ABC BUSINESS

WELCOME

Steve Smith AREINZ
Managing Director

All indications are that we are in for a great year in 2010 after a pretty average 2009. There is a lot of optimism out there and most commentators are channeling positive feedback. For January, the sales in our Auckland office were up 50% on January last year and new listings are up by more than 30% in the same period. This renewed vigour and extra activity may suggest that now is the time you should be looking at grooming your business for exit.

If you have ever sold a house or car, the principle of ‘grooming’ should be familiar to you. You know that a good polish, a new paint job, or replacing rusty guttering can make a big difference to the sale price.

When it comes to selling a business, the process is more involved, but the same principle applies – with forethought and planning you can attract more potential purchasers and maximise the value of your business.

The first step is to identify business risks and manage them in order to cast a wider net over potential buyers and increase the value of your business. As a general rule a company’s value is determined by a simple equation; Earnings x Multiple

The multiple is a function of perceived growth versus perceived risk. Grooming helps to reduce perceived risk and therefore increase the multiplier.

The first step towards increasing that multiple is to set key grooming objectives. Here is a checklist of some objectives you should consider:

Make the business less dependent on your contribution.
Ensure clients and suppliers are not inextricably tied to you.
Make sure management, operational and information systems are appropriate.
Have key staff and a stable workforce in place.
Preserve Intellectual Property and ensure it is transferable.
Stabilise your market position.
Tidy up any legal and contractual arrangements.
Provide evidence that past performance is credible.
Show that the platform is right for growth and a profitable future.

When the key objectives have been determined it is possible to compare the shape of your business now with the ideal shape you would like it to be in for sale. You can then take the necessary steps to mould it into that shape.

The most important thing to remember when grooming a business for sale is that it takes time, but with the right advice and assistance it’s possible to maximise the sale value of your business and exit in a way that suits you.

(extract from PwC)

Regards,

Steve Smith AREINZ
MANAGING DIRECTOR

SOLVING A BIG PROBLEM - THAT MAKES YOU MONEY!

The best way to create a successful business is to find a need and solve it! That’s what the owner of ‘International Personnel Solutions’ (IPS) did and now he is looking to move onto new challenges. He is now offering for sale his international employment business which specialises in dairy industry placements.

The dairy industry in New Zealand currently employs about 1300 migrant workers from countries such as the Philippines, Chile and South Africa. IPS assists with the location and placement of workers throughout New Zealand to very appreciative farmers.

Farmers have increased their herd sizes, bought or Ieased more land, increased their milk company shares, and made ongoing financial commitments. They need to know that a stable and reliable workforce is available to meet the demands of the industry and IPS solves that problem.

IPS offers a variety of business synergies with existing employment or immigration businesses, new entrants to this business sector, existing dairying operations and professional services companies. The business is positioned to take advantage of further opportunities as it continues through its growth cycle. By increasing its market share, developing and assisting other industries that are experiencing the same difficulty in finding reliable employees, IPS presents favourable economic benefits.

Investment Opportunity:
The business systems provide strong profitability that can include the provision for any management associated with the generation of those earnings.

Ownership Opportunity: The business structure enables an owner operator to benefit from the discretionary income generated by the business.

Distribution Opportunity: By combining the existing business activity you may well be able to increase your client base and/or their spend with you.

Technology Opportunity: The primary source of contact is through the computer and as such offers opportunity for lifestyle and business to complement each other.

Growth through Acquisition: Through this acquisition you will be able to quickly benefit from increased market share and reduced competition.

The business has progressed through the start-up phase with a profitable record of operation and has an established and growing customer base; a known name and location; and a proven marketing and sales strategy. These valuable resources can be utilised by either an existing business activity or a stand-alone purchaser/investor looking to purchase a growing business.

Offered at $126,400 plus stock at valuation

Contact Ross Gibson
03 379 0379, 021 125 1936

Ref: 30249

Click here to learn more

SOME IDEAS TO GROW YOUR BUSINESS

Richie Lowe AREINZ

Use A Professional Voice-Mail Message
Don’t be clever and cute. Identify your company, yourself, indicate your availability and when the caller can expect to hear from you.
Get On The Internet
Today you must have proper communication tools and email addresses are essential. Check your emails at least twice a day.
Consider A Website
A website can help establish your presence, providing customers and suppliers with information about your company and what you have to offer.
Hand Business Cards Out At Every Opportunity
Passing out business cards at every opportunity – even to people you know – is a good reminder of what you do.
Stimulate Word Of Mouth
Encourage existing customers to refer new customers to you. The best new customer is one that has been referred to you.
Write And Use A Marketing Plan
Develop a detailed marketing strategy that covers at least the next 12 months. Map it out so you know what you have to do and when. Continue marketing even when business is good.
Do Market Research
It is important you don’t guess the potential demand for your products and services. You need real numbers based on reliable research.
Watch Changes In Your Market
Very few markets remain static. If you don’t recognize the changes in your market, you can’t respond to them. External circumstances may change your customer base so you have to constantly re-evaluate your market and how you can reach it.
Network
Join your industry’s trade association and your local chamber of commerce to enhance your image, meet potential customers and receive industry information.

Richie Lowe is General Manager of Affiliated Business Consultants Ltd (ABC) and Immediate Past Chairman of the Business Brokers Division of the Real Estate Institute of New Zealand.