“As I look back over the year in 2011, there have been a number of highlights as well as some challenges,” the Savvy Business salesman said. “Among the highlights was completing the largest business sale on the Sunshine Coast for the past three years. It was a large food wholesaler that had been established for 10 years and it sold for in excess of $2 million. “Another highlight is seeing a huge increase in the number of businesses that I am receiving from repeat and referral clients.”

After being in the industry for close to four years, Michael is starting to resell some of the businesses he sold in his earlier days. He is also seeing a lot of business come through referral, and some of these businesses are off the Coast. “An example of this is when I sold the Sunshine Coast territory for TFH (Temporary fence hire) earlier this year. The sale went really smoothly and head office was happy with the work that I did so they have recommended me to their Cairns area and Hervey Bay Territories which I have listed at the moment. “In an industry where word of mouth is such a strong form of advertising, to have my services recommended to others is the greatest way to gauge whether you are doing a good job.” One of the challenges at the moment, Michael sees, is under-supply of good quality businesses coming on to the market.

“There is a perception out there that it’s not a great time to sell a business, but the multiples that we are receiving for top shelf businesses has not changed at all over the past three years. I think that our sales results at Savvy Business Sales reflect this with a good variety of local businesses changing hands throughout the year.”

Michael says he tries to make sure that everything is done to the highest standard possible and that he gives clients the same service he would expect if he was selling a business.

Savvy took out the prestigious Small Business of the Year award at the 2011 Sunshine Coast Excellence in Business Awards on Saturday night.

Principal Rod Russell said that Savvy continues to enjoy success, in spite of challenging times.   “Business broking Australia-wide is finding life very tough with many formerly profitable businesses becoming unsaleable. In contrast, we’re going from strength-to-strength.

“In fact, by the end of this year we’ll have doubled the size of our team to cater for the growth we’re experiencing,” he said.

Mr Russell said he was extremely proud of his team, and praised their contribution in Savvy Business Sales being recognised as the Sunshine Coast’s best small business. “Most businesses are small businesses, employing less than 20 staff. So to be named as the best small business on the Coast is an incredible accolade.”

Small business plays a pivotal role in economic prosperity, with 96 percent of all actively trading entities being small businesses. Collectively they employ almost half of the nation’s workforce.Specialising in business sales above $300,000, Savvy lives up to its motto of “raising the standards in business sales” – proof being that nearly 70 percent of sales originate from referrals or repeat clients.

“Many of our clients have bought or sold businesses through Savvy previously, and return to us because we’re forthright and don’t offer false hopes. Most also appreciate our innovative marketing and the systems we’ve developed specifically to support their sale,” Mr Russell said.

Savvy has achieved more than $140 million in business sales over the past four years.

“I feel that the outlook for businesses on the Sunshine Coast is really looking up, and accordingly Savvy has set an ambitious target for attracting new clients in 2012.

“This is our third Sunshine Coast Excellence in Business Award. We previously won the Business Services category in 2008 and 2009, and so it’s fitting that we’ve taken out one of the major awards,” Mr Russell said.

More than 200 business leaders attended a half-day forum in Maroochydore yesterday to see how they could be part of what will be a $3.5 billion injection in the local economy from the hospital and surrounding development. (Read more) http://www.sunshinecoastdaily.com.au/story/2011/09/16/our-resources-boom

Tourism has been down, the weather been horrible and the building industry has been slower just to name a few of the problems. With all these factors considered, there are probably many thinking that it might not be the best time to open a business.

However it is the ideal time to purchase an existing business and with buyer enquiry being so strong lately, it seems like I am not the only one with the opinion.

One of the benefits of this slower economic climate is that it sorts out the good businesses from the ordinary.

If a business has come through the downturn in a fair state, there is every chance that it is a sound business built on good fundamentals.

The greatest concern a buyer has is purchasing a business only to see the their investment head south after they take over. Naturally with a lot of capital on the line, all buyers are looking at minimizing their risk and buying now could be a great way to do this.  After two years of slower economic conditions, buyers are more likely to be seeing a business after going through its toughest period. This should give them more confidence in the business that they are purchasing as a solid investment. There are probably many people out there who bought a business 2-3 years ago who wish they could have had the benefit of seeing their business go through a slower economic period.

When the Coast economy starts to turn around these businesses will be well placed to capitalize on the future and an improvement in the local economy probably isn’t too far away.

Large infrastructure projects such as the Kawana Hospital and the return to better weather patterns are likely to help things improve over the next few years.

If you are looking at buying a business, it is still important that you take the necessary steps such as due diligence to ensure that it is suitable. However you can take confidence from the act that a business that has come through the ownturn is likely to continue to trade well into the future.

Despite this, most buyers will eventually find their match.  The key point to be patient and do as much
research as you can, stay within your financial limits and, most of all, ensure that you have the ability
to competently operate the business you are interested in.

Show that you are keen – local business brokers get swamped with inquiries from buyers on a daily basis.
Often quality listings will get snapped up quickly once they are marketed online and in the press.  So if you
are serious about it and establish a good relationship with local brokers to ensure that you are top of mind.

Research everything – if you find a suitable business do your homework and learn as much as you possibly
can about it.  Are there new competitors coming to town, research the services and products on offer, how
easy is it to find industry experienced staff, is the rent fair for the location, what is a fair value for the
equipment, will you need to upgrade the fit-out, are there special licences required to own the business?
These basic checks can be done easily and shouldn’t cost you money – well worth the peace of mind.

Risk and return – the most common question that I get asked is “how do you value a business?” There
is no black and white answer to this question.  However, I suggest looking at the level of risk in the
business and what the return on investment is.  Obviously a buyer would expect to pay more money
for a long established business over a business with only 18 months history.

However, many experienced business operators would take a risk on the newer business and take advantage
of a lower asking price.  This is where the risk and return scenario will depend on the buyer’s situation.

Due diligence – an absolute must!  Take the time and spend the money to do a thorough due diligence on the
business while the contract terms allow you to.  Your investment with solicitors and accountants is normally
only a fraction of the purchase price of a business yet it could save you from losing everything.  It is of
utmost importance to ensure that you are dealing with qualified advisors who specialise in business and
commercial transactions.

Tuition – most buyers underestimate the knowledge and the role of the seller.  Most sellers have years of
industry experience and an intimate knowledge of clients, products and staff etc.  You must take
advantage of a suitable tuition period after settlement.  This is not a time to arrange bank accounts and
credit applications.  This period is crucial to a smooth takeover and your ongoing success in the business
and is the very best time to learn everything you can.

by Rod Russell
Principal

Preparing well to sell

INTEGRITY LEADS TO WIN

MICHAEL Yared is always striving to improve his operating standards to be among the best.  Yet the 30-year-old business broker never thought he would achieve what he has so quickly.

Last Thursday night Michael took out the prestigious Business Broker of the Year Award for 2011 at the REIA (Real Estate Institute of Australia).

It’s an historic win as Michael is the first Sunshine Coaster to receive an REIA award.

It is also a fitting tribute to his grandparents Frank and Daphne who have been the biggest inspiration for Michael.

“My grandfather emigrated here from Lebanon when he was two years old, sadly his mother died soon after”, Michael said.  “When he married my grandmother  they started out with nothing.  With a lot of hard work they built up several different businesses. “More than just being successful in business, they are also great people – selfless, generous, with strong morals and integrity.

“Always putting others first they have incredible integrity and morals.  They had a great work life balance and built a very successful business by working hard and doing the simple things.  They are both elderly now – my grandfather turns 97 next week – and even now they still try to serve others as much as possible and put others first.

“I hope that I live my life the way that they have”.

Michael won the Queensland state awards in February which elevated him to the national finals with other state winners.  The awards were held on the Gold Coast last Thursday.  Now in its sixth year, the REIA awards recognise real estate professionals who have contributed at an outstanding level to their business, their industry and their community.

“It is really encouraging to be rewarded for my hard work and it drives me to work even harder” Michael said.

“To win the award is very humbling, there are so many good business brokers across Australia and to be named the best of them is a huge honour.  We’ve worked very hard at to improve our systems so I can offer clients the very best service and results possible.

“I am really looking forward to the year ahead as the business sales market is still strong and we are achieving excellent results across the board”, Michael said.

As well as his family, Michael attributes much of his success to Savvy Business Sales principal Rod Russell – someone who has been in the industry for as long as any broker on the Coast.

“Rod has a lot of experience and he is a great person to have on your side”, he said.

And it gave Rod a great deal of pride to see Michael accept the award.

“It is excellent recognition for the effort that Michael has put nto his career and into the industry over the past three years,” he said.

“His work ethic, tireless commitment and sales results in tough economic times have been outstanding.  The team at Savvy are very proud of Michael and the fact that he bought such a prestigious award to the Sunshine Coast”.

Two-time winner of the REIQ Business Brokers of the Year, Ron Frank of Business Brokers Queensland, has also been supportive of Michael, who completed a bachelor of commerce degree at university and said it had helped him.

CONTACT: Michael Yared – 5444 3300 or 0409 931 600

By Rod Russell
Savvy Business Sales

The amount of preparation that goes into selling a business will often dictate weather the business will sell, how long it may take and what most Sellers will say is most important of all how much money it achieves.

Every business owner should have an exit strategy and a business plan. This information can be crucial to monitoring the performance of the business, achieving the owner’s goals and it may well become vital if and when selling the business.

Generally buyers of a business will engage several professionals advisers when they contemplate a purchase.   Accountants, solicitors and financial institutions will need all relevant documentation and information pertaining to a business, if they are employed to make an educated analysis.

Having that information available upfront is paramount. Sellers must understand that full taxation returns, original lease documents and lots more sensitive information will be required at some stage during the transaction. An agent has a much better chance of a result if they have this information compiled upfront. This does not mean that they will give it to anyone that asks for it. Good agents are educated to know when and who to give this information to.

If you are considering selling and you want to achieve good money for a business take the time to get everything right where possible. Be mindful of how it presents, the stock levels, staffing levels, tenure of the premises, debtor levels, financial margins, and taxation implications, diversity of clientele, marketing strategies, cash flow requirements and many more areas that are seriously dissected by buyers and their advisers.

All of these things and much more will come under the microscope, so it is wise to get them in order prior to going to the market. Spending the time required negotiating a lease extension; updating financials, employing key staff members will all boost your chances of achieving a premium result in a realistic time-frame.

If your business is realistically priced the costs and time associated to prepare it professionally should be rewarded tenfold, with a strong sale price within a realistic time frame.

Due to variety of reasons some businesses attract very few inquiries when they are taken to the market. This is the reason why we highly recommend that all sellers take the time required and spend the money necessary to ensure the very best result possible.