B2B Property

Risk to generating future profits

B2B Editor1 March 2013
When you are selling your business, the more sets of financial statements your business has prepared by an accountant, the better. It will help demonstrate how strong your business has traded and if there have been difficult years – providing you can explain it and how the difficult years were addressed, buyers will be confident your business is profitable and viable.
When a business buyer is looking at a business, they want to know:
* How your business has traded up until now, and most importantly;
* How your business will trade into the future.
Hence why the Global Financial Crisis (GFC) was an important event for all businesses, as it was a reality check. It showed:
* Some businesses were unaffected by the GFC;
* Some businesses were affected but have since recovered and are strong businesses again; and
* Some businesses never recovered from the GFC and the businesses may never produce profits similar to pre GFC. So whilst the financials up to now are important and provide buyers with a picture of how the business has traded, more importantly is how the business will trade into the future. If a business is making $200,000 profit for the past 5 years, buyers need to understand whether this profit can continue going forward.
Some of the areas business buyers will want to understand further to determine future viability of the business are:
1. Owner(s) involvement in the business;
2. Impact of the current owner(s) leaving the business;
3. Spread of clients and impact of key clients leaving;
4. Economy the business trades in;
5. Technology and impact on trade;
6. Developments in the area;
7. Future competition;
8. Equipment condition to generate sales; and
9. Current employee performance, staff retention and recruitment.
So whilst the past helps buyers come to the table, it is the future viability of the business going forward that will help the business sell. Business buyers appreciate you have made excellent profits in past years, but they also want certainty this will continue for them into the future.
Once a year these cafes come to the market and it is kind of cafe any owner dreams of having.
70kg of coffee a week | 5 days | Secure lease
Run under full management from day 1 | Fit out like new
Walk in and make serious money
$600,000 + SAV
This business is always booked out in advance and has a very strong database of over 11,000. The current owners are selling as it is time for retirement.
excellent quality work shop equipment. Only one other mechanic in the area and no space for competitors to set up. Large workshop area with 5 bays allthe necessary equipment to most mechanical repairs
Before today, you could not buy the views or placement of a restaurant of this calibre in Canberra. Sitting 175 metres above Civic, you, along with your customers, will be mesmerised by how incredible this location is. It really has to be seen to be believed, to understand exactly what you are purchasing here. With a strong lease securing the location for the next 9 years and open only 5 nights a week and lunch on Fridays, you are going to fi nd it hard to purchase another business like this in Canberra.
Very strong business that has been in Canberra for over 35 years. This business is the leader in the Canberra region for selling heating and cooling products. It also has other lines like high end stoves, fans etc that provide excellent profi ts for this business. Turnover 2012 $2.66m | Rent per week $2,300 2012 Owners Profi t $300,000