Tips when taking over a small business

Swimming with sharksWhen buying a business what are the most important things you can do?

   Rule 1# Do your due diligence

   Rule 2# Do your diligence then refer back to rule 1#
 
These essential rules will hold you in good stead with any business you may be considering to buy. The following are some important sub areas of due diligence you will also want to consider when buying or merging with a new business:
 

Identify the challenges and create opportunities within your own businesses existing culture, staff and roles. Consider ways to improve the existing culture, staff and roles within the new business you are considering to purchase by implementing the best from both businesses.

What are the costs and how much time will merge the two businesses require?

How will you retain your existing business and new business clients, while also minimising the risk of loss of these clients?

How will you be adding more value to existing and new clients than they received previously?

What potential new supplier relationships will there be and how will these impact your existing relationships?

Do you require non complete clauses (restricting the seller) within the business purchase contract? This should document timeframes and territory restraints.

How is the business valuation calculated? (Past earnings continuation, profit & loss, business tax returns, depreciation schedules etc..)

How will you purchase the business? i.e. Your funding mechanisms. Will the purchase be made with cash, vendor finance, personal borrowings etc. and will there be any milestone payments?

What is the best structure of the new business, taxation reporting, payroll and compliance?

Will you retain continuation of your own business branding or new branding? This goes across social media, logo's, business cards, signs etc.

Where is the preferred business location and sub locations and how to cost effectively maintain the existing footprint and service existing clients?

Do you need to update or change your technology, software and business process across both businesses?

What is your exit strategies for the new business?

What is the expected income, profit and loss, assessing the effort required and cost viability of the exercise vs. organic growth of existing business?

This above list is just the tip of shark errr iceberg when it comes to the different areas one needs to consider when purchasing any new business.

When I purchased another financial planning business the purchase was within the same industry that I knew, even then I've found the process both daunting and exhausting. I would expect even more due diligence would be required if the business was to be in a different industry than one's own.

In my experience the purchasing another business involved all the above areas or diligence and implemtation plus changing licensees, software, locations, residence, business structures, business accounts, changes in location i.e. moving to cairns from Sydney. It's been a massive task!

Very importantly the transition required increased communication with clients and staff and promoting the positives or the expansion. We also had to refurbish the existing premises and much, much more which has been now rolling out over the last 12 months.

12 month gone, with hindsight and on balance, I am happy with the progress the team, our clients and I have made.

The next 12 months our focus is on delivering even more value to clients; giving them greater convenience and reducing clients costs. This too is our business marketing approach because our clients are our greatest advocates and helping them achieve their goals sooner is do what we do and helps us achieve our goals sooner too.

About Peter Horsfield

Peter Horsfield in an Authorised Representative and Investsure Holdings Pty Ltd ABN 16 050 286 630 as trustee for Horsfield Family Trust ABN 55 609 068 513 is a Corporate Authorised Representative of Infocus Securities Australia Pty Ltd ABN 47 097 797 049 AFSL and Australian Credit Licence No. 236523.

General Advice Disclosure

Sources of this information are considered to be reliable but are not guaranteed. Information published in this article has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained in this document is General Advice and does not take into account any person's particular investment objectives, financial situation and particular needs.

Before making an investment decision based on this advice you should consider, with or without the assistance of a qualified adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances.

Add a comment

Reboot

Palm-Cove-Beach-2Just like when my personal computers freeze because I have too many programs open so to my decision making freezes when I have so many competing important matters in my life.

This got me thinking about how to solve life’s problems from the perspective of an IT help desk.

Life has taught me when I choose to neglect a problem so too does my probability of an epic crash increase. When talking with others about my problems I’ve also found that most of us share similar if not the same problems and fears. Most importantly our problems are not unsolvable.

Often I've experienced many of my life’s problems solved simply by updating an old program or as I call it my daily routine. If this update doesn’t work then I research better programs to do the job and install this new program i.e. daily routine into my life.

Deleting my problem programs can feel good at the time and often solves my problem however it can also impact other programs running simultaneously. As an example is if my new routine was not to include sugar in my diet and my partner still wanted to eat foods containing sugar. This would cause obvious conflicts.

If these above steps don’t solve my problem then a full system reboot may be required. From my personal experience this rebooting decision is dramatic and drastic, however doing so I’ve often found it to be the fastest way to achieve results. This reboot is akin to saying this is the new me and moving forward my life will have the following routines <add>, the past is deleted and this is my new operating system.

The last alternative is definitely the most expensive and radical. It may be time to buy a new computer. Think career change, residence change, partner change etc. Hence from my personal experience this last decision should not be taken lightly however it may be required and serve a greater good.

Acknowledging and taking action to address problems in our lives takes courage. It also requires a mindset of personal accountability time and patience, however most importantly it takes action.

How do I fix the problem of too much debt? Get it to a sustainable debt level where it doesn’t negatively impact me or remove debt completely from my life.

How do I fix the problem of having enough in retirement? Create a habit of minimizing my lifestyle expenses and increase my savings. This has two benefits first it reduces my day to day lifestyle expenses and obviously second it increases my wealth.

How can I enjoy a more balanced life? Do the things that only I can do and delegate everything else.

How can I worry less in life? Focus on what I can control and let go of what I can’t.

About Peter Horsfield

Peter Horsfield in an Authorised Representative and Investsure Holdings Pty Ltd ABN 16 050 286 630 as trustee for Horsfield Family Trust ABN 55 609 068 513 is a Corporate Authorised Representative of Infocus Securities Australia Pty Ltd ABN 47 097 797 049 AFSL and Australian Credit Licence No. 236523.

General Advice Disclosure

Sources of this information are considered to be reliable but are not guaranteed. Information published in this article has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained in this document is General Advice and does not take into account any person's particular investment objectives, financial situation and particular needs.

Before making an investment decision based on this advice you should consider, with or without the assistance of a qualified adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances.

Add a comment

20 ways you can live like a Billionaire Today!

Genious-Billionaire-the-avengers-33151403-500-3101. Start your own companyNo billionaire is an employee unless they are an employee of their own company. Starting your own company offers additional tax benefits in addition to creating equity in an entity that can be sold later or employ others so to free up your time to do other things in life that only you can do.

2. Join a club

Billionaire’s love exclusivity. By joining a club or creating one you become a member of something exclusive. Clubs are where likeminded people meet, network, relax and do business.

3. Give to charity, donating your time and money

A study recently found the good feeling we feel when giving is not actually determined by the dollar amount given but more by the action of giving. So even by donating a small amount or volunteering you’ll benefit just as much as a larger donor. Better still donating to a charity often comes with tax deductibility. And if you believe your charities spending is savvier and more specific than the government’s you have the opportunity to refocus where your tax dollars are spent by donating to your chosen charity rather than the government deciding for you.

4. Never retire

Have you ever heard of Billionaire retiring? They may step down from managing their business however they remain on the board. Billionaires love what they have built, employment of others, their contribution to society and ensuring a legacy remains.

5. Visit art galleries and museums

There is no need to establish a personal art collection when one can get appreciate priceless art and sculptures in our cities museums and art galleries. Also appreciation of art communicates with the soul and mind offering different perspectives whist challenging our beliefs.

6. Own an iPhone

IPhones are simply the best technology one can buy. Bill Gates is known to use one. For a small cost you can own and access the same technology as Billionaire’s today.

7. Dine with friends regularly

Humans are social creatures, therefore spending time with those who accept us and enjoy our company is essential to renewing ourselves, exchanging ideas, debating as well as experiencing the “Joie de vie” the Joy of Life!, while partaking over a meal with friends.

8. Invest your time and money into appreciating assets i.e. people and companies

The main reason why the wealthier are getting wealth is because they continue to invest and reinvest their time and money into appreciating assets. Think compound interest. This is opposite to what most other do i.e. depreciating assets such as car’s, fancy clothes, holiday souvenirs etc.…

9. Be absolutely passionate about what you do

Passion is the glue that holds together three other essential ingredients for one’s success. These essential ingredients are Knowledge and Skills, Mental and Psychological Strength and Physical Stamina. Ensure your passion is succinct, compelling and all about you!

10. Support a political party

Politicians are elected to represent the people. Politicians also legislate laws that effect businesses and individuals in our communities. Keeping abreast of these changes whilst also having an open door to the political parties on any side of politics makes for better informed business decisions and opportunities.

11. Spend less on yourself than your investments earn

The secret to great wealth is simple. Spend less than you earn and invest everything else. True financial freedom is attained when your investment income exceeds your lifestyle expenses (full stop).

12. Sleep on crisp clean bed sheets

Sports coaches attest to the fact the better you rest the better you perform. There’s just something luxurious (and attainable to us all) about sleeping in crisp clean bed sheets which also aids a good night’s rest ensuring you wake up on the right side of the bed in the morning.

13. Exercise regularly

Billionaires need to exercise just as much as the rest of us. Regardless of how much money you have in your bank, we all know the importance of exercise combined with a good diet as well as the positive impact these have regarding our choices and decision making process.

14. Know your business i.e. your financials

Billionaires are known to make decisions quickly. The reason they have the confidence to do so is because they know their finances i.e. their assets, debts, incomes and expenses. Knowing where you stand financially is essential for both peace of mind and being in the box seat to take advantage of opportunities when they come your way.

15. Be trust worthy and trust others

Unless you inherit, marry, or win a billion dollars chances are you are going to have to engage others on your journey towards financial independence. Building trust has two essential ingredients character and competence, without both of these ingredients inefficiency and headwind will continue to dog you and be a roadblock to your success. With these your success will be efficient as well as your chances heightened of keeping it.

16. Be innovative. Think outside the square when solving problems

Money flows to where it’s most valued. By creating and delivering more value to others you increase your own chance of success. Innovate first and if your innovation adds sufficient value to others, then the money will come.

17. Regularly challenge yourself

Learn to work harder on yourself than you do on your job. “If you work hard on your job you can make a living, but if you work hard on yourself you’ll make a fortune” – Jim Rohn

18. Do it i.e. take action

Without action good intentions and goals are but dreams. “Life is not a dress rehearsal. This is your life”. Pastor Lawrence T. Holman

19. Learn to say no.

Any fool can say yes or buy what they want, however it takes courage to say no, to make choices and make personal sacrifices for ones greater success. I remember the John West ad. “It’s what John West rejects, that makes John West the best!” If you want to be the best then learn to say no, be you a billionaire or anyone else.

20. Delegate low payoff activities.

The one thing we all have in common is time. 24x7=168hrs per week. Be you a Billionaire, a man, woman, child or adult. Investing your time doing activates having the highest direct payoff is essential for a life of fullness and contentment. Do only that which advances your relationships, spirit, health, career/business and community everything else can and should be delegated. If you can’t do this look back to No.15. We only have 168hrs a week.

 

About Peter Horsfield

Peter Horsfield in an Authorised Representative and Investsure Holdings Pty Ltd ABN 16 050 286 630 as trustee for Horsefield Family Trust ABN 55 609 068 513 is a Corporate Authorised Representative of Infocus Securities Australia Pty Ltd ABN 47 097 797 049 AFSL and Australian Credit Licence No. 236523.

General Advice Disclosure

Sources of this information are considered to be reliable but are not guaranteed. Information published in this article has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained in this document is General Advice and does not take into account any person's particular investment objectives, financial situation and particular needs.

Before making an investment decision based on this advice you should consider, with or without the assistance of a qualified adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances.

Add a comment

Small business & Start up Tips

Q&A with industry expert Peter Horsfield

Break-Down-The-Labyrinth-Walls

What was the inspiration to be a business owner?

It's the third best proven way to create real wealth i.e. share, property and business.

Anything you have experienced that could help others build their business successfully.

Know why you are doing it. Your why must be greater than you why not to to do.
Your commitment must be greater than your discomfort (short and long term).

Challenges or roadblocks that you have overcome?

Same growing pains as anyone has starting from nothing. Finding clients, forming referral relationships, juggling bills etc..

Followed by expanding to quickly and then being hit by a GFC (a big thing when you have a financial planning business), followed by changes in legislation, media hysteria, industry rationalizations and disruptive technology.

However when you know clients lives are improved because of you commitment and ongoing relationship with them, all the "uncontrollable noise" fades and you get on with doing what you do best i.e. Helping people make smart choices about their money for the reasons important to them.

Add a comment

Login Form