This is always the million-dollar question when clients come to us seeking help to exit their businesses.
I typically indicate to clients that they need to expect a business sale process to take at least six to 12 months.
The fastest we have sold a business from start to finish is actually six weeks. However, we regard that as a record that will probably never be broken, because it was a unique situation where, strategically, the ‘stars aligned’ between the buyer and the seller.
selling a business,
Selling your business
The JPAbusiness Business Health Check goes back a long way in our company’s history.
When we started JPAbusiness about 17 years ago, one of the first diagnostic services we offered business advisory clients was to conduct a Business Health Check. The aim was to uncover performance-impacting issues in our clients' businesses that weren’t obvious to them and, sometimes, not even remotely on their radar.
And that’s what our Business Health Check template is all about: helping you as a business owner and manager be honest about how your business is performing.
Business health check,
Don't wait until someone offers to buy your business to seek a business valuation or market appraisal.
Valuations are extremely useful management tools for business owners looking to maximise their current business performance and long-term value.
A valuation can help you identify what you are currently doing that is adding to your business value, and what you are doing that is detracting from value.
My advice is that, if your business is greater than five years old, you should have it valued on a reasonably regular basis.
I started JPAbusiness about 17 years ago, after spending 10 years in the employed workforce.
I was strongly motivated to create something of my own and I had clear goals of what I wanted to achieve. However, it certainly wasn’t plain sailing, especially at the beginning.
The following are five things I felt in the first six to 12 months of starting JPAbusiness. I’m sharing them to illustrate that even if you are ‘the right fit’ for business ownership, you shouldn’t expect it to be easy.
Skills and knowledge,
Starting a business,
Buying a business,
Many people feel they should ‘aspire to something more’ than being an employee i.e. owning their own business. As I've often said, business ownership is only the right environment for some people, and for many of those it is only the right environment at the right time.
In our eBook, Pros and cons of owning your own business, I told my own story of what it was like to start my business 17 years ago. Despite being highly motivated to create something of my own, and very confident that I 'knew my stuff', it was still very challenging, particularly in the first year.
Do you have the right personal qualities?
There are many factors that contribute to a person’s success in business, but the following four personality types – or personal attributes – often seem to manifest themselves in successful business owners:
Buying a business,
running a business,
More than a third of respondents to our recent survey indicated they plan to invest in new plant and equipment in 2018–19, with most of these investments driven by the need to adapt to new technology (61%) and meet replacement schedules (45%). Just over 16% indicated the planned investment was due to new contracts.
If you’re in this situation, you may need to seek finance from a bank or other lending institution.
As highlighted in our eBook, Managing your banking relationship, there are many things you can do to influence your bank's 'appetite' for financing your business.
Private equity is not for everyone but, in situations where it aligns with your business goals, it can be very effective.
So what do you need to know if you're thinking about seeking private equity investment?
The following infographic provides some private equity basics, for anyone starting out on the PE journey.
growing a business,
In our eBook Partners in Your Business, guest contributor Gareth Banks from Champ Ventures explained how private equity works and what sort of opportunities private equity investors look for.
In this blog Gareth answers the following questions:
- What is private equity and how does it work?
- What type of business opportunities does private equity look for?
- As a business owner, how can I benefit from private equity?
- As a private equity investor, what affects your appetite to invest?
- As a business owner, how do I become private equity ready?
- Where do I go for more information?
growing your business
When buying a business, the due diligence process involves checking and verifying information relating to the basic operations and performance of the business you're interested in.
Due diligence is about identifying risks, issues and any material differences between what has been represented in information provided previously on the business, and what you and your advisor identify in the due diligence process.
If you know the risks before you jump (buy the business), then you can plan your landing (mitigate and manage the impact) during the business transfer.
Buying a business,
'Low debt' was one of the top 3 positive impacts on business performance identified by respondents to our recent survey. In fact, over 40% of respondents cited maintaining a low debt as a key element of their positive business performance.
One of the focus areas for business owners to drive their business forward is maintaining an awareness of their capital base and liquidity for working capital and investment purposes. Critical to this is maintaining a strong cash flow.