Don't pay the price of poor inventory control when selling a business

Posted by James Price | JPAbusiness on 15-Sep-2021 02:00:00

A few years back the JPAbusiness team facilitated the sale of a business involved in import and distribution.

It was a well-known, independent brand that had been established for well over 50 years and had solid bottom-line performance.

Unfortunately, when it came time to exit the business, it soon became apparent there was too much inventory (stock on hand).

We negotiated a price for the goodwill, plant and equipment etc, based on a multiple of Business Maintainable Earnings (BME), which is essentially the cash flow of the business.

Then it was time to address the stock value.

Continue reading...

Topics: Business Value, Selling your business, Advice, Cash flow, Case study, Inventory, business advice, selling a business, Business advisor, James Price, JPAbusiness, Parramatta, cash flow management, Central West NSW, business sale transaction advisor

How to achieve a successful business sale or purchase

Posted by James Price | JPAbusiness on 01-Sep-2021 02:00:00

Based on our years of business transaction experience – and successfully making a match between many buyers and sellers – answering ‘yes’ to the following questions is critical to setting you up for a successful business transaction:

        1. Price – Is the price market-related and does it reflect the value a willing buyer, under the circumstances of the sale transaction, will perceive as fair?

        2. Facts – Are the facts on the business or opportunity clear, unambiguous and relevant to the risks, issues and opportunities the risk-taking party will likely perceive in making the purchase? Have these facts been collated and presented in a professional Information Memorandum/Business Profile?

Continue reading...

Topics: Buying a business, Business transfer, business advice, selling a business, Business advisor, business broker, James Price, JPAbusiness, Parramatta, Central West NSW, business sale, transaction advice, business sale transaction advisor, selling my business

How to do 'vendor due diligence' when selling a business [checklist]

Posted by James Price | JPAbusiness on 28-Jul-2021 02:00:00

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

When conducting vendor due diligence for clients, our role is basically to ‘pretend’ we are the buyer.

We look at a range of business health factors including:

  • financial performance
  • business performance
  • staff and organisational aspects
  • contracts, systems and suppliers
  • how the business creates and drives value in terms of its point of difference in the market
  • forward order book i.e. the pipeline, to understand the true nature of the business as a going concern
  • how exposed the business might be to individuals or particular customers or suppliers.
Continue reading...

Topics: Selling your business, Template, Checklist, business advice, selling a business, Business advisor, Business selling, business broker, vendor due diligence, JPAbusiness, Parramatta, Central West NSW, business sale, business sale transaction advisor

How to avoid losing customers when buying a business

Posted by James Price | JPAbusiness on 14-Jul-2021 02:00:00

There are a number of risks when buying a business and one of them relates to key customers taking flight in the early stage of the transfer.

In doing your due diligence it’s wise to look at customer concentration risk. Where you have a significant concentration of one or two customers, in particular, you should try and protect against that risk.

Here’s an example of how purchasers can use a ‘hard’ provision to protect against this risk in the final contract:

Continue reading...

Topics: Customers and Clients, Buying a business, Customers, business advice, selling a business, risk management, James Price, JPAbusiness, Parramatta, Central West NSW, business sale, business sale transaction advisor

Do I need a valuation before selling a business? [case study]

Posted by James Price | JPAbusiness on 30-Jun-2021 02:00:00

The simple answer is ‘no’, you don’t need a valuation to sell a business.

However, in terms of engaging JPAbusiness to sell your business, the answer is a resounding ‘yes’, you do need to get a valuation before you embark on a sale process.

The reason for that is part of our point of difference among business brokers. It’s based on a lesson learned early in the life of JPAbusiness, and backed by years of subsequent experience. 

Continue reading...

Topics: Case study, business advice, selling a business, Business valuation, Business advisor, James Price, JPAbusiness, Parramatta, client case studies, Central West NSW, transaction advice, business sale transaction advisor, selling my business

Should I buy a business to get myself a job?

Posted by James Price | JPAbusiness on 09-Jun-2021 02:00:00

The short answer to this question is yes... and no.

Buying a business that provides you with a good job is definitely a worthwhile strategy, as long as it doesn’t just provide you with a job.

If you own a business, what are the main risks you will be taking?

  • Operational risk – As a business owner you count on your systems and processes to work in a predictable manner and accept the risk of those systems and processes failing. For example, your safety system could fail and cause injury to an employee, or your manufacturing system could break down, causing you to default on a major customer contract.
Continue reading...

Topics: Buying a business, business advice, Business advisor, business ownership, business broker, James Price, JPAbusiness, Parramatta, financials, redundancy, buy a business, Central West NSW, business sale transaction advisor, business transaction advisor

What is 'strategic' value when buying or selling a business?

Posted by James Price | JPAbusiness on 12-May-2021 02:00:00

Strategic value is the value a purchaser is willing to pay for a business, over and above what an impartial business valuer might determine is ‘fair market value’.

As we have discussed in our eBooks, one common method of determining a business’ fair market value is to use a multiple of earnings.

Multiple of Earnings is the term for how many years or months a purchaser is prepared to wait before they recoup the value they paid the outgoing business owner, based on an assessment of business maintainable earnings (or sustainable earnings).

Continue reading...

Topics: Business Value, Buying a business, Selling your business, Template, strategic value, Checklist, business advice, Business advisor, business valuer, JPAbusiness, Central West NSW, business sale transaction advisor, business value drivers

5 tools to help business sellers 'seal the deal' [cheat sheet]

Posted by James Price | JPAbusiness on 28-Apr-2021 02:00:00

Getting a business sale transaction 'over the line' is not about tips and tricks.

Instead it's about efficiently managing the information flow through the detailed due diligence process to ensure:

  • all parties are well informed,
  • the negotiating process progresses smoothly, and
  • everyone can feel comfortable with the end result.

A good advisor or broker will successfully manage that interface for you.

The cheat sheet below introduces some of the tools the JPAbusiness team uses to manage information flows during the detailed due diligence process and, ultimately, seal the deal.

Continue reading...

Topics: Selling your business, Due diligence, cheat sheet, business advice, selling a business, Business advisor, business broker, James Price, Parramatta, Central West NSW, business sale, business sale transaction advisor, business seller

Pirtek franchise opportunity

Posted by James Price | JPAbusiness on 24-Mar-2021 02:15:00

JPAbusiness is excited to offer business buyers the opportunity to become part of a world-renowned and respected brand.

Pirtek was founded in Sydney in 1980 and is now the world’s leading supplier of premium fluid transfer solutions products and services, including hydraulic hose and fittings.

We have been engaged by the Director of Pirtek Gunnedah to identify potential buyers for this successful franchise.

Continue reading...

Topics: Business for sale, Buying a business, James Price, investment opportunity, JPAbusiness, mining services, business sale, business sale transaction advisor, franchise opportunity, business acquisition, Pirtek, Pirtek franchise

How to use the Buying a Franchise Planning Sheet to assess opportunities

Posted by James Price | JPAbusiness on 24-Mar-2021 02:00:00

Buying a franchise may, on the surface, seem like any other business purchase.

However, a franchise is a special type of business in which the brand and business operational model has been systematised.

A franchise may have additional, more complex requirements for a buyer to consider and meet, but they also tend to come with more ongoing support than regular businesses.

We have created the JPAbusiness Buying a Franchise Planning Sheet to help business buyers assess potential franchise opportunities.

Continue reading...

Topics: Buying a business, Free download, Template, Franchises, Business advisor, business broker, buying a franchise, James Price, JPAbusiness, Parramatta, Central West NSW, business sale, business sale transaction advisor, franchising

 
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. 
 
 

 

JPAbusiness

Topic

more

Recent Posts