Don't rush it – 3 questions to consider before buying a business

Posted by James Price | JPAbusiness on 04-Dec-2019 02:00:00

Whether we’re assisting a client to buy a business, providing advice or due diligence, or fielding enquiries on businesses we’re marketing for sale, one of the first things I tell people is that the price of the business should not be their primary concern.

Now that sounds a bit strange, I know, because price is obviously important –  it would be silly to enquire about a business worth $5 million, for example, when you have $500,000 maximum to invest.

But, and I’m very serious about this, I believe you should set the price of the business aside in your initial discussions and investigations, and consider the following questions first:

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Topics: Buying a business, Advice, Business Planning, infographic, Starting a business, Business advisor, Parramatta, Orange NSW

Why you need a valuation before starting the business sale process

Posted by James Price | JPAbusiness on 04-Dec-2019 02:00:00

When selling a business, it’s important to think carefullybefore taking it to market – about your reasons and objectives for selling.

Once you’ve established your objective, write it down and/or discuss it explicitly with your business partner, spouse and/or advisor.

You then need to obtain a professional valuation to determine whether a sale could meet that objective.

For example, sometimes we see business owners wanting a certain amount for their business and that amount is not necessarily determined by what the market would likely pay for the business, but rather it’s determined by the amount of outstanding loans the business owner has with the bank.

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Topics: Selling your business, business advice, selling a business, Business advisor, JPAbusiness, Parramatta, Orange NSW

4 questions to ask when buying a franchise [infographic]

Posted by James Price | JPAbusiness on 27-Nov-2019 02:00:00

Buying a franchise may, on the surface, seem exactly the same as buying a business.

Principally they are the same, except with a franchise the brand and business operational model has been systematised.

While the operational and other support mechanisms that come with a franchise are appealing when compared to an independent business, it’s important to consider the additional requirements and costs you may have to meet.

The infographic below contains four key questions for people considering buying a franchise:

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Topics: Buying a business, Due diligence, infographic, Franchises, Starting a business, business advice, buying a franchise, Parramatta, Orange NSW

Our 14 top tips to control cash flow [cheat sheet]

Posted by James Price | JPAbusiness on 27-Nov-2019 02:00:00

As business valuers and brokers, and in advising clients on business performance and financing, there is a critical thing we look for: liquidity.

Liquidity is effectively how much cash a business generates and how stable and frequent that generation is. That ability to generate cash is a critical component of business value.

As we often say, owners need to think about the value they get today in running their business, versus the value they get in the future when they sell.

The more cash surplus in the business, the more value they’re deriving into their pocket today. But cash surplus – as working capital – also gives a business more options to grow, invest and change, and build value over time.

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Topics: Advice, Cash flow, Working capital, Running your business, cheat sheet, Parramatta, Orange NSW

Employing older workers – debunking myths and sharing strategies

Posted by James Price | JPAbusiness on 20-Nov-2019 02:00:00

Young people are most likely to be out of work in Australia, but older workers – over 55 – spend the most time between jobs: up to two to three years.

Older people are not the only cohort experiencing age discrimination in Australian workplaces, but I do believe as business leaders we’re missing a valuable opportunity to take advantage of this increasing pool of older, experienced workers.

Personally, I know of several colleagues from university who are in their mid-50s and have excellent experience and minds, but are finding it hard to secure meaningful roles.

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Topics: business advice, staff recruitment, staff performance, Parramatta, Orange NSW, mature-aged staff, employing older workers

4 ways to minimise risk when outsourcing [infographic]

Posted by James Price | JPAbusiness on 20-Nov-2019 02:00:00

Many businesses – including my own – have a ‘virtual team’ of service providers who work in concert with our regular team of in-office staff members.

We have created the following infographic based on our experience and that of our clients who also have valuable outsourcing partnerships.

Use these tips to help you enjoy the benefits of outsourcing, while avoiding some of the hazards.  

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Topics: Free download, Advice, Staff, Running your business, infographic, outsourcing, business advice, risk management, Parramatta, Orange NSW

Video: How to create an Annual Business Plan

Posted by James Price | JPAbusiness on 13-Nov-2019 02:00:00

The annual business planning process should address three critical questions about your business:

  1. Where is the business now?
  2. Where do we want the business to be in the future?
  3. How are we going to marshal the resources we have, and which we can influence, to get there?

In this video I list four aspects of your business which you need to consider during the annual business planning process – Operational, Financial, Risks, People management – and drill down a little into some issues you should cover under each of those four elements.

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Topics: Business Planning, Video, business advice, Business advisor, James Price, strategic planning, annual business plan, Parramatta, Orange NSW

Do I have to pay GST when I buy or sell a business?

Posted by James Price | JPAbusiness on 13-Nov-2019 02:00:00

When working with clients who are either buying or selling businesses, we’re often asked: ‘Will I have to pay GST?’

The short answer, according to the Australian Tax Office (ATO), is:

No GST is payable on the sale of a going concern if certain conditions are met. (A ‘going concern’ is a business that is operating and making a profit.) However, as the seller, you may be able to claim input tax credits for GST you paid on expenses relating to the sale.

Of course, it’s never as simple as one paragraph when it comes to tax, so we’ve asked our business analyst Shirley Jin, who is also a CPA, to clarify those ‘certain conditions’ mentioned, and when you can and can’t claim input tax credits for GST paid on sale expenses.

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Topics: business advice, JPAbusiness, Parramatta, Orange NSW, taxation, GST

How to think like a buyer when selling your business

Posted by James Price | JPAbusiness on 06-Nov-2019 02:00:00

When business owners come to see us, wanting to sell their business, we often get involved in providing ‘vendor due diligence’.

This basically involves us 'pretending' we're a buyer and has two main components:

1. Understanding what the business is really worth i.e. conducting an independent valuation or market appraisal

2. Understanding how the business appears to a potential purchaser.

That second component is the core part of vendor due diligence and involves looking at the business from a purchaser’s point of view:

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Topics: Selling your business, infographic, selling a business, Business valuation, vendor due diligence, business valuer

How to show your bank you're a sure thing [infographic]

Posted by James Price | JPAbusiness on 06-Nov-2019 02:00:00

When considering whether to ‘take a risk’ on your business and fund it, a bank or financier will usually focus on three S’s:

  • Servicing
  • Security
  • Surety.

The infographic below sets out 7 factors which contribute to your ‘surety’ in the eyes of a bank or other financier:

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Topics: Banks and lending, business advice, James Price, seeking finance, Parramatta, Orange NSW, business finance

Disclaimer: The information contained in this blog is general in nature and should not be taken as personal, professional advice. Readers should make their own inquiries and obtain independent, professional advice before making any decisions, taking any action or relying on any information in this blog. 





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