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Joining the Entrepreneur Club

Buying Businesses October 30, 2016

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Do you want to start a business but are unsure whether you’ve got the entrepreneurial flair? The good news is that anyone can join the entrepreneur club. Becoming an entrepreneur is more about the actions you take, not the person you are.

If you’re unhappy with your current circumstances, you must first admit that no one can fix them except you. Many people get caught up in blaming the economy or their boss or some other external factor for their problems. Entrepreneurs understand that change can only occur when you make a conscious decision to make it happen.

With the right attitude, you can achieve your entrepreneurial dreams. Here are a few steps to help you get started.

Find the Right Business for You

Take the time to explore a lot of options. Look at different aspects of yourself, like your interests, passions and personality, and choose something that excites you and fills you with motivation.

There are three common approaches to finding the ‘right’ business:

  • Do what you know – leverage your skills and offer them as your own products or services
  • Do what interests you – find a business or industry that interests you and emulate it from scratch or buy an existing business
  • Solve a problem – Find a gap in the market and fill it. This approach is the most difficult and highest risk. Ensure you do your homework beforehand.

Plan for Success

A failure to plan is the biggest mistake a new business owner can make. Planning and setting goals helps you to gain knowledge, focus, clarity and confidence. Ask yourself what you want to achieve for customers and yourself, who you’re serving and what objectives, strategies and steps you need to take to achieve your goals.

Know Your Market

Ensure you do plenty of market and industry research – find out if people will actually buy your products or services. Finding this information can be a lot easier when you’re buying an existing business. After all, they come with an established location and performance data that you can evaluate before making a purchase.

Get Support

Once you’re an entrepreneur, your personal finances are connected to the success of your business. Making a mistake can have severe and long-lasting consequences. To reduce this risk, you should seek the advice and services of professionals who can help you make good decisions.

If you’re buying an existing business, you should enlist the services of an experienced business broker to help you find a quality business that is right for you.

Buying a Business? Talk to an Experienced Broker

If you’re thinking about buying an existing business in Sydney, get in touch with LJ Hooker Business Broking. We are Australia’s leading business broker with experience selling high-quality small businesses and handling well-known clients like Dominos, Kwik Copy and Michel’s Patisserie.

We’ll help you join the Entrepreneur club with minimal risk and high-quality support. Call 02 9552 1111 or contact us online to get in touch with one of our experienced brokers.

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Buying a Business? Here’s What You Need to Know

Buying Businesses September 22, 2016

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Buying a business requires a little expertise and a great deal of research. Understanding as much as possible about the limitations and liabilities as well as the tangible and intangible assets you’re acquiring can be the difference between success and failure in your first year.

A business is a convertible asset. Like your home or investment property, it will accrue value, but only if it’s nurtured and protected. Buying an existing business means you can hit the ground running. Making sure you’re the right fit for an existing business is as much about the price being right as your skills and interests being a match.

3 Simple Questions

Before you even consider undertaking a full analysis of inventory, assets, financial records, legal limitations, customers, debtors and creditors, ask yourself three important questions:

  1. Why is the business for sale?
  2. Does it have good financial and social capital, i.e. is it profitable and does it have a good reputation?
  3. What’s the outlook for the services or products it provides and the location, be it local, national or international?

If all the answers add up, make sure it’s a business you’re interested in and can operate with a passion. There’s no point buying into a hairdressing business if you can’t keep a secret and have never cut hair. You won’t know what to look for in hiring new staff and certainly won’t be able to retain customers, for whom a trip to the hairdresser is an opportunity to discuss confidences!

Identifying the right business should be part of your due diligence before looking to buy. A good broker can help you with referrals to career coaches.

Understand Every Aspect

The next step is a thorough undertaking of all available documentation relating to the business and thorough inventory of assets. Liabilities including debts need to be considered too. There are physical and intangible assets to every business. Employees can be the most valuable asset a business has, particularly in customer-facing roles and where the knowledge base has been established and accrued by one or more employees.

Goodwill or the permission to exist, expand and innovate within the community is also an extremely valuable asset. Manufacturers who have a rigid relationship with their customers may not have sufficient social capital to sell another class of products. Consider every asset class on its own merit. A business broker can be a valuable part of the due diligence cycle in determining both the physical and intangible assets.

Engage a Business Broker with Experience and Expertise

LJ Hooker Business Broking is Australian’s leading business broker. Our clients include Dominos, Snap Printing, Kwik Kopy, Dairy Farmers, Oporto and Michel’s Patisserie.

With follow-up sales support built into the only database designed for business broking in Australia, our bespoke services enable buyers, sellers, brokers and third parties to be fully compliant. For more on how to buy a business or secure a franchise, visit our homepage or call 02 9552 1111.

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5 Mistakes to Avoid When Buying a Business

Buying Businesses September 3, 2016

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It easy to fall into any number of pitfalls when you’re buying a business for the first time. After all, you’re ready to be your own boss and take charge of your destiny. You’re excited to build value from an established business that looks successful and has a great balance sheet.

As business brokers with extensive experience, we notice that there are five consistent errors buyers make.

Buying An Unsuitable Business

Falling in love with the product without fully appreciating the production is a common mistake many buyers make. Just because you love to eat doesn’t always mean you love cooking. Love cars? Doesn’t make you a mechanic, or even a chauffeur.

The skills you bring to a business are as important as the cultural fit. A hairdresser doesn’t always make the best salon owner if they’re not going to be actively involved in growing the business and can’t relate to the staff or clientele.

Finding the right kind of business in the right area is critical to the success of any new owner of an established business. Your skills, interests, and ability to connect with staff, customers and suppliers are critical to your success.

Misunderstanding the True Value

The assets of the business will be listed as tangible and intangible. Goodwill may form a significant value of the business. Buyers that don’t completely understand how the good will was established, evolved, and continues to exist miss an opportunity to capitalise on it.

Failing to Investigate

The balance sheet, business plan, and prospectus are critical to investigate in order to understand the value of the business. What many purchasers of an existing business fail to do is to scrutinise the market. Few spend time in the neighbourhood or learning about the geography, demographics and dynamics of the marketplace. A continental delicatessen in a suburb with a high influx of East Asian immigrants will need to innovate to maintain relevance. Similarly, a mechanic in an increasingly gentrified area may be priced out of the market with increased rents or developers knocking at the door.

Buyers who fail to understand the product within its context often fail to capitalise on a business.

Incorrect Financing

How a buyer finances the purchase of a new business can be the difference between success and failure. Going into debt to purchase a business can leave a new owner without a line of credit available to re-stock. Some buyers use a credit card debt, only to regret this option in the end.

By eliminating your own accountant from the process, buyers of an existing operation can neglect ways of maintaining cash flow and keeping the business afloat.

Buying the Current State

The ledger and prospectus should tell the story of how the business got to its current state. A good seller will also provide you with the reasons why, with a full account of investments in infrastructure and marketing. The seller may also have income and expenditure projections as well as growth strategies in the business plan.

Buyers often fail to think of how the business will operate in the future and what they’ll need to do to build and realise value.

Talk to a Broker with Business Experience

LJ Hooker Business Broking is Australian’s leading business broker, with clients that include Dominos, Snap Printing, Kwik Kopy, Dairy Farmers, Oporto and Michel’s Patisserie.

With follow-up sales support built into the only database designed for business broking in Australia, our bespoke services enable buyers, sellers, brokers and third parties to be fully compliant. For more on how to buy the right small business, explore our services or call 02 9552 1111.

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Is a Franchise Worth Your Investment?

Buying Businesses August 26, 2016

is-a-franchise-worth-your-investment

Buying into a franchise can be a successful strategy for building wealth. You can create value within an established, branded enterprise and benefit from established processes and best-known methods.

Similar to any small business opportunity, make sure the franchise is a good cultural fit and skills match. Buying a Pizza Hut probably isn’t the best idea if you’re celiac. Don’t like kids? Probably stay away from Gymboree. But if you love cars, Autobarn could be perfect for you.

A franchise arrangement usually requires an initial investment of several thousand dollars, with royalty fees payable on a periodic to cover advertising and brand related costs.

Benefit from In-Built Support Networks

In addition to providing marketing support, a franchise will also provide access to the buying network where, presumably, you’ll be privy not only to products specific to the franchise but special pricing and payment terms.

Buying into a franchise also lessens the risk for inexperienced business owners. A franchise has established systems and processes that make it easier for inexperienced owners to operate effectively without the burden of the unknown.

Additional Considerations

Before you decide on a franchise, a full understanding of your obligation and the obligation of the franchise is critical.

The best indicators of success are a diligent approach to understanding the agreement and being careful not to commit to onerous terms and conditions that are impossible to fulfil. You’ll still want to study the location and market to determine the chances of meeting your obligations and making a profitable income that meets your requirements.

Finally, like any small business, the success of a franchise requires hard work and long hours. Effective staff management takes time – you need to ensure that they are healthy and reliable and most importantly, that they respect you, the business and the role they play.

You’ll often be called on as a counsellor, or to fill in unexpectedly. If you’re running a franchise part-time or as an investment, talk to a business broker.

The Business Broker with Franchise Experience

LJ Hooker Business Broking is Australian’s leading business broker. With experience as an owner of 11 Pizza Hut franchises and 4 Gloria Jeans outlets, Gautam Jain and his wife Vanita have the technical expertise to give you the best advice on owning and operating a franchise.

With clients that include Dominos, Snap Printing, Kwik Kopy, Dairy Farmers, Oporto and Michel’s Patisserie, we can match buyers with trusted brands in franchising for a mutually successful outcome.

We offer follow-up sales support and the only database designed for business broking in Australia. For more on how to buy a franchise, visit our homepage or call 02 9552 1111.

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What to Look for in a Business Broker

Buying Businesses, Selling Businesses August 19, 2016

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Selling or buying a business is a long and arduous process. There are teams of experts involved from accountants and lawyers to banks and brokers. For most people buying or selling a business for the first time, the only expert in the team they may not have experience with is a business broker.

Identifying a broker that meets your needs takes some time and a little investigation. By putting together some simple interview criteria around the kind of business you’re buying or selling, you’ll be able to identify the business broker that’s the perfect fit.

Background and Credentials

Any broker you interview should be able to provide credentials either on their website or immediately upon request. A website with multiple listings and a solid team that’s been in business for a significant number of years will tell you something about their success.

Proprietary systems and processes that support the sale, as well as any further education and experience in small business, will indicate a commitment and knowledge about business ownership.

Size and Substance

If you’re looking to purchase a $500,000 business but most of the businesses the broker works on are in the $5m range, chances are you won’t be serviced with the same level of support offered to larger clients.

The broker you select should also be selling businesses like the one you’re selling or buying. Do they market properties in the same area you’re in? Do they understand franchises for sale if you have one to sell?

Trust and Respect

The most important quality you should look for in a business broker is honesty and integrity. Without trust, you’ll never be confident in your decision to list or purchase. A trustworthy and respectful broker will be transparent with the process. A broker that values a business relationship with you will also be open to negotiating fees. They will also work with you to execute the most favourable terms for all parties involved.

Ready to Call a Business Broker?

LJ Hooker Business Broking is Australian’s leading business broker. Gautam Jain and his wife Vanita have the experience and technical expertise to give you the best advice on owning and operating a franchise. In addition to owning 11 Pizza Hut franchises and 4 Gloria Jeans outlets, Gautam is a qualified Business Valuer by the Australian Institute of Business Brokers.

LJ Hooker Business Broking matches buyers with trusted brands in franchising for a mutually successful outcome. With follow-up sales support built into the only database designed for business broking in Australia, our tailored sales and after service process enable buyers, sellers, brokers and third parties to be fully compliant. For more on how to buy a franchise, visit us online or call 02 9552 1111.

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Making the Move from 9-5 to 24/7

Buying Businesses July 5, 2016

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Running a business may seem like a dream to many, but the reality is that it’s hard work and often less financially rewarding than continuing on a sure path through a regular career. However, a life-long career with the same employer seems more like a reality of a distant era than the norm with growing global instability and mergers and redundancies in the headlines on what seems a daily basis.

The lure of plentiful business opportunities in small businesses can prove too tempting for some and many dive into a purchase without considering the skills, demands and time required to succeed.

Most business owners who are selling have put a great deal of effort into establishing and maintaining a successful business and want to see the buyer succeed. If the business broker has done their job properly, a buyer can walk into a business confident that the health and demands of the business have been fully disclosed and discussed.

If you’re not sure if a business is right for you, start with some soul-searching and the two most important questions to ask yourself.

  1. Why do you want to start a business?
  2. What skills and experiences can you leverage?

Entrepreneurial Spirit

Even if you’re looking at buying an established business, you’re going to need some entrepreneurship skills to succeed. Market dynamics change and you need to be able to innovate and adapt to meet the demands of a customer base that’s beholden to trends.

Take for instance, a café. In a growth suburb with a high percentage of young families, you’ll need high chairs and perhaps a play area where parents can sit comfortably, and easy access and storage for prams, too. In an inner-city area of young professionals, a take-away window manned during the early hours will capture commuters looking for a caffeine fix on the way to work.

Skills and Experience

With so many reality TV shows bringing “food dreams” alive and helping home renovators launch careers from hobbies; it’s tempting to think that an interest can easily translate to a successful business.

Whilst the dream of running your own business may seem attractive at first, you should consider what you bring to the business. As a managing director or CEO, you’ll be called on to know something about everything in the business. So unless you can afford to bring in expertise, be prepared to do everything in your small business – from accounting to filling in for staff.

If you’re not sure where to start looking for purchasing a business that’s right for you, click here or call 02 9552 1111 (9am – 5:30pm Monday to Friday AEST). You can speak to an expert business broker at LJ Hooker to find an ideal Sydney business for sale.

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  • is-a-franchise-worth-your-investment

    Is a Franchise Worth Your Investment?

    by on August 26, 2016 - 0 Comments

    Buying into a franchise can be a successful strategy for building wealth. You can create value within an established, branded enterprise and benefit from established processes and best-known methods. Similar to any small business opportunity, make sure the franchise is a good cultural fit and skills match. Buying a Pizza Hut probably isn’t the best […]

  • mistakes-to-avoid-when-buying-a-business

    5 Mistakes to Avoid When Buying a Business

    by on September 3, 2016 - 0 Comments

    It easy to fall into any number of pitfalls when you’re buying a business for the first time. After all, you’re ready to be your own boss and take charge of your destiny. You’re excited to build value from an established business that looks successful and has a great balance sheet. As business brokers with […]

  • why-dont-many-9-5-workers-start-or-buy-businesses

    Making the Move from 9-5 to 24/7

    by on July 5, 2016 - 0 Comments

    Running a business may seem like a dream to many, but the reality is that it’s hard work and often less financially rewarding than continuing on a sure path through a regular career. However, a life-long career with the same employer seems more like a reality of a distant era than the norm with growing […]

  • 5 Reasons Why Buyers Aren't Choosing Your Business Infographic

    by on September 29, 2016 - 0 Comments

  • Order 2125 - Image 6

    What is EBITDA for Your Business?

    by on January 2, 2017 - 0 Comments

    Having a reliable measure of your business’s financial health is important to ensure its viability and its resale value. EBITDA (earnings before interest, taxes, depreciation and amortisation) is an accounting technique that offers a standard measure of profitability. Unlike other net income calculations, which use simple formulas like revenue minus expenses, EBITDA allows analysts to […]