Buy A Business Without Losing Your Shirt


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Avoid the pitfalls in buying a business.

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Buy A Business Without Losing Your Shirt

  1. 1. <ul><li>Buy A Business </li></ul><ul><li>Don’t Lose Your Shirt </li></ul>BCI Business Brokers
  2. 2. <ul><li>Your Objectives </li></ul><ul><li>Plus and Minus of Small Business </li></ul><ul><li>How to Investigate </li></ul><ul><li>Pitfalls </li></ul><ul><li>Building Wealth </li></ul><ul><li>Franchise v Non-Franchise </li></ul><ul><li>How much to pay </li></ul><ul><li>What’s “Hot” </li></ul>Information Night
  3. 3. <ul><li>What do you want </li></ul><ul><li>to learn tonight? </li></ul>Information Night
  4. 4. <ul><li>“ Half of my marketing budget is wasted - But I’m not sure which half.” Lord Leverhulme </li></ul>Quotation
  5. 5. <ul><li>“ High Percentage of Businesses Fail in the First Years” </li></ul>Quotation
  6. 6. <ul><li>Here </li></ul>How can I be sure to end up… Not Here
  7. 7. Answer These Questions <ul><li>What would be the main reason for you going into business? </li></ul><ul><li>What are you most concerned about when thinking about buying a business? </li></ul>
  8. 8. Reasons People buy a Franchise 33% 27% 19% 16% 1% 3%
  9. 9. Describe Your Ideal Business
  10. 10. Add It Up <ul><li>Good Side </li></ul><ul><li>Freedom/Lifestyle </li></ul><ul><li>Control/Certainty </li></ul><ul><li>“ My Business” </li></ul><ul><li>Wealth </li></ul><ul><li>No Limit </li></ul><ul><li>Bad Side </li></ul><ul><li>Lose Assets </li></ul><ul><li>No Holidays </li></ul><ul><li>Long Hours </li></ul><ul><li>Always “on” </li></ul><ul><li>Stuff </li></ul>
  11. 11. Questions to Ask the Vendor <ul><li>Is the business making money? </li></ul><ul><li>Where is the proof? </li></ul><ul><li>How important is owner to business? </li></ul><ul><li>Will I be trained and supported? </li></ul><ul><li>Does he own other businesses? </li></ul><ul><li>What systems are there? </li></ul>
  12. 12. Questions to Ask Yourself <ul><li>Will I like it? </li></ul><ul><li>Will the goodwill transfer to me? </li></ul><ul><li>Where are we in the economic cycle? </li></ul><ul><li>How is the industry? </li></ul><ul><li>Will I grow the business? </li></ul><ul><li>Will I be able to sell it? </li></ul>
  13. 13. Major Pitfalls <ul><li>Wrong reasons </li></ul><ul><li>Insufficient Capital </li></ul><ul><li>Not enough research </li></ul><ul><li>Murphy’s Law </li></ul><ul><li>Giving up too early (Health, psychology) </li></ul><ul><li>Not enough answers </li></ul>
  14. 14. Your Choice √ X √ X √ Non Franch X √ √ √ X Franch √ X X X √ Startup Freedom Brand Answers Support Cost
  15. 15. Your Ideal Business Successful Foundation Product or Service Growth Answers Right For You Systems Transferable Brand Profitable
  16. 16. The Journeys Survival Growth New Change $$ Challenge Expectations Support Strategy Expertise Courage Investors
  17. 17. Building Wealth The Key to Building Wealth in Small Business
  18. 18. Kiyosaki’s Cashflow Quadrant <ul><li>Job </li></ul>Investment Self Employment Business
  19. 19. Franchise or Non-Franchise <ul><li>Franchise Buyers </li></ul><ul><li>Inexperienced </li></ul><ul><li>Can Follow System </li></ul><ul><li>Risk averse </li></ul><ul><li>Likes teamwork </li></ul><ul><li>Non-Franch Buyers </li></ul><ul><li>Independent </li></ul><ul><li>Pro-risk </li></ul><ul><li>Disciplined </li></ul><ul><li>Free-Spirit </li></ul>
  20. 20. What’s worth more? Appraise business
  21. 21. Risk and Return Risk % Return pa Bonds Commercial Property Bank Shares Small Business 3 5 8 10 20 Residential Property 30
  22. 22. Risk and Return by Business Type Low ROI % Growth Industry Larger businesses Strong Brand Protection by Law Ongoing Income Personal selling Unfashionable Reliant on owner Easy entry by competitors Little Infrastructure High 50-90 30 15-20
  23. 23. Risk and Return by Industry Low Service Retail Cleaning Real Estate Small Manuf. ROI % High 50-90 30 15-20 Property Management Caravan Park Franchise Mortgage Broker Financial Planner
  24. 24. What’s Hot <ul><li>Franchise </li></ul><ul><li>Online Business </li></ul><ul><li>Home Business </li></ul><ul><li>Tied to necessity </li></ul><ul><li>Serving the aging demographic </li></ul><ul><li>Health related </li></ul>
  25. 25. Thank You <ul><li>Success in business requires training and discipline and hard work. But if you're not frightened by these things, the opportunities are just as great today as they ever were. </li></ul><ul><li>David Rockerfeller </li></ul>
  26. 26. BCI Business Brokers <ul><li>If you would like to sit down with Tony Arena to discuss any business opportunity or see what businesses we have for sale contact </li></ul><ul><li>Tony Arena 61 2 9439 3399 </li></ul><ul><li>[email_address] </li></ul><ul><li> </li></ul>