Make the Most of Selling by David Bentley

Profit is always “king” whenever a buyer is assessing a business. Naturally, the bigger the profit, the higher the price paid for the business, regardless of what industry category it might fall under.

The market for businesses on changed markedly within the last year. Twelve months ago, most banks were displaying little interest in providing finance for a business purchase and the ANZ stood alone in their desire to nurture this aspect of their activities.  Fortunately, this has now changed for the better. As business brokers, we now have most of the major and some of the smaller banks approaching us for business referrals, something unheard of twelve months ago.

So what has changed? The level of buyer interest has increased noticeably in the previous few months, as has the quality of the buyers themselves; now, they are ready to purchase if they find the right business. The high degree of scepticism that was rampant a year ago is no longer present, as buyers realise that the sky didn’t fall in. Additionally, the intense negativity about the world economy, driven predominantly by the media, hasn’t brought the recession so many people were predicting a year ago. The Australian economy is a lot more robust than many thought possible and the mining sector has insulated us from the big downturns in other economies.

Here on, we are noticing an increase in construction, particularly in the commercial area. Take a drive along Maroochy Boulevard near you’ll witness a hive of activity which shows no sign of letting up. In Noosa, the huge new Bunning’s complex is well underway and construction on the new Sunshine Coastprivate hospital commences in 2012. Both of these projects alone have had significant positive effects on local business and employment.

Verified Businesses is selling two metal fabricating businesses, each showing a significant increase in both turnover and profitability in the previous year, mostly through supplying the commercial building sector of that industry. Any business which has not only survived the last three years, but has also shown a healthy increase, is a solid business capable of withstanding the trials of a mild recession. Risk factors in purchasing such a business are significantly lower as a result and it is the wise buyer who is prepared to pay more for the certainty of healthy profits.

The key therefore to purchasing a business in uncertain times is to ensure that profit remains the king, while taking a long, hard look at the community in which it sits. In a climate of less nervous bankers, and in the case of our own community, it makes for a brighter looking future for the Sunshine Coast and for business in general.

By David Bentley