditions align.

Myth #3 – I Know What it is Worth

Some owners will base the company value on what they need for retirement. Others will tell you they want $100,000/year for “sweat equity.” Still others utilize industry multiples.

A third party valuation is a good idea for anyone seriously considering the sale of their business. An outside valuation will include a thorough analysis of the business and the market it operates in. This will provide a solid understanding of the company’s growth potential, not some vague industry average.

Myth #4 – It’s Like Selling a House

Preparing to sell your house may take a few weeks, then you want to get the word out to everyone that the house is on the market. Once you get a satisfactory offer, you sign on the dotted line, turn over the keys and move on.

Selling a company is much more complex. A successful business sale usually requires a great deal of pre-planning, at least a year and maybe as long as three years to drive sales, develop key staff, document the operations and control expenses.

The average house will sell in less than four months, while the average business sale is nine months to a year.

Even after the business is sold, the seller can be expected to put in at least a few months, and possibly years of transition time, helping to make the new owner a success.

Sound sale strategies will bring you the optimum price the market will bear. Go to market with realistic expectations by getting a professional valuation and using a professional business broker or intermediary.

What subjective factors are they referring to?  SWOT is an acronym for Strengths, Weaknesses, Opportunities and Threats – the primary factors that make up the subjective, or non-financial, analysis. Below you will find a more detailed look at the areas that help us evaluate a company’s SWOT.

Industry Status – A company’s value increases when its associated industry is expanding, and its value decreases in any of the following situations:  its industry is constantly fighting technical obsolescence; its industry involves a commodity subject to ongoing price wars; its industry is severely impacted by foreign competition; or its industry is negatively impacted by governmental policies, controls, or pricing.

Geographic Location – A company is worth more if it is located in states or countries that have a favorable infrastructure, advantageous tax rates, or higher reimbursement rates.  A company with access to an ample educated and competitive work force will also enjoy increased value.

Management – A company with low turnover in management and a solid second-tier management team comprised of different age levels is also worth more.

Facilities – A company operating profitably at 70 percent capacity is worth more than a company currently near capacity. Equipment should be up to date and any leases – either equipment or real estate – renewable at reasonable rates.

Products or Services – A company is worth more if its products or services are proprietary, are diversified with some pricing power, and have, preferably, a recognizable brand name. In addition, new products or services should be introduced on a regular basis.

Customers – A company is worth more if there is not heavy customer concentration, but rather recurring revenue from long-time, loyal customers, as well as from new customers created through a regular and systematic sales process.

Competition – A company not contending head to head with powerful competitors such as Microsoft or Wal-Mart will rate a higher value.

Suppliers – Finally, a company is worth more if it is not dependent on single sourced key items or items available from only a limited number of suppliers.

The Individual Buyer

This is typically an individual with substantial financial resources, and with the type of background or experience necessary for leading a particular operation.

The individual buyer usually seeks a business that is financially healthy, indicating a sound return on the investment of both money and time.

The Strategic Buyer

This buyer is almost always a company with a specific goal in mind — entry into new markets, increasing market share, gaining new technology, or eliminating some element of competition.

The Synergistic Buyer

The synergistic category of buyer, like the strategic type, is usually a company. Synergy means that the joining of the two companies will produce more, or be worth more, than just the sum of their parts.

The Industry Buyer

Sometimes known as “the buyer of last resort,” this type is often a competitor or a highly similar operation. This buyer already knows the industry well, and therefore does not want to pay for the expertise and knowledge of the seller.

The Financial Buyer

Most in evidence of all the buyer types, financial buyers are influenced by a demonstrated return on investment, coupled with their ability to get financing on as large a portion of the purchase price as possible.

Almost all the purchasers of the smaller businesses fall into the individual buyer category. But most buyers, as mentioned above actually fit into more than just one category.

An existing business is a known entity. It has an established and historical track record. It has a customer or client base, established vendors, and suppliers. It has a physical location and has furniture, fixtures, and equipment all in place.  The term “turnkey operation” is overused, but an existing business is just that, plus everything else. New franchises may offer a so-called turnkey business, but it ends there. Start-ups are starting from scratch.

2. Business Relationships. 

In addition to the existing relationships with customers or clients, vendors, and suppliers, most businesses also have experienced employees who are a valuable asset. Buyers may already have established relationships with banks, insurance companies, printers, advertisers, professional advisors, etc., but if not, the existing owner does have these relationships, and they can readily be transferred.

3. Not “A Pig in a Poke”. 

Starting a new business is just that: “a pig in a poke.” No matter how much research, time, and money are invested, there is still a big risk in starting a business from scratch.  The existing business has a financial track record and established policies and procedures. A prospective buyer can see the financial history of the business — when sales are the highest and lowest, what the real expenses of the business are, how much money an owner can make, etc. Also, in almost all cases, a seller is more than willing to stay to teach and work with the new owner — sometimes free of charge.

4. Price and Terms.  

The seller has everything in place. The business is in operation and a price is established. Opening a new business from scratch can be the proverbial “money pit.”  When purchasing an established business, the buyer knows exactly what he or she is getting for his money. In most cases, the seller is also willing to take a reasonable down payment and then finance the balance of the purchase price.

5. The “Unwritten” Guarantee.

By financing the purchase price, the seller is saying that he or she is confident that the business will be able to pay its bills, support the new owner, plus make any required payments to the seller.