Thinking about buying or selling a business? Read this

I An online marketplace that makes buying & selling a small business easy

If you are an entrepreneur thinking about either buying or selling a business, then this article will offer some great tips that can make the process a lot easier for you.

I It's a big decision that will have ramifications both for you and your family, so you want to make sure whatever you’re doing is for the right reasons. There can be a lot of emotion around the prospect of either exiting or buying a business – and you need to ensure that both “head” and not just “heart” are playing an equal part in any course of action you decide to take.

 There are many decision points in the process – whether to use a broker for example, how to estimate the value of a business, what type of settlement period to negotiate, the size of any deposit that will be required, the extent of training that should accompany a sale, any arrangements that must be made for existing staff – and when and how customers should be advised about new owners.

 One online global platform that connects potential business buyers with sellers is BusinessesForSale.com …… It is not the only online portal for buying and selling a business, however it is a very popular one and has tens of thousands of small and medium sized businesses listed. Whether you are wanting to buy or sell a cafe, a beauty salon, a garage, a franchise or maybe a graphic design or landscaping business for example – then it’s a marketplace option that you should consider.

I I recently posed some questions to Faye Ferris, the Marketing Director of BusinessesForSale

 1.   What are the potential benefits of buying an existing small business versus establishing one yourself?

There are many potential benefits of buying a business that’s already in operation instead of trying to set everything up yourself. Many of the initial decisions that can cripple some business owners have already been decided, such as name, location, logo, products, and services. Of course, as a new owner, you can choose to make changes, but you may not need to do that to actually start operating. Often taking over an existing business means you start your endeavour with staff, customers, suppliers, stock, and systems already in place, so the potential to start making profit is there from day one. By purchasing an operating business, you are eliminating one of your competitors, and with a financial record of the business, attaining loans and projecting income can be a much easier process which makes planning and expanding a lot easier.

  2.   What are some of the different formulas that are used to estimate the “fair value” of a business?

      There are a lot of different ways for the valuation process to go, but they all have some common threads. If you are thinking of getting your business valued, you’ll need to know the history of the business and have thorough records/information on your employees, on the legal and commercial contracts and obligations you have, your business’ finances, as well as the market and industry as a whole. Once you have that information, here are a couple of formulas you could use:

·        Comparable Business-Based Evaluation: With this method, it is difficult to get an exact amount, but it might be good for determining an approximate figure—which is helpful when assessing businesses to buy or when considering if you should sell.

·        Discretionary Income-Based Valuation: This is basically taking and projecting what the owner’s income is and therefore what the future owner’s income could be, calculating return on investment.  

·        Multiplier Valuation by Sales: This method uses the industry multiple your business is in. It then multiples that amount by the business’ gross sales. For example, if gross sales are $80,000, and the multiple is 0.4—you’d have a valuation of $32,000.

      Other formulas and more in-depth explanations can be found in this article, and it should be noted that things like goodwill are hard to attach a financial value to, so I suggest having a professional valuer or a business broker involved in the process. .

  3.   What are some of the risks and traps of buying an ongoing business?

      While it may seem easier to buy an ongoing business rather than starting up from scratch, (and it usually is), you need to make sure you do your research. As well as taking on all the good of the business, it’s possible to also inherit the bad. If the business has a bad reputation with customers or suppliers, it could be difficult to turn that around. Conversely, the previous owners may have had a great relationship with suppliers/landlords, etc., and been getting a better deal than you will be offered as a new owner. There may be a temptation to not make any decisions or changes to a profitable business, but as each person’s leadership and management style is different, there will be inevitable changes/differences. The smart small business owner will be ready to change and adapt processes and systems to better suit the new management.

  4.   For those small business owners who are looking to exit their business and to sell either through a broker or an online platform, what advice would you offer?

Once you’ve decided that selling your business is the right move for you, the next step would be to decide if you should use a professional or not. Doing it yourself will obviously take more time, and you would need to familiarise yourself with your legal obligations and government requirements. The reason most people would choose to do it alone is financial, but you may be surprised and find that the cost of a professional broker isn’t as high as you’d think. The Australian government recommends AIBBbrokers, and I recommend this guide for helping you choose the individual broker that is right for you.

Whatever method you choose for selling your business, there are two pieces of advice that I would like to give: Take care of yourself and take care of your employees. A change like this is almost always at least a little bit unsettling and stressful for both the business owner and the employees. As the business owner, not only do you have to deal with all the legal and financial decisions while trying to get things in order, but also you have to say goodbye to something that has likely taken up a lot of your time and energy. For your employees, their routine and future have become more uncertain and unknown because they won’t know what changes are coming their way. Do what you can to go easy on yourself and others, communicate well, and try to make it a smooth management transfer in addition to a successful paperwork transfer.

  5.   Finally, tell us a bit about your online platform, BusinessesForSale.com – and why a small business owner or a budding entrepreneur should consider using your site …… and how they would go about it?

Faye Ferris, Marketing Director 

When selling a business, I think you want it to have the best chance of getting in front of the highest number of potential buyers. For over 20 years, we have been helping business brokers and private sellers market their listings. From cafes to construction businesses, some of our most exciting business opportunities have included the makers of Big Ben's clock, a Chinese toll road, a crocodile farm in Thailand, and even a tropical island! We have become the world's largest marketplace, advertising 75,206 businesses for sale in over 130 countries with more than 1.5 million buyers visiting our site every month looking to buy a business. We also have guides and resources on the site to help you sell, buy, and run a business in Australia.

We rank on the first page of Google for thousands of search terms, so there's really no better place, in my opinion, to advertise when selling your business. The audience alone makes this an amazing platform. But there are also other great reasons to advertise with us, such as we do not earn a commission, and there are no hidden charges for you. 

You simply choose a package and only pay the one-off fee; plus, you can cancel at any time without penalty. The process of listing is very quick and easy; you can add your business for sale in less than 10minutes. We'll email you each time a buyer is interested and store their details in your online account for easy access. When it comes to buying a business, I think you want to see the largest range of options available to you...so for all the reasons that make BusinessesForSale.com the best place to list your business, they also make it the best place to buy a business. 

Thanks to Faye Ferris, for sharing some of her experience with us and offering some great practical tips on buying and selling a business. . Also, a related article that might be of interest is Dare To Be An Entrepreneur

An Entrepreneur Who Knows Her Why - business serving a higher purpose

Kortney Olson , founder of the GRRRL  brand

Kortney Olson is carving out a niche space in the multi-billion dollar industry of women’s active / leisure wear. She is the founder and dynamic CEO of “GRRRL”, a brand that reflects a spirit of physicality, independence and authenticity.

Traditional sportswear brands tend to target women of “standard” sizes, whereas the GRRRL brand caters for women of all sizes and their marketing specifically features women of large plus sizing.

Like any entrepreneur, Kortney’s motivation and determination in establishing and growing her business is fuelled by a vision – but it is one that is deeply rooted in driving social change and female empowerment. The brand is associating itself with leading female ambassadors from sports that include weightlifting, martial arts and body-building. High profile brand ambassadors (such as Holly Holman, the UFC mixed martial arts champion) get on board because they share the same values of inspiring women to become more self-accepting of their body image.

"We want women to find the awesome and extraordinary within themselves”

The company’s tagline “It’s Time to Change the Game” speaks for what the business stands for. The website explains “…..Our clothes won’t change the world, but the women who wear them will….. We want women to find the awesome and extraordinary within themselves”

A brand that says to women - "Be true to who you are"

Since the establishment of the business in 2015, growth has been phenomenal - with over 30,000 customers spread across more than 20 countries. 

Kortney established the business as a means of generating funding for her “Kamp Konfidence”, a training and personal development program that aims to inspire teenage girls to develop stronger foundations of self-respect and self-love. 

The incidence of suicide and self-harm amongst teenage girls is alarming and Kortney believes this can be reduced through educating young people to develop their skills in resilience, assertiveness and self-esteem, so they are more capable of with-standing peer group pressures that exist around drugs, sexuality, bullying and body-image.

Kortney’s passion is encouraging women to stop looking for acceptance and approval outside of themselves and instead find it within. Her zeal is partly fuelled by her own early struggles with depression, drugs and rape. She readily admits that for several years she seriously lost her way and was barely surviving in a deeply dark place - but eventually regained a sense of direction, faith and clarity of purpose in her life.

Strong is the new pretty at GRRRL

Kortney is using these experiences to connect with young women who may be facing similar struggles and she seeks to inspire them with the confidence to follow their dreams. 

Kortney agreed to share some of the lessons, tips and insights she has gained so far as an entrepreneur who is building a successful business (which recently featured in Forbes magazine). However she explains it is a business whose higher goal is more than just making a profit .....I asked her 5 questions –

1   
      1. Running and growing a business takes a lot of stamina and inner fortitude. You were a professional athlete Kortney, and perhaps thereby possessed the benefit of bringing an ability to focus and persevere to your business. But what about other aspiring entrepreneurs, what advice would you offer them for getting through the difficult times?

That’s a great question Brian.  I believe my dogged attitude actually comes from something other than having an athletic background.  It comes from being a recovered drug addict/alcoholic!  Upon completing treatment, many of us still carry traits of OCD (obsessive compulsive disorder).  I realised a long time ago that I could turn that OCD into something incredibly powerful. 

Recovering alcoholics and addicts are often given labels by society – and a social stigma will often accompany this – however we don’t have to allow these to hold us back.  For me, it was about a flip of perspective – turning a weakness into a strength. 

An integral part of my growth as a business owner has been accompanied by my commitment to personal growth and self-development.  Something I found incredibly helpful back in early 2015, was taking the “natural gift assessment”.  As part of an intensive self-improvement program, I learned that we are all born with various inherent gifts and that I have 3 “primary” gifts ….. The gift of Encouragement (explains why people like and trust me); The gift of Evangelism (explains why if I have love or belief in something or someone, then the world is going to know about it), and the third (which apparently is rare to have as a primary gift) is The gift of Giving. 

The gift of giving means that when I see a problem in the world, it’ll keep me up at night until I see that it’s fixed.  I have come to believe that if we are able to understand what our primary natural born gifts are, then we can harness these powers to our benefit (and to the benefit of others around us) - and better understand the reason why we are programmed the way we are.

Also let me add Brian, I have recently found myself being invited to speak at business conferences, and I have developed a keynote speech which I call “Goals Not Controls”.  In a nutshell, I share my experience that as entrepreneurs many of us often get TOO caught up in all of the details of what we think things are supposed to look like - right down to the very smallest detail.  Instead, as we learn to focus more on the overall end result, and less upon the means of achieving that result, we free ourselves up for the possibility that sometimes the Universe will have a different plan for how we will get there.

     2. What have you learned about surrounding yourself with the right team of people, in order to grow a successful business?

Yes, surrounding yourself with positive, uplifting people is CRUCIAL!  I believe we eventually become the sum of the 5 top people we most hang around with....

Since I’ve been in Singapore, I’ve been searching for mentors to help guide and direct me because I know how important this is.  I am convinced that the growth of my business is directly proportional to my on-going growth as a human being ….. and the people with whom I most regularly associate with will influence my learning and growth …..  

In my business (and my life), I want people around me who possess strengths and qualities that complement my own, people whom I can trust – and people who ultimately help to bring out the best in me.  

I recall reading once that Warren Buffet said that when he was hiring senior people to join his business, there were three qualities he particularly looked for – Intelligence, Drive and Integrity. But above all – he regarded integrity as the quality that he valued most.

     3. The “GRRRL” brand is carving out a real niche in the women’s active/leisure wear industry. You have built a HUGE social media following …. What marketing advice would you offer to small business owners – who typically however are operating with a very limited marketing budget.

We’ve bootstrapped this brand to the moon and back.  It may surprise you that we spend very little on marketing - in fact, less than 5%. 

What people are drawn to, is authenticity……  I believe we’re at a tipping point where people are really starting to cut through the nonsense and wake up to who genuinely resonates with them and helps them see-through all of the “smoke and mirrors”.

For me, business is about showing up on a consistent basis.

With social media, it’s about putting myself out there in ALL states which has really spoken to my audience and enabled me to connect with them.  I don’t sugar coat anything.  I’ve posted pictures of myself crying in complete and utter frustration. …… Even though I once had a mentor tell me that leaders don’t show emotion and cry, I have made a conscious decision to always keep it real.  For me, authenticity is the way forward.

      4. What would you say has been one of the major hurdles you’ve had to overcome in your business journey so far – and what did you learn?

The biggest hurdle has been cash flow.  It’s probably a headache that many other owners of small and medium size businesses can relate to!

At this point in the growth of my business, ever cent is going back into inventory…… But- one thing I have learned is this – the power of prayer and trusting that the Universe has a plan……. I believe that as long as my business goals are such that others will gain benefit – as opposed to goals that are purely about self-benefit, then I believe that the Universe will provide me with the necessary means for achieving my goals. This faith has kept me showing up time and time again. 

When I say the word “prayer”, I’m not necessarily meaning in a religious context.  I know that it can be a loaded word, carrying connotations of some type of “God”. 

But even an atheist can simply look around and keep an open mind that there is SOMETHING else out there beyond this material world that we have access to if we ask for help.  Every entrepreneur should read the classic book Think and Grow Rich” by Napoleon Hill.  It’s here he talks about “the ether”.  It’s this ether that I refer to as “The Universe”. 

I do not wish to sound like a zealot. But at the end of the day, all I know is that for me, there is a God, and I am NOT it. 

If I show up on a daily basis, and ask this higher power (God, or whatever you want to call it) for guidance, and to show me how to serve humanity through my business, and not my selfish, self-centred ego -  then things always seem to have a way of eventually working out. 

It also takes some of the pressure off of me personally, as I believe there is a “higher power” that can help guide and inspire me in the way I run my business (and my life) which can enable me to better serve our planet.

      5. Kortney, so much of what you are doing with “GRRRL” and “Kamp Konfidence” is motivated by your passion for women’s empowerment….. Do you believe that an entrepreneur can succeed if their motivation is solely about making money by providing a “solution to a problem”, or does it need to be more than that?

Providing a solution to a problem is the fundamental premise of how business has been done for the last 100 years.  If you’ve watched the recent film “The Founder” about the McDonalds Brothers and Ray Kroc, I think it reveals a lot about the most basic principles of traditional business.  Value is in the eye of the customer; quality is about maintaining an expected standard consistently; and ensure the customer and accessibility is kept at the forefront of all product development decisions. In addition to these basic business principles, the film also displayed how the pursuit of profit could sometimes be ruthless – presenting Kroc as someone who eventually cared more about money than the relationship he had originally built with the brothers.

However I think we have seen some shifts in the business landscape over the past ten years …… There has been an emergence of brands like GRRRL – and also for example, Tesla and The Body Shop, which exist for a purpose greater than just solving a problem and turning a profit. ….. Whilst we are solving a problem, it’s a much higher level problem than just plugging a gap in the marketplace and meeting a consumer need. At its core, there is a cherished vision of a social benefit that is driving the business – which is one that I believe our customers, associates and staff can all genuinely become engaged with.  

Each of us must find our own way.... For me, building a business that is as much about serving a "Higher Purpose" as it is about being profitable, has provided me with a sense of meaning and personal fulfilment that I had been searching for in my life. 

Thank you for sharing your experiences with us Kortney.  You can find out more  about the GRRRL story at - https://www.grrrl.com/au/  More information about the self-empowerment workshops that Kortney Olson runs for teenage girls can be found at Kamp Konfidence on Facebook - enquiries from potential new corporate sponsors for the workshops are always welcome.

Other articles that might be of interest - The Inner Game of Business and also How To Flourish - lessons from positive psychology

Sales, Mindset and Focus – great tips to help your small business prosper

Sandy Colombo is a business coach

It's always interesting speaking with a business coach and getting their thoughts around what it takes to succeed in business. Sandy Colombo is the owner and founder of Colombo Consulting, based in Melbourne Australia. 

I had the pleasure of chatting with Sandy recently and she shared some great tips and advice relevant to both start-up entrepreneurs as well as experienced business owners (who can sometimes lose their way) .... 

1. Sandy, for many years you’ve been running a consulting business – but you initially came from working in the corporate world. What do you recall were the early major challenges you faced starting up your own business?

Yes I managed a whole travel business which I took from $70k in the red to 15 million dollar sale. During this time I learnt a lot about business and yet it was still a different experience when I started my own business. Cultivating the right mindset can be one of the biggest challenges. in fact  I have coached many people around how to build and maintain a positive mindset - although having a clear sales strategy certainly helps to encourage this. Often sales is done on an inconsistent bases and this is why so many businesses end up failing. The reality is no sales, no business and no income.

2. You’ve provided mentoring to many small business owners over the years in relation to improving their sales performance – what are three of the most common mistakes you see small business owners making in relation to sales? ....... and any additional tips for avoiding these mistakes

I would say the top three learnings in small business (mistakes are just feedback if we choose to learn from them) are

A: Being reactive and inactive, rather than proactive with sales

B: Not asking for the business

C: Keeping an accurate database and following up

Let me explain a bit more about the need to be proactive ……All good sales people know the difference between proactive task and inactive tasks. People good in sales know that the proactive task is going to get them the business. The inactive task is going to take time away from your selling.

Having clear goals and having them written down makes working out what task is proactive and what task is inactive much easier. Be focused on what you require. A useful reminder here is the 80/20 rule, to help you determine where your FOCUS should be. This time management principle essentially tells us that 80 percent of the value you generate in your business comes from 20 percent of your daily tasks and activities.

So therefore you should focus on those critical few tasks that add the greatest value – and ensure you are spending more time on these particular activities. If you have staff in your business, then delegate the other stuff to them, so you can play to your strengths and also use their skills and strengths.

Don't get me wrong however. winning the sale is not enough of itself ...... Obviously there can be many important tasks associated with subsequently consistently delivering a quality product in a reliable and efficient way - and keeping your promises. 

However, some examples of inactive tasks that may be taking you away from your goal of increasing your sales might include -

·      - Checking email more than twice a day

·      -  Not being 100 per cent present when speaking with clients

·       --Handling paper more than once

·       - Procrastination and not being focused on addressing your priorities

·       - Making things harder than necessary and spending too much time on relatively trivial stuff

Examples of more proactive tasks are –

·       - Follow up quotations

·       - Contacting past clients

·       - - Developing a mail out or newsletter to your client base

·       - Networking 

·      -  Optimising your website so that it ranks higher in search engines, thereby more likely to generate enquiries

3. You’re a big advocate of networking as a business growth strategy for helping to generate leads– and yet for many business owners, this doesn’t come easy. What are some tips you can offer?

Networking needs to be a core part of your sales strategy and then you need to look at it from a ROI point of view. Networking groups are vital for many small business owners and not just for referrals – but also for contact, professional development and feeling connected …… Isolation can be one of the biggest challenges and stressors in small business. Join a group like FRESH NETWORKING or join a business hub like WATERMAN - they offer different types of benefits although both offer social interaction (and possible referral marketing or lead generation through word of mouth)

4. Mindset and mental outlook are such important factors that can influence a business owner’s level of success and also fulfilment ..... What can entrepreneurs do to help build and maintain the right mindset within themselves?

Absolutely a positive mindset is important. Many people have heard the old saying “if you think you can, or you think you can’t - you will be right”

My advice to your readers is to be willing to invest in yourself…… I see many business owners treat themselves poorly working ridiculously long hours, never having a break and not giving back to themselves. While there is certainly a “J curve” in business, I see many people never giving themselves a break and working 80 hour weeks. This can stop sales, as your unconscious mind is less likely to give you more clients or more work if you are not looking after yourself. Therefore quite often there are internal blocks within business owners themselves, which are standing in the way of being able to generate an increase in their sales.

When you are working like this, your thinking and your judgement can so easily become flawed, with your outlook becoming negative. The law of attraction kicks in and you get more negative stuff back - as it’s a reflection of what we put out there! …… When this happens, it can become a form of self sabotage – and we can end up creating unnecessary drama for ourselves.

5. On this theme of mindset – passion is one thing, however as you have already said, some business owners can become quite obsessed with their business, becoming completely immersed in it. Have you seen that this can present any other risks or potential dangers?

Yes this can happen - we can become so passionate about our business that everything else takes a back seat. I have never gone to a funeral where the person who died wished they had spent more time at work..

In fact its quite the opposite. When we become obsessed with anything we are out of balance. An activity like “Wheel of life” is a good one to reassess where we are at and what is important to us. Evaluating how much of your time is allocated to the various dimensions of your life - business, versus family, friends, exercise, leisure, personal growth and social or community contributions.

Sometimes we forget about the need for balance when we get caught up in an emotion. Business can be fun and it’s great to be passionate about it. We just need to check-in and see that we are climbing the right ladder …… otherwise you can end up investing a lot of time and effort to discover you’re climbing the wrong ladder.

6. Any final advice you’d like to offer to our readers who are working on starting or growing their home-based small business?

Invest in yourself and your business. Personal development is the key. Every time I did any form of Professional Development I found that my business boomed. ……I learnt to put in systems, check my ego and make business easy.

I always ask my clients - Do you want to be right or rich ? And by Rich, I mean richness. Richness in life to have the relationships we want, the time and freedom to invest in the activities we are passionate about and the money to do all of it. People who keep on insisting that their way is the "right" way can become stuck in their ways - they close themselves to the need for change - and fail to recognise the opportunities for learning and improving. 

Thank you to Sandy -  more information about her business coaching services can be found at - www.ColomboConsulting.com.au 

More information on Mindset and dealing with some of those "inside blocks" that can get in the way of enjoying business success can be found here - http://www.australia-small-business.com/2015/02/for-entrepreneurs-inner-game-of-business.html