And They Wonder Why They Have Problems ….

Hi Again,

I can’t believe it is so long since my last article. Things have really taken off since the new financial year started (1st July for the non Aussie readers) in that we are now finally getting genuine business buyers in the market place who are prepared to make realistic and acceptable offers. This is resulting in deals being done and businesses changing hands!

Yeah! We say. But it doesn’t come without some frustrations. One of the most common frustrations is people’s lack of “attention to detail”. In Australia we are famous for the “She’ll be right, mate!” attitude. Unfortunately, when it come 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 turns out later, 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 trick that gets pulled on us 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!

Next article to be posted will be “Read the damn documents BEFORE you sign!)

P.S. Check out my upcoming workshops in Perth – next one is October 23rd – go to Workshops tab for info.

Regards
John Denton
“Helping business owners achieve their life goals through buying and selling businesses!”

GST And The Sale Of A Business

I was asked today the very good question “Does the sale price of a business include GST and is GST payable?”

(For the non Australian readers, GST is our Goods and Services Tax (10%) collectable by the vendor or service provider on most things – there are exceptions but not worth going in to here.)

The answers are “No” and “No” – if the business is sold as a “going concern.”

The sale of a business as a going concern is GST free if:

• everything for the business’ continued operation is supplied to the buyer
• the seller carries on the business until the day it is sold
• the buyer is registered or required to be registered for GST
• the sale is for payment
• before the sale, the buyer and seller agree in writing that the sale is of a going concern.

Example: Selling a business

You are registered for GST and you sell your florist business. The sale includes the shop, delivery vehicle, stock, equipment and all the other things necessary to continue operating the business. You continue to operate the business until the buyer takes over, the buyer is registered for GST, and you and the buyer have agreed in writing that the sale is of a going concern. This is a GST-free sale.
Always consult your accountant for a definite ruling on the sale of your specific business!

Learn about this and a lot more at my next half day workshop CLICK HERE for details.

Regards

John Denton
Committed to helping business owners realise their life’s goals through buying and selling businesses

Roger Gott on “The 7 Key Steps To Developing Your Business Ready For Sale”

“A good session if you are starting in business or have been in it for a while. Until you know what is required to sell a business, you will find it difficult to create a successful one.”
Roger Gott – Cove Health Clubs
www.covehealthclub.com.au

Do You Treat Your Business Like A Farm or a School?

Well, come on, honestly, do you treat you business like a farm or a school?

Well known author, stephen Covey, develops an excellent metaphor around “cramming” (school) and “farming” (farm). He says that for long term benefit or to give things longevity then they need to be treated like a farm. For example, business relationships or  relationships of any kind, need to be treated like farming if you want them to be successful over time. By farming he means you need to be working on them all the time. Nurturing, developing and looking after them – long term.

On the other end of the scale you have what happens in schools and particular colleges and universities where students often leave everything until the last minute
and then cram for an exam. This gets he student a certificate but NOT an education, according to Covey. To become educated takes time – in otherwords, it’s farming.

What does this have to do with business, you ask? No, I’m not geting in to selling farms and schools!

To build a business “ready for sale” requires farming! It is a long term exercise if you want to sell for the best possible price and quickly and easily. Many aspects of a business which affect its value and saleability need to have a track record of consistency over a longish period of time. Usually a minimum of three years. A good track record of growth and profitability over a period of time are paramount – just to mention one aspect.

As I am committed to helping business owners realise their dreams through buying and selling businesses I am running some half day workshops on “The 7 Key Steps To Preparing A Business Ready Sale”. If you are interested in attending a workshop, or know someone who would like to attend just CLICK HERE for the details. If there isn’t a workshop in your area, just use the CONTACT US tab on the web site to request one! When there is enough demand I’m willing to go anywhere (well almost!).

Until the next time – remember, treat your business like “farming” and not a “school” – and like a well run farm it wil sustain you for a very long time.

Until the next post!

Regards
John

John (the Jedi) on Businesses

John Denton’s catch cry and passion is “Building Business’ For Sale or Lifestyle”. John sums it up well in that people mostly started their business for a ‘lifestyle’ reason and then somehow became a ‘slave’ to the business at some level.

John Denton is our “Jedi” knight and his core question… “What’s the objective here?” cuts straight to the bone and stops us from going over ‘to the dark side’ in all our entrepreneurial ‘flair and creativity’.

That objectiveness converts into manageable, implementable and focussed tasks that help us and many others move forward in their business with great momentum.

For those who know the ‘Jedi’ ways John also lives by the “Do… or do not… there is no try” which translates into massive action.

By Peter Butler – Smarter Websites

What To Do About It

Hi Again (so soon!),

See previous post. This is exactly why we, Denton & Associates, are committed to help business
owners prepare their businesses for sale and achieve the best possible price in the shortest time with the highest degree of confidentiality. All businesses sell at some point – many involuntarily. Only the
best prepared businesses will sell easily and at the best possible price. Contact us to get a Business Appraisal and find out where your business stands. CLICK HERE to contact us about an appraisal.

Regards
John