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Value drivers for business sales in these challenging times In the present economy most buyers are not truly entrepreneurial but are "buying a job". Business owners looking to sell can maximise the amount they receive if they focus on the motivations of buyers. The main reason for buying for many is employment? for themselves or for their family. The easier the business is to run the more attractive it will be. If there are systems in place and clear operations manuals the more comfortable the buyers. Security is another important value driver. Most business buyers are first-time business owners. The safer the business, the more the appeal. The offer of a reasonable training period and on-going consultancy will give the buyer confidence in managing the new venture. Profits are important too. The buyer will want a return on their labour, on their investment, and on their risk. Financial accounts that demonstrate the earning capacity of the business will help with the price received. Many buyers will seek advice from their accountant or require a due diligence provision in the agreement to purchase. Up-to-date readily available financial records will speed up the whole process. Challenge! Most buyers will be interested in growing the business and will look to identify areas with potential. Businesses that satisfy these 4 criteria should sell readily despite the current market. 10 Reasons to be Positive about Business Ownership in NZ 1. We live in a democracy, the rules are fair, the political picture is stable. 2. We live in a capitalist system ? with opportunities to create wealth and the encouragement do so. 3. Our financial system is in good shape ? the banks have plenty of money (but a bit tougher about lending it!) 4. We live in a rich resource region with lush pasture, fertile land, and bountiful seas. 5. We live in the right time zone ? in sync with two billion people in India and China. 6. We live in the right economic zone with three billion people as customers for our produce. 7. We have a high standard of education and our next generation with skills and knowledge to create wealth for us. 8. We live in an honest society, adhere to the rule of law, and have legislation that protects consumers and customers. 9. We are a trading nation - we produce what many people want and they are happy to trade with us. 10. We live in a pretty good climate - not too hot and mostly the right amount of rain. The media bombards us with a lot of negative comment - but NZ is a pretty good place to live. Ask the returning ex-pats or the substantial inflow of immigrants. - thanks to Graham O'Hehir, M.D. of GMO Business Brokers Ltd |
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