Hi Business Owners,
It’s almost the end of another financial year – well at least it is in Australia. The end of the year is a good opportunity for reviewing your business performance over the last year as well as setting strategies, goals and plans for the coming year.
One of the opportunities which is often overlooked, is the opportunity to restructure your chart of accounts in your accounting package. Why would you want to do that?
Business owners: make sure you don’t build the business “around” you, who you are and your qualifications etc. That is not very appealing to a buyer who has to come in and replace you!
When building a business ready for sale, remember to think like a buyer. For example, don’t use your name in the business name! Don’t build the web site all about you! Separate yourself from the business.
Obviously “key economic advisory group” members are NOT business owners in Perth CBD. According to the Business News headlines email today;
A congestion charge, where motorists pay to enter the central business district at peak times, should be introduced in Perth, a key economic advisory group has said. The West
Business owners in the Perth CBD are already complaining about the lack of parking discouraging people from coming in to the city. Add to this the fact that City Of Perth parking fees all go up by 20 cents an hour from July 1, and then if you add a congestion charge on to get in to the city - who is going to go in to Perth to shop, relax and spend money?
Given that the State Government are developing the river front and sinking the railway line between the CBD and Northbridge to encourage more people to come in to the city and spend time and money there - then a congestion charge would seem to be working against that.
If you are a business owner in the City of Perth - what do you think?
In Australia we are famous for the “She’ll be right, mate!” attitude. Unfortunately, when it comes to legal contracts and the exchange of large sums of money if “She ain’t quite right mate!” then it can end up costing someone a lot of money, time and stress. And none of us need any more of that.
An example is the legal entity of the seller’s business and the buyer’s business. It’s one of the first questions I ask people. And they tell me it is, e.g. XYZ Pty Ltd. It gets put on to the paperwork and the owner signs the Authority To Act, for example. In spite of repeated questions it can turn out later, possibly at a critical time, that there are multiple directors and some don’t want to sell. Or, there is a “trust” involved and the Pty Ltd is a trustee for the trust.This can cause all kinds of complications down the track.
Another common mistake is the incorrect spelling of business names. Over a period of time the owner forgets that they registered XYZ (W.A.) Pty Ltd and not just XYZ Pty Ltd or something along those lines. When I pull them up for it they ask “Well isn’t that close enough?” to which I always answer “If you are one digit out dialing a telephone number, does it really matter?”
Of course it matters!!! And then settlement of the deal gets delayed and people get angry and frustrated and start looking for people to blame. No matter how much as brokers we strive to get the correct information and detail, we are usually at the mercy of the owner’s memory (apart from certain things which can be searched on government databases) – which has often faded with time!
TIP: Always check what you are writing on forms BEFORE you fill it in. And the old adage “NEVER ASSUME” – please!
P.S. Check out my upcoming workshops in Perth – next one is March 7th 2012 – CLICK HERE for more details and registration.
“Helping business owners achieve their life goals through buying and selling businesses!”