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What are we selling? While we are well on track for yet another record year this may reflect the strength of our experienced sales team and our innovative marketing strategies, rather than the state of the economy.The current economy is healthy and business confidence high. But this may not be sustainable if there is a correction in the housing market and recent export growth is not maintained. However, there is always someone who wants to sell and someone who wants to buy. Our extensive internet and direct mail marketing programs continue to produce a strong flow of genuine buyers. Illustrating this, Paul Devcich, one of our top salespeople, recently e-mailed brief details of a new opportunity to 311 qualified prospects on his database. The first response was a phone call within 2 minutes of e-mail dispatch! Six replies were in within one hour, and 16 within 48 hours. And one keen buyer arrived in the office within 30 minutes of receipt! What are we selling? As New Zealand’s most experienced specialist business brokers, with a team of 25, we are well placed to note the changes in the market and the sales mix. Food / Hospitality - 45% of our sales are still in this sector. Cafes are the most popular: easily run, cash-and-carry businesses. Ranging in price from entry-level to $1 million plus they can be very profitable. Fast food (lunchbars / takeaways / bakeries) – another growth sector with more-and-more of the discretionary dollar being spent on meals prepared outside the home. Restaurants, steady sales with an ever-increasing variety of concepts and ethnicity. Bars/gaming – legislative changes slowed the frenzy for these cash flow darlings but still selling well in good locations. This “food” area fuelled by immigrant buyers. Service-type businesses. This is a big growth area for us with the proliferation of services, technology, and trades businesses of many types. These can be highly profitable despite low tangible asset content and the possibility of significant personal goodwill. Manufacture/Wholesale/Distribution Always strong demand from “corporate refugees” and returning ex-pats. With more manufacturing going off-shore and fewer “smokestack” industries manufacturers attract keen interest and can sell at high prices. Wholesaler/distributors are also ready sellers and attractive investments returning on average around 27½% after deducting a management salary. Retail is improving. Supermarkets, “big boxes” and major malls have impacted on these businesses. However, we are experiencing a resurgence of sales in this area with specialist and boutique retailers. Franchises offer increased comfort and security to risk averse buyers. From Paper Plus to Mitre 10, Subways to Four Square, Palmers Garden Centres to BP Service Stations we sell many going-concern franchise businesses. Other sectors: Other strong areas during 2006 were gyms, hair and beauty, automotive/transport, dairy/superettes, and real estate agencies. Over the last 45 years there has been a huge change in the businesses we sell and the buyers we sell to. What remains unchanged is that business ownership is the best investment. |
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