ABC BUSINESS

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Now is the Time to Sell

With the shortest day now behind us its downhill all the way into summer. Pretty soon we'll be packing away the woolies and looking forward to warm summer evenings, having a barbeque, sipping long cool drinks and generally relaxing and enjoying the good family life. What a lovely thought? If only you didn’t have the worry of running a business.

Now is the right time to consider selling your business. Not in the height of summer, when you are trying to have that cool drink, while doing the barbecue or generally trying to relax. By then it is too late. The motivation will be there but it could mean another full year and another cold winter of running the business until its sold.

It can take anywhere from 2 to 6 months to sell a business from appraisal time. In 6 months it’s summer, so now is the time to sell. Your accountant should have your financial statements finalised by now and a more accurate appraisal of your business can be undertaken.

Don’t hesitate to call either Steve Smith or Richie Lowe for a friendly discussion on your business and the right timing for a sale.

Regards,

Steve Smith AREINZ
MANAGING DIRECTOR

IMPORT DISTRIBUTION

TURNOVER $2 million - 51% G/P

This business was established as a manufacturer / importer / distributor in 1985 to supply apparel and associated products to a wide variety of commercial and retail markets. As with most industries, promotional and uniform apparel is a price/quality dependent product and the success of this business over the years is a testament to the company’s ability to deliver on all counts.

The business offers the following product categories:

• Promotional

• Sportswear

• Uniforms

• Casual Wear

• Custom “Buy NZ Made” Product

Strengths of The Business

Strong brand. The business has always aimed at the middle to upper end of the market and their products reflect the quality needed to maintain sales in this area.

In-House Product: They have their own styles so are able to produce product branded specifically for individual customers.

Documented Operating Systems: The importing, sales, manufacturing and distribution processes are all fully documented..

Suppliers: Established strong relationships with reliable, long term suppliers from whom it receives good support.

Selling at stock value only

TOTAL PRICE: $1,200,000.00

Peter Nola 09 630 1600, 021 507 313

Ref: 20837

Click here to learn more.

PERSONAL GOODWILL

Richie Lowe AREINZ

This impacts on the sale of many small to medium sized businesses, and possibly even some larger businesses. An individual starts a business and builds a positive personal relationship with many of his customers or maybe the creator of the business product. If you have been dealing with a professional, say, a doctor, dentist or other professional advisor for many many years and he decides to retire, it can be like losing a family member. These personal service providers have built their personal goodwill over many years.

These relationships are wonderful attributes, but unfortunately may not be transferable. There is a saying that in businesses built around personal goodwill, “the goodwill goes home at night”.

It can be very difficult to sell a business, regardless of size, where personal goodwill is an integral part of its business. In small to medium sized businesses, it can be a crucial ingredient and a buyer most certainly will have to take this into consideration when buying.

When a business changes hands and the customer/client doesn’t like the new owner, for whatever reason, then the customer/client will go elsewhere. The new owner might be just as competent, or even more so, but the chemistry isn’t there, and business can be lost.

Businesses which have a high content of personal goodwill can certainly be sold and its important that plans are made so that the maximum sale value can be achieved. A simple method is for the seller to stay for a longer period and slowly transfer the goodwill. Early planning for exiting your business, and over time reducing the personal goodwill component, would assist in achieving a greater value for that business. Begin planning now.

Richie Lowe is General Manager of Affiliated Business Consultants Ltd (ABC) and Chairman of the Business Brokers Division of the Real Estate Institute of New Zealand.