Risks and Cycles in the Business Sale


Published on

To get the most for your business when you sell, you need to understand how buyers perceive risk and how you can avoid some of the mistakes business owners make by not following the cycles. This simple video looks at four main risks in the business sale and how to reduce the effect . We also look at the cycles all businesses go through and how you can ride those cycles to your advantage.

Published in: Business, Economy & Finance
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Risks and Cycles in the Business Sale

  2. 2. Economic Risk – Risk that is associated with fluctuations in the economic cycle. One can graph the peaks and troughs of business activity, keeping an eye on trends in business and consumer confidence, interest rates and growth patterns. RISKS ACCORDING TO BCI
  3. 3. RISKS ACCORDING TO BCI Industry Risk – Risk relating to a particular industry. This can be due to technological change or anything specific to that industry. It focuses on external not internal factors of the business. Such industries impacted recently include the music industry, publishing, video stores, photographic finishing and the like and even wholesaling.
  4. 4. Personal Risk – Risk associated with the investor looking to invest in a business in which he or she will play an operational role. It can relate to age, health, stage in life & personality of the investor. It also relates to the needs the business will place on the operator and the ability of the operator to meet those needs. RISKS ACCORDING TO BCI
  5. 5. Legislative Risk – Risk associated with investing in a business that is prone to change due to government legislation pertaining to that industry. Such businesses have included newsagencies, training organisations, child care institutions, liquor shops and hotels. RISKS ACCORDING TO BCI
  6. 6. Every one of these risks can be measured and accounted for by paying attention to the cycles that all businesses move through. We may not be able to predict the future but we sure can have a better guess if we are informed and watch the trends.   RISKS AND CYCLES
  7. 7. The Economic Cycle. Chart and watch the movements in Interest Rates, Consumer Confidence, Stock Market Indices, Business Investment plans and you will soon see where we are in the cycle. You don’t buy at the top of the cycle and don’t sell at the bottom. Sell just before the top and buy just after the bottom. Or close to it. RISKS AND CYCLES
  8. 8. The Industry Cycle. This closely follows technology and the changing tastes of people. Look at what has faded and disappeared into history. Why did it happen? What can you learn from that? Is your industry threatened by any change on the horizon? Are people’s habits changing? Does change appear to be long term? RISKS AND CYCLES
  9. 9. Your Personal Cycle. You will or have reached your peak. Your enthusiasm of early years gives way to experience & wisdom. You want to be selling when there is still an ability to hand over the business and transition the buyer on the road to prosperity. You want to be in sell mode before your stamina and health wane RISKS AND CYCLES
  10. 10. The Legislative Cycle. Governments legislate according to perceived inequalities or to gain advantage over their opponents. At times certain things like education or child care take prominence & you can see legislative change coming. The chatter starts before the laws change. Listen to the chatter & act ahead of the game RISKS AND CYCLES
  11. 11. BCI Business Brokers Tony Arena (Managing Director) 3/1 Alexander Street, Crows Nest, NSW, 2065 Phone: +61 2 9439 3399 Mobile: +61 411888148 Email: tarena@bc.com.au www.bc.com.au For Advice On Business Valuation
  12. 12. For A Free Consultation On The Value Of Your Business Visit our website:
  13. 13. For help in maximising your business value take a look at our product here www.bc.com.au/maximise.html Maximise Your Business Value