What should a potential buyer be looking out for?

Can you tell us about your background and experience? What brought you in to the world of Business Broking?

Funnily enough I didn’t have a business background as such, I had a Detective Position with Victoria Police. Towards the end of that career I opened a couple of gymnasiums and built them up from scratch. I used a business broker to sell one of them and it was disastrous, he made a mess of it and my exit strategy really took a knock. So I looked into what qualifications were needed to be a broker, and sort of fell into the role from there.

Do you have any rules for what makes for a good buying opportunity? What should a potential owner/buyer be looking out for? 

I think the business environment is constantly changing, and any rules I thought were important have gone out the window. A good buying opportunity today may not be tomorrow, so I try to find out from my buyers exactly what their goals are, and then I can do my best to find a business that fits what they want to achieve. One thing I do advise potential owners and buyers is to really look at the Risk V Reward on the business. Really weigh up what they want to happen when they take over the business, and what the result will be if that does not happen in their lives. The ramifications are enormous. It’s important they go into a new business with their eyes open.

What areas does Trident focus in?  What markets do you focus on?

At Trident, the majority of businesses we have for sale are hospitality based. We don’t necessarily specialise in that field, it’s just what turns over the most. I have sold some transport businesses, gymnasiums, clothing retail outlets, regional businesses, it’s amazing what people are looking for out there.

What advice do you have on positioning a business for sale?

That’s such a hard question to answer because it is a very important point. One of the major issues I see is some vendors have a business worth hundreds of thousands of dollars and when it comes to putting that business out there in the market place for sale, they don’t contribute enough funds towards advertising. Many vendors prefer a no cost approach with a 2 sentence basic listing which really won’t get the exposure that business deserves. I explain to vendors that as a general rule, about 10% of the sale price should be allocated or budgeted. By that I mean, advertising and marketing campaigns, broker commissions, lawyers and accountants fees, even landlord costs for lease transfers etc. That’s just the reality of selling a business if you want the best result.

What key industry trends should buyers and sellers be watching out for?

I would be concerned about overall economic conditions, including debt levels, credit card usage, unemployment levels and housing values, these all impact a consumers desire and comfort to spend. With a possible increase in the GST I think that will hurt general retail quite a bit until consumers get used to it. Having said that, I’d say if you are looking to buy a business, look for something which has a strong trading history in a good location with manageable rent and good organic growth. It may be a franchise, it may not, the stronger the business is the more likely hood of success.

Any advice for a business owner looking to sell their business for the first time?

Yes, great question. Prepare the business correctly by having all the financial information up to date an accurate. It doesn’t need to be showing a multimillion dollar profit, genuine purchasers are willing to “see though things” to a degree, but if chunks of sales are missing, operating costs are all out of whack, information is inconsistent or not available, it is really difficult to extract the true value of that business in a sale situation. Your broker is your friend and so is your accountant. Listen to their advice. It’s better to delay listing a business and work on getting things up to date and correct, rather than rushing into it and ending up with an over exposed business with no result.

What drives you to do what you do? What makes a good broker?

I think what makes a good business broker is communication. It is a very rewarding thing when you present yourself to the vendor, obtain the listing, work on that business and take it through to a sale and be paid well for it. It’s fantastic to have satisfied vendors and purchasers knowing we have made the deal happen. I think as brokers we often don’t appreciate that the business we have on the books is someone’s livelihood, it’s important to them that we get the best result we can and we have an obligation not to stuff it up. We must communicate at every point with every person to keep things moving. It’s a very satisfying role, certainly challenging, but definitely rewarding. I really enjoy waking up every day and getting out there.

Thankyou Brian