BUSINESS FINDERS CANADA BLOG

FIVE Considerations When Buying Your First Business

While you sift through those piles of mundane papers, redundant forms, and pointless procedural tasks as you work for “The Man”, you think how life would be owning a business and being your own boss.

Five Considerations When Buying Your First Business

Now, weeks later, you have made the decision to buy your first business and enter the world of the self-employed. You have even chosen a local business and are working with a great Business Broker looking to put forward an offer to purchase. Everything seems great, but, you can’t sleep and your stewing pot stomach feels like a concoction of excitement, fear, exhilaration, fear, hope, fear, gratitude, and may other elations, but, mostly; fear. Fear of failure is a roadblock to success for entrepreneurs, but, regretting that you didn’t take that initial step to tackle your fear of owning a business is much more difficult to overcome; and it leads to resentment.

It will be overwhelming at times and each business case is unique, but, here are Five Major considerations to overcoming any lingering fears for a first time business buyer:

  1. BELIEVE IN IT – Buy into something that you are truly interested in and an industry you believe in. It needs to be a good fit for your interests and lifestyle as well. Below the surface of business fundamentals is a real person that requires fulfillment from their efforts. Don’t let yourself down by buying something that doesn’t fit and resonate with you.
  2. MAKE INFORMED DECISIONS – Line up your consultants to discuss your decision; just remember that YOU make every final decision, not your consultants. Your Business Broker, Banker, Lawyer, and Accountant will all be involved in the process so it’s best to schedule these appointments quickly.
  3. COMPLETE TASKS QUICKLY – Create your PRE-CLOSING and POST-CLOSING CHECKLISTS to ensure that you know what you need to do each day and then do them. Edit the list daily and ask your Business Broker for their input. Remember that if you require GST, PST, Business Number, Business License, Worksafe Account or some other output from a government organization, its going to take 10 times longer you think so do those first allowing sufficient processing time. Often the landlord is a large REIT or corporation and assigning of a property lease will require similar considerations.
  4. CASHFLOW IS KING – Sufficient financing to purchase the business and get through the first 2 months of operations is critical. Ensure you have enough cash and financing in place to cover everything on your checklists. Remember, on day one, your business (personal or corporate) likely has zero credit with suppliers so expect to pay C.O.D. even if the Seller currently has 30-60 day terms. Don’t forget about your lease deposit, lawyers fees, business insurance, utility deposits, first months rent and payroll for month one.
  5. FOLLOW YOUR PLAN – Your business plan isn’t used just to get a loan. Follow your plan. Revise or Update it as frequently as possible. Strive for your growth targets and make decisions early on as to how you will achieve them. Profit will be the bi-product of executing a well thought through plan and fulfillment will be the feeling you get at the end of it.

Business Brokers regularly work with first time business buyers and buyers who have purchased many businesses who face these tough considerations. They understand this process and the costs/benefits associated with each unique business case. Business Brokers can guide all business buyers through the entire process from the time you choose to join the self-employed to the time you enjoy your first year of profits. Don’t leave your next big business decision up to chance. Understand the major considerations as a first time business buyer and tackle your fears head on.

Remember, each business case is unique and your Business Broker will provide advice and direction during the entire process.

Business Broker Profile: Kim Davies

We want you to get to know us, as we get to know you. Kim Davies - Managing Broker - Business Finders Canada

Our professional business brokers help Business Finders Canada stand out from the crowd.

To highlight our team, we’re featuring each of our brokers in a Q&A.

Meet Managing Broker Kim Davies:

How would you describe what a business broker does?

If you are someone who is unfamiliar with the buying and selling of businesses, the term “business broker” might be a bit confusing.

A business broker is a professional who has specific training and experience in helping people buy and sell businesses. If you’ve ever bought or sold a home, then chances are you’ve worked with a real estate agent. You can think of a business broker’s role being very similar to a real estate agent; however, the business broker is helping you buy or sell a business, which frankly is a more complex endeavour.

Like real estate agents do with homes, business brokers can help you buy or sell a business. Business brokers typically have years of training and experience in buying and selling small to large-sized businesses and therefore can provide you expert guidance that can save you precious time and money.

What’s been your favourite experience in the industry?

My favorite experience in the industry to date is the unpredictability of it all.

There isn’t a single transaction that is the same. This profession is not for the weak of heart! It can gobble you up and spit you out in swift fashion or it can be the most rewarding experience of your life.

I think back when I first started my career in real estate and remember very fondly receiving my first financial reward for my first sale. I still have contact with those clients (now friends) and have received numerous referrals from other clients because, to me, my clients were never just a transaction. They were much more… a lasting relationship.

In this industry, it is a fact that clients don’t care what you know until they know you care.

Who inspires you?

The people in my life that inspire me most are family members. I have three boys of my own and three step-sons I adore. These boys are a constant source of inspiration for me. We have athletes, musicians, adventurers, work horses, and even comedians in our family.

My husband was the single person in my life that gave me the confidence and gentle push that I needed when I was deciding to change to a career in real estate. He has continued to be my biggest source of encouragement and support.

I truly wish everyone was as fortunate as I am! Great kids, Great husband, Great career, GREAT LIFE!

What’s a defining moment in your life?

A defining moment in my life was when I was sidelined with a painful condition which really took me out of the game for almost four years straight.

I am not the kind of person to back down from a challenge or opportunity which often caused me a lot more stress than needed. I had an inability to give up control. When dealing with this condition, I was FORCED to learn to let go of things. I had to ask for help and to accept help when offered. It was a huge eye opener and although I wouldn’t want to ever go through it again, I am forever grateful that it happened.

I am still a bit of a “control enthusiast” as my husband would say, but have learned to let go of the reins a bit and enjoy life a lot more.

What’s an important piece of advice you give to business owners?

The piece of advice I would give business owners is “use a professional” when it comes time to sell your business.

Business brokers are trained and experienced to help you. Use them!

So many business owners assume that a residential real estate agent can provide them with the same service.  It just isn’t so.  Business brokers in addition to being licensed Commercial real estate professionals can offer you that next level of service and knowledge. They are trained for this. It would be equivalent to using a care aid to perform heart surgery! Both are trained in the medical field… one has just been trained much more specifically.

Do you have a favourite quote?

I, not events, have the power to make me happy or unhappy today. I can choose which it shall be. Yesterday is dead, tomorrow hasn’t arrived yet. I have just one day, today, and I’m going to be happy in it. ~ Groucho Marx

What’s the best way for people to connect with you? 

You can find me here Monday to Friday at the downtown office (1652 Pandosy Street in Kelowna),  250-491-1111, or manager@businessfinderscanada.com.

If you know of someone thinking of buying or selling a business, who would appreciate the kind of service we offer, we’d love to help them. So, as these people come to mind, just drop me an email or give me a call with their name and business number. I will be happy to follow up and tend to their needs.

Silver opportunity for entrepreneurs

As Canada greys, more business owners are looking to sell 

Silver Opportunity for Entrepreneurs - Canadian Quarters

This is an unprecedented time in Canadian business.

Businesses are starting to change hands more and more, passing from a greying Canada into the hands of a younger generation.

A study done by the Business Development Bank of Canada underscores this, pointing to a massive turnover in the ownership of small businesses over the next five years.

“Four out of 10 entrepreneurs in Canada plan to step away from their businesses,” says BDC.

“In fact, small and mid-sized business owners are older than the rest of the workforce.”

Consider this: Canada’s median age has climbed from 35 years in 1996 to 41 in 2016, and will reach 44 in 2031, according to Statistics Canada.

Look at a few more numbers:

• Almost 60 per cent of those who own small and mid-sized businesses are 50 or older.

• Four out of 10 entrepreneurs in Canada are likely to leave their businesses within the next five years, up from one in three in the mid-2000s. The main reason they give for moving on is retirement.

That means opportunity is knocking for both sellers and buyers.

It also means business owners will have to face tough decisions.

As they think about retirement, they will have to consider their exit strategy, which could include family succession, a management buyout, a sale to a third party, and the worst-case scenario of winding down the business and selling off the assets.

“One overriding message is clear from our research: succession planning is not easy, and it requires more time and more resources than most business owners might expect,” says BDC.

“As with selling a home, the business may require some ‘staging’ to make it more attractive to buyers. Those willing to put in the necessary time and effort are likely to be well rewarded.”

A professional business broker can make a big difference in whether a seller will succeed. We’ve helped hundreds of people through this process and can help you prepare for sale.

We’ve also helped hundreds of entrepreneurs achieve their dream, and buy a business.

Selling and buying a business is a complicated process.

Together, the brokers at Business Finders Canada have more than 200 years of experience in the industry.

We’ve seen more and more people turning to a business broker for expert advice on all kinds of issues, including properly valuing their business and getting a business ready to go on the market.

When it comes down to it, buying a business is one of the most important decisions you’ll ever make. It will have a long-term impact on lifestyle and finances.

We can help.

More information about business brokers.

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Why do business in the Okanagan?

7 reasons the Okanagan is a great place for business

Visit the Okanagan - Sign with Arrow

We’ve said it before and we’ll say it again: The Okanagan is a great place to do business.

The beautiful valley nestled in southern B.C. boasts wineries, ski hills, lakes and rolling vistas. It attracts skilled workers and tourists who have money to spend.

There is a major university, an international airport and restaurants to satisfy any foodie.

Business Finders Canada is based in Kelowna and we work with lots of people who want to relocate here.

Here are our top seven reasons to do business in the Okanagan Valley.

1. People. The Okanagan is a tourism hub. The Kelowna International airport has been experiencing record growth year over year – often month over month. Tourists mean business opportunity. They visit hotels, restaurants, bars, gas stations and stores. They buy clothes, toiletries, souvenirs and experiences.

2. Lifestyle. Who doesn’t want to live in a four-season playground? Okanagan lifestyle includes skiing, snowshoeing, boating, fishing, exploring. Our summer is hot and sunny. Our winter is mild and filled with activity.

3. Economy. When it comes to entrepreneurs, the Okanagan reigns. Business licences have increased and unemployment is low. People here are working in a region with strong tech, tourism, medical and housing sectors. Commercial real estate is humming along. There are opportunities to buy and opportunities to sell.

4. Health care. Wherever you are in the Okanagan, you’re close to top tier medical care. With three major hospitals and the Interior Heart and Surgical Centre, the region is home to top doctors and surgeons. It also has a thriving service industry that includes clinics, medical equipment suppliers and technical support.

5. Culture. From marathons to concerts, festivals to sporting events, there are near-endless opportunities for sponsorships and volunteer involvement. Being active in the community is a great way to network, promote and enhance your lifestyle.

6. Resources. The Okanagan has strong advocacy for business. Chambers of commerce are active throughout the region. The Okanagan Economic Development Commission keeps track of key indicators and young business people have their own collectives.

7. Workforce. The Okanagan has a diverse workforce, ranging from skilled labour to summer students to contractors in every industry. The sunny Okanagan is constantly drawing smart, skilled dedicated people. We have a deep well of talent.

This isn’t to say there are a lot of other great places to do business. We help people buy and sell all over Western Canada. Kelowna is where Business Finders Canada was founded, and we love living here!

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Thinking ahead makes you money

Thinking Ahead Makes You Money - When is the Best Time to Sell?

People often ask us: When is the best time to sell?

The obvious answer is when your business is worth the most.

But it’s more nuanced than that. It’s time to sell when you’re ready. Or when you’ve lost interest. Or when a solid buyer comes along. Or when outside interest in your business appears to be hitting a significant peak. Or, or and or…

No matter what the answer is for you, selling your business is something that should be on your mind from the very start.

When people ask us when they should get ready to sell, we’re only half joking when we say ‘yesterday!’

Decisions you make early on will likely affect the sale price and your ability to sell.

As your business grows, it’s important that you put into place systems that are able to independently run when you’re not at the helm. As we’ve discussed, that’s part of a strong exit strategy. (It’s also a way to make sure you can take a proper vacation!)

Now is a great time to get your business working for you – rather than the other way around.

We’re living in the digital revolution. Top business experts at the Business Development Bank of Canada say the new industrial revolution affords businesses great opportunity. Digital advances can be used to create systems that help with accounting, field reports from staff and tracking warehouse inventory.

Those kinds of innovations can help cut costs and – just as importantly – create systems that make transitioning a business easier on the buyer.

That’s the kind of thinking that will increase the sale value of your business when you’ve decided it’s time to sell.

Having systems in place early will also mean you’re able to sell on a dime, so to speak.

You may not be thinking about selling now. In fact, you may be fully occupied with how you’re going to grow into the number 1 player in your market.

Certainly, we get into business to make a profit every day, every week, every month, and every year. However, we also build our own business to sell it someday.

Never lose sight of the end game.

Business Broker Profile: Andrew Pohl

We want you to get to know us, as we get to know you. Andrew Pohl - Licensed Commercial REALTOR® and Certified Business Broker - Business Finders Canada

Our professional business brokers help Business Finders Canada stand out from the crowd.

To highlight our team, we’re featuring each of our brokers in a Q&A.

Meet Andrew Pohl:

How would you describe what a business broker does?

We serve as a hybrid between a matchmaker and a Sherpa. Beyond making the appropriate connections between buyers and sellers, we provide assistance in navigating the often complex process of transitioning a business between owners.

What’s been your favourite experience in the industry?

I really enjoy following up with former buyers and finding out that they’re pleased beyond measure with their purchase. Beyond providing a living, a business purchase can change the trajectory of the lives of entire families, and it’s a lot of fun to see exactly that happen!

Who inspires you?

The brave entrepreneurial individuals who often take the path of most resistance, and work tirelessly to pursue their dreams of being their own boss, and doing something that they truly love.

What’s a defining moment in your life?

Getting married. My wife and I just celebrated our 10th anniversary, and it makes me realize what a joy it is to be part of a loving and symbiotic partnership.

What’s an important piece of advice you give to business owners?

Be prepared to work exceptionally hard (especially in the beginning), surround yourself with good people, and don’t be afraid to ask for help when you need it.

Do you have a favourite quote?

“In the business world, the rearview mirror is always clearer than the windshield.”
~ Warren Buffet

What’s the best way for people to connect with you?

Email (andrew@businessfinderscanada.com) is usually best when confidentiality is concerned, otherwise Facebook and Twitter work just fine.

Business Broker Profile: Nelson Bayford

Nelson Bayford - Business Finders Canada

We want you to get to know us, as we get to know you.

Our professional business brokers help Business Finders Canada stand out from the crowd.

To highlight our team, we’re featuring each of our brokers in a Q&A.

Meet Nelson Bayford:

How would you describe what a business broker does? 

A business broker guides the sellers through a process of establishing a “fair market value” for the business; connecting the business for sale to qualified buyers in a confidential manner; and facilitating a successful transaction between seller and buyer.

What’s been your favorite experience in the industry?

My favourite experience is having control over my income and time, allowing me to establish a good balance between work and personal life.

Who inspires you?

My grandchildren

What’s a defining moment in your life?

On August 31, 1971, I attended a Concept Therapy course, where I first recognized that “I become what I think about all day long” and that I have full control and choice over what thoughts I think.

What’s an important piece of advice you give to business owners?

Anticipate and prepare for the sale of your business with the thought in mind that the true value of your business is based on the profitability and the ROI for the buyer.

Do you have a favourite quote?

“Nothing should be prized more highly than the value of each day”

~ Goethe

What’s the best way for people to connect with you?

Telepathically? Ha! Ok then, by email.

Also find Nelson Bayford on FacebookTwitter and LinkedIn.

Business broker profile: John-Erik Grain

John-Erik Grain - Business Finders Canada

We want you to get to know us, as we get to know you.

Our professional business brokers help Business Finders Canada stand out from the crowd.

To highlight our team, we’re featuring each of our brokers in a Q&A.

Meet John-Erik Grain:

How would you describe what you do?

As a business broker, I guide buyers and sellers through the entire business transaction process. We co-ordinate everything from the business preparation phase, determining accurate business value, sourcing suitable buyers, negotiating terms and conditions, liaising with lawyers, accountants, landlords, and other consultants, ensuring deals close on time – all while maintaining the highest level of confidentiality.

Educating buyers and sellers is of utmost importance through the process so we are all on the same page and everyone knows what to expect each step of the way.

What’s been your favourite experience in the industry?

The buzz-feeling I get after a transaction closes is my favourite experience.

I know that all the work and after-hours time that we put into the deal is now allowing and inspiring the sellers to move on with the next chapter of their lives. It may include gassing up ‘the Winnie’ for trip down south or starting up another venture. Either way, we have helped people better their lives.

Who inspires you?

My grandmother. She has been to hell and back and she is still full of life and laughter at 96 years old. She and her family were chased out of Norway during the war, losing family members along the way. She ended up on Salt Spring Island with nothing, and she will still put a smile on your face with her contagious laugh, candid advice, and crushing hugs.

What’s a defining moment in your life?

Mangling my knee in an accident when I was young changed the course of my life and set me on a path of determination to overcome the odds. I still follow this path.

What’s an important piece of advice you give to business owners?

Be prepared for compromise during sale negotiations. There are several ways to sell a business. The buyer and the seller must work together so they each maximize the benefit and value.

Do you have a favourite quote?

“Do or do not, there is no try.” ~ Yoda

Is there a current listing you’d like to highlight?

I meet a lot of people who want to come to the Okanagan for the lifestyle. A perfect business for a budding entrepreneur in the Okanagan is a well-established cellphone retailer. It has a great reputation, located in a perfect location and seller financing is available. This is a perfect chance to become your own boss in one of the country’s most livable cities!

What’s the best way for people to connect with you?

Meeting up for a coffee and a chat after a phone call – 778-581-3456.

Find John-Erik on Facebook, Twitter and LinkedIn.

Never too early for an exit strategy

Never Too Early for an Exit Strategy

It’s never too early to plan your exit.

Starting with the end in mind is good strategy in chess – and in business.

For business owners, successful exit hinges on succession. But let’s put into perspective how uncommon it is to celebrate a graceful departure: About 80 per cent of the businesses on the market will not sell.

The most common reason is owners don’t realize the need to properly plan for the sale of their business.

Statistics Canada found many business owners are at the age where thoughts of retirement start to germinate. Those between the age of 50 and 64 make up about 50 per cent of those who own small and medium-sized businesses.

However, a survey by PwC Canada found only 18 per cent of Canadian family businesses have developed a comprehensive succession plan that has been both documented and communicated. That’s less than one-fifth.

Let’s look at the key considerations for an exit strategy.

Consider your options. Identifying how you’ll make your exit is a good first step that can have an impact on your preparations. Will you pass your business on to a successor? Will you transfer ownership through a management or employee buyout? Will you sell the business to a third-party?

Create a guidebook. It may sound like common sense, but to transition out of a business, it has to be able to operate without you. A business is much more desirable to a buyer when there are clear operating procedures. Develop an operations manual that outlines key procedures – day to day and month to month.

Get your house in order. You need to make sure all of your documents are up to date and well-packaged. That includes up to three years of accountant prepared financials, balance sheets and tax returns. Organize franchise or licensing agreements, employee contracts and leases.

Make an inventory. Often businesses are made up of many pieces. Know what those pieces are and what they’re worth. Some of those pieces are physical, like company vehicles, equipment, inventory and real estate. Some of those pieces are intangible, like customer lists and proprietary processes.

Turn to the experts. There are complicated issues involved in selling a business that are best handled by experts to avoid a damaging mistake – tax issues, employee rights, confidentiality and contracts to name a few. Tapping into the expertise of a professional and experienced business broker can save you a lot of grief.

Determine the value. Once you have a clear picture of your inventory and you have your documents well organized, it’s easier to determine the true value of your business. Again, turning to an expert can mean the difference between a successful sale at the right price and stagnating on the market or selling far below the true value.

Thinking through your exit strategy and taking clear steps toward succession – even when you’re more focused on growth than transition – is the best way to ensure you have a well-run and well-prepared business when it’s time to move on to your next journey.

For experienced advice, contact Business Finders Canada now at 1-888-377-8009.

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4 reasons confidentiality is key

Young Man Showing a Confidentiality Agreement Document - Four Reasons Why Confidentiality is Key

Keeping a secret isn’t easy.

In fact, Benjamin Franklin once mused: “Three may keep a secret, if two of them are dead.”

Still, secrecy is paramount when it comes to selling a business.

Confidentiality at all times – before, during and after – is the most important factor in the successful sale of an existing business.

Here’s why:

Fear spreads like the flu. Employees may get nervous if they learn that a business is for sale, especially those in key management roles. Valuable employees may decide it’s time to start looking for a new job, leaving you shorthanded when making sure your business is running smoothly is essential.

Relationships may suffer. Sound working relations with customers, suppliers, creditors and landlords are vital. Word of a potential sale could disrupt those relationships and weaken your competitive position – dragging down the value of your company and crippling the sale.

Loose lips sink ships. That phrase was one of the most successful marketing campaigns of the Second World War. People were encouraged to avoid careless talk to help ensure enemy agents didn’t find out shipping routes or other vital information that could put people in harm’s way. The idiom applies here, too. Being flippant with information to non-vetted potential buyers could compromise trade secrets and sensitive financial information.

That’s how rumours start. Business can be cutthroat, especially in highly competitive markets. If word gets out that you’re selling, competitors may use that information to attack your reputation, spread negative stories and steal your customers. Your competitors may also start to market more aggressively to take advantage of the sale.

How do you keep the sale confidential?

Hiring a professional business broker is an important first step to protecting confidentiality. If you want to sell your business yourself, confidentiality is lost.

Business Finders Canada has all potential buyers sign a non-disclosure agreement.

We do not disclose information without your permission. In most cases, we don’t list publicly on MLS for everyone to find.

Instead, we keep a confidential directory of qualified buyers who are actively looking for a business to purchase.

With the proper procedures, it is possible to minimize the risk of an untimely disclosure.

For experienced advice, contact Business Finders Canada now at 1-888-377-8009.

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