Search

  - All Sections -Content Search Advanced Search

1. Is now the time to buy a business?

Everyone accepts that there are economic cycles, but many act as though the current trend will continue indefinitely.  The investment adage of "buy low and sell high" appears to have few followers who actually act on this. Far more popular seems to be doing the same as everyone else - which in recent times means buy on the way up and sell on the way down.  

2. Business sale prices fall as entrepreneurs accept low prices

The number of businesses for sale might have edged down from lofty heights, but sale prices remain depressed, with online marketplace BizExchange saying most businesses are changing hands for less than two times operating profit. “The economy is not nearly as good as the people in Canberra think it is,” says BizExchange chairman David Bird. And he reckons the next six months will be "pretty ordinary" for sales, as the European debt crisis and uncertainty over Australia's politic...

3. Cash is king in business sales

An increasingly common method for business valuations is the EBIT multiple, in which the value of a business (or sale price) is calculated based on a multiple of its earnings before interest and tax (EBIT).   As shown in the latest BizExchange Index released this week (refer ...

4. Bargains at the lower end: How to buy a business

Starting a business doesn't always mean starting from scratch. Often, getting an establishd smaller concern will better suit your aims. By ANDREW KENT.By Andrew KentIt is commonly known th...

5. Valuing uncertainty

A key issue with business valuations is the level of certainty that can be placed on future earnings. The optimistic seller wants potential growth factored into the numbers, while the pessimistic buyer would like to exclude anything that customers are not contractually committed to. With this in mind one may wonder how any transactions occur at all. Fortunately not all sellers are optimistic and not all buyers are pessimistic; indeed when the sellers are pessimistic and the buyers are opti...

6. Baby boomers are holding on to their businesses. What's goin

The BizExchange Index for the March quarter reveals a dramatic drop in the number of businesses for sale.  Not only is this the first drop in volume in over two years, it is a plunge of 33% in the quarter.    In reality, the reduction in t...

7. The danger of the earn-out clause

Although an earn-out clause may seem like a good idea, but there are real dangers that business sellers must be aware of. ANDREW KENT By Andrew KentWith the private business market fa...

8. Private business values holding up

The latest BizExchange Index, to be released next week, provides some interesting insights into the state of the market for privately owned businesses in Australia.   Many people may be surprised to know that for calendar year 2008, private business values held up better than their listed counterparts. Part of the reason for this is that the private business market is less volatile and began falling earlier. As can be seen in the graph below, the value of businesses...

9. Record numbers of small businesses up for sale as they sit o

Once again private business sales listings have increased in the December quarter, with the BizExchange Index for Private Business Values reporting a 13% rise in sale listings, reaching record levels. The report coincided with findings from accountancy firm Taylor Woodings, which suggested business insolvencies were expected to remain high over the next four years. Perth managing partner of Taylor Woodings, Mike Ryan, told a roundtable yesterday that more small and medium-si...

10. Number of businesses for sale soars to record levels as baby

The number of private businesses for sale has reached a record level of 29,060 for the last quarter, according to the BizExchange Index for Private Business Values. The index recorded an 18% increase in the volume of businesses for sale, which coincided with an increase in values at the smaller end where businesses with earnings before interest and tax ratios between...

11. Looking beyond the dollars

Current and potential business owners looking at selling or buying businesses need to understand that the purchase price is not the only factor to be considered. The handover arrangements are equally important. I have previously discussed the earn-out clause in this blo...

12. Counter cycle – are you brave enough?

In this blog 12 months ago I suggested that, for brave Gen-Ys, trading in the house to purchase a business may be a prudent way of switching from a passive asset to a revenue generating one. House prices were climbing to their peak and privately owned businesses were selling for rec...

13. Are investment dollars returning to the market?

Small business has been overlooked in recent interest rates cuts, as the headline mortgage rate has been given preference ahead of business lending and credit cards.  The banks have previously justified this differential treatment based on different credit risk profiles; however some are starting to come around to the fact that the business owner has more say in their future income than the staff they choo...

14. Debt or equity?

Should you take debt or seek equity to grow your business? Given the current economic downturn, my answer has changed. Here’s why. ANDREW KENT By Andrew KentThe other day I was asked the perennial question b...

15. Small business “giveaway’… Labor's GST sweetener… Do

Small business ‘giveaway’The latest BizExchange Index has revealed an alarming trend of an increasing number of small business owners selling their businesses for less than a year’s earnings. In effect they are virtually giving the business away. It is not the first time that a business has been sold for less than it earns in a year, but this had previously been regarded as an anomaly – possibly the result of a forced sale through personal c...

16. Take another look at investing in a start-up

There are bargains to be had at the bottom end of the market for investors as start-ups struggle to compete with superannuation funds for capital. By Andrew Kent

17. Owners ‘give away’ the business in rush to retirement

Is your business worth less than a year's earnings? You need to ensure you get fair value, ANDREW KENT reports.By Andrew KentThe latest BizExchange Index has revealed an alarming trend of an increasing number of small business owners selling their businesses for less than a year’s earnings. In effect they are virtually giving the business away. While it is not the first time that a business has been sold for less than it earns in a year, this had previou...

18. Number of businesses for sale remains near record levels

The number of private businesses for sales remains near record levels according to the latest BizExchange Index which covers the March quarter. BizExchange’s research found the percentage of businesses with EBIT (Earnings Before Interest and Tax) values between 1 and 2 remained fairly steady from the last quarter. There were 32,597 businesse...

19. A growing concern

Is this drought a long-term trend, and therefore the death-knell for many regional businesses? Or is it better to view the big dry as an opportunity to buy in at the bottom? Market watchWhether you buy a business or decide to sell, it depends on … the weather. By Andrew Kent.A millstone or a marvellous opportunity? Well, that depends on your views on the drought. The drought and climate change have brought uncertainty to the regional business marketplace, par...

20. Is it nearly time to start buying?

Business prices haven’t been this low for a long long time – it’s a real buyer’s market right now. ANDREW KENT By Andrew KentThe most recent BizExchange Index revealed business prices hit a new low as ...

21. I'm clueless. How do I choose a business broker?

Dear Aunty B, I recently wrote to you about selling my food business. Now I am thinking of selling it, but I need your advice on considering a broker for sale. I have spoken to a few brokers but I'm confused. Should I go for a broker who has only a few businesses on his selling list, so that he can give me more attention? Or should I use a well-known ...

22. Business sales tsunami

The rush of business sales is causing huge changes. Prices are falling and accountants and online business sellers are muscling in to steal business from brokers. In all the upheaval, how do you get top dollar? MIKE PRESTON reports. By Mike Preston

23. I'm hopeless. How do I sell my micro business?

Aunty B, I bought my own business a year and a half ago with no prior business experience.  In that time I have barely taken a wage, worked crazy hours and struggled with staff.  As yet another key member of the team resigns I have decided to sell.  The constant stress and b...

24. Everyone wants to buy retail

It’s a good time to be selling a retail business: retail is attracting the strongest demand from buyers, closely followed by accommodation, cafes and restaurants, according to BizExchange research. By ANDREW KENT Summary: It’s a good time to be selling a retail business: retail is attracting the strongest demand from buyers, closely followed by accommodation, cafes and restaurants. Quality businesses will always attract strong demand ...

25. Private equity shops the SME market

Businesses wanting to exit are finding that it is more and more becoming a sellers maket. SMEs can actively position themselves to appeal to private equity. ANDREW KENT reports.By Andrew KentIt is not just comp...

26. The bottom of the market for business sales

Job losses are going to bring buyers back to the market. ANDREW KENT By Andrew KentThis may well be the low water mark for private business prices in Australia. This is because the balance of supply (businesses looki...

27. Franchises make an offer few can refuse

Franchising's smooth selling tactics are making it harder for independent SMEs to attract buyers. By ANDREW KENTBy Andrew KentThere are nearly 1000 franchisors and more than 60,000 existing fr...

28. Are we heading for a 'buy a job' SME boom? Gottliebsen

The best news that the business community could have received to start the new year is the success Australian banks have had raising overseas debt finance on the back of the Australian Government deposit guarantee. The best news that the business community could have received to start the new year is the success Australian banks have had raising overseas debt finance on the back of the Australian Government deposit guarantee. As a result we may see some dramatic changes in parts...

29. Franchises: Aim low for better targets

There are more than 1000 different franchise chains offering businesses to potential owners throughout Australia, reports ANDREW KENT, but the point to remember is to be selective.Lesser-known franchises may be a better investment

30. How to tell if the profits are real

Don't let the dream turn into a nightmare: a profitless business is no business at all.By Andrew KentPotential owners, when reviewing businesses for sale, are looking for some assurance that this year’s income can be re...

31. The recession is not a good time to sell, is it?

Dear Aunt B,  I operate a fast food franchise in Sydney. It's travelling well and has not been hit by the recession, and we are a market leader. But I am 28 years old. My husband is an IT consultant and works for a well known company. We have been married for two years and are planning to have kids, so I will not be able to run t...

32. Why many family businesses are suddenly close to worthless:

Around 800,000 Australian families have dedicated their lives to building up a small enterprise. For many baby boomers, the family business was effectively the equivalent of a superannuation fund and around now they expected to sell the business at a pricAround 800,000 Australian families have dedicated their lives to building up a small enterprise. For many baby boomers, the family business was effectively the equivalent of a superannuation fund and around now they expected to sell the busin...

33. Getting the best price for a small business

The price difference between a poorly presented and a well presented business can be up to 10 times. By ANDREW KENT.By Andrew Kent

34. Prices are down, so focus on future earnings

An estimated 44% of Australia’s businesses will be sold over the next 10 years. If you want to snare the full value of your business, presentation may make all the diference. By ANDREW KENT.By Andrew Kent

35. Let it all hang out!

If you want to sell your business, you need to let the market know it's available. By ANDREW KENTBy Andrew KentThe buying and selling of privately owned businesses in Australia has often been referred to as the hidden market. Historically, businesses have been very reluctant to reveal that they are for sale, keeping a trillion dollar market hidden from view. But this is starting to change.With a growing number of businesses coming on to the market a...

36. Gen-X and Y too poor to buy baby boomer business

The selling tsunami has begun, with the baby boomers putting their businesses on the market. But while the volume of businesses being offered is increasing, Gen-X and Gen-Y are struggling to finance the business purchase, according to the September report from BizExchange, an online marketplace for business sellers, buyers and investors. The volume of businesses being advertised for sale continues to grow, up 12% on the previous quarter. But BizExchange chairman David Bird, says...

37. Rein's new reign... AWA test details... Carbon trading soft

Rein’s new reignEntrepreneur Therese Rein is set to reap at least $80 million from the sale of the Australian arm of her empire. It should also be a quick, straight forward sale with plenty of interested buyers, business brokers told SmartCompany this morning.Rein announced yesterday that she would sell the Australian arm of job placement business Ingeus to resolve conflicts of interest if her husband Kevin Rudd wins the top job in government.Rein holds 90% o...

38. Franchising reform goes part-way … SMEs face the higher co

Franchising’s new rules Weaknesses in the $130 billion franchising sector have been highlighted by the Franchising Review Committee's review of the disclosure requirements of the Franchising Code and the Government’s response, released today.A lack of skilled franchising advisers and a lack of education for prospective franchisees about the risks of franchising are two of the sectors big problems, industry observers say. The Franchising R...

39. "For Sale" sign surge

Nearly three times as many businesses were for sale in the March quarter and it's affecting prices. ANDREW KENT By Andrew KentThere are nearly three times as many businesses listed for sale (in print and online) in t...

40. 'Biz-for-sale' battle breaks out ... Green tinge on election

Battle for “biz sale” marketplace breaks outA war has broken out in the “businesses for sale” marketplace, with Seek launching a new website today (Friday) called SeekCommercial.SeekCommercial takes on BizExchange, launched last year, Trading Post and Fairfax classifieds in chasing the micro-business for sale market.David Waite, general manager of SeekCommercial, says Seek did a soft launch in December, and used live feedback t...

41. Risk a factor in prices

It’s nigh-on impossible for a business to plan when the market wildly throws the level of costs willy-nilly. ANDREW KENT By Andew KentAn increasing absence of certainty and predictability at a global, national or l...

42. Partial sale – the forgotten exit strategy

It's a hard market out there, but I'm here to remind you... there IS wriggle room. Partial sale – the forgotten exit strategySome baby boomer owners are being confronted with a longer retirement than they expected. And they need to...

43. Great time to buy – if you can find the cash

We are currently experiencing a once-in-a-lifetime opportunity to buy good businesses at a good price. But getting funding is not easy. ANDREW KENT By Andrew KentGen-X and Gen-Y are accustomed to finding thems...

44. Recipe for business success

A good idea is no guarantee of a viable business. But an existing set-up's big selling point should always be as the vehicle for the next entrepreneur's grand plan.Recipe for business successIt appears that many peop...

45. Strategies for Gen-X and Gen-Y

Now that the tidal-wave of baby-boomer businesses have started to flood the market, what are the best strategies that Gen-X and Y can adopt? Here are some ideas...     Now that the wave of baby boomer-owned businesses for sale ...

46. Volume up – values down

Businesses are flooding the market, and prices are reflecting this. But it is the smaller end that has wet feet. ANDREW KENT By Andrew KentA flood of businesses coming on to the market is depressing prices, ac...

47. How to make the buyer's job easier

These days, buyers may be thin on the ground, so if you want to sell you may have to work around the buyer's funding options. ANDREW KENT By Andrew KentThe main issue for business owners looking to sell their busines...

48. To the brave will go the profits

In an uncertain market, you can pick up a business bargain if you are prepared to put your house on the line.To the brave will go the profitsThe next generation of business buyers may one day feel the need to apologise to t...

49. Growing through acquisition

While acquisition is an effective tool for growth, a lot of SMEs don't really understand its value.       If you want to expand your company quickly, then acquisition is probably the fastest way to get there. Done wel...

50. More businesses for sale in June quarter

There are more businesses for sale now than all year so far, and most of them are smaller concerns. It could be just seasonal, but you never know...   In the process of compiling the June edition of the BizExchange Index we have come across some interesting...