ABC BUSINESS

WELCOME

Steve Smith AREINZ
Managing Director

Why You Should Buy A Business in 2009

Over the past few years, we have seen relatively low unemployment, relatively high petrol prices, interest rates going up, and increasing business compliance costs. Some of these issues have made it difficult for people to move from the comfort of salaried employment into business ownership.

The right reason to buy a business is of course to create wealth and many successful people have secured their futures by running their own businesses. And things are changing - jobs are less secure now with redundancies being announced nearly every day and interest rates and petrol prices have dropped. Owning your own business is more attractive than ever.

There are of course no guarantees and it is important to get good advice. A few pointers to avoid mistakes;

Buy for the long term – people are talking down the economy, but New Zealanders love to spend and the economy will turn for the better.
Look for businesses with recurring revenue or with a strong client base ie an established business.
You are buying next year’s income – past performance is only a guide. Research the industry, the market, and the location - try to determine the future.
Look for genuine reasons for sale by the vendor – buying an underperforming business is ok if you have the experience to turn it around. Price isn’t everything if there is no future.
Use a business broker or similar professional well versed in business sales. There could be many non-financial or other factors that may affect the value of a business.
Buy the right business – one that suits you and that you will enjoy running. One that can be easily financed and still meets your goals.
Have enough capital – it may take longer than you think to get fully established and up to speed.

Buying the right business will be both rewarding and also help to build the sort of wealth that may not be possible as an employee in an average job.

Regards,

Steve Smith AREINZ
MANAGING DIRECTOR

MANUFACTURER / CABINETMAKER

Location

Mt Wellington

AUCKLAND

Overview

This business offers a complete kitchen design, manufacture and installation package. The range is comprehensive both in custom made product and the growing domestic and commercial modular market. The factory is modern with excellent machinery including C.N.C. systems and qualified staff. The factory is well laid out and efficient. Recognised as a leader in quality products, this business could expand in various directions from current products to kitsets and other cabinetry products made for other clients in the DIY market.

The business has recently been invited to join an exclusive supply and marketing company, becoming one of thirteen licensees nationwide. This is an extremely exciting initiative that will see benefits with regards to purchasing power, brand marketing and economies of scale.

The premises are owned by the Vendors who will offer a new lease to the purchasers. These premises are well lit and spacious (approximately 8500 sq ft) with a core office and show room block and the layout is designed in such a way as to promote an excellent work flow pattern.

Presentation, quality and performance have produced a large supportive client base. A high percentage of the business is from referrals (approx 75%) as well as repeat commercial clients.

The sale includes two sign written vehicles and a fork hoist.

Staff

There is a total of six staff - four tradesman cabinetmakers and two in the office. Both directors work full time, one in administration, data entry, and sales, the other in design and management. Sub contractors are used for installation as required .

Profits

The accounts show the owners' cash surplus for 2007/2008 of $332,268.00 and they are on track to do similar numbers this year.

Summary

This is an excellent business that is well run and structured with a quality identity and established name. It is ready for a new owner with motivation and drive to embrace the new licence initiative and to build on the current business.

The Vendors are prepared to offer long term assistance and to act as a sales representative on commission only if required.

Priced to sell

Tangible Assets 150,000.00

Intangible Assets 250,000.00

Stock (approx) 50,000.00

$450,000.00

Contact Graeme Moore 09 630 1600 , 021 906 482

Ref: 21220

Click here to learn more

Assistance For SME's (Small to Medium Enterprises)

Richie Lowe AREINZ

It is great to see the new government recognising the importance to the economy of SME’s. Nearly 97% of business enterprises in NZ fall into this category (Stats NZ) and in early February the government announced a number of initiatives to assist this vital sector. Finance Minister, Bill English, says small and medium sized businesses will benefit from a series of new tax assistance packages worth $480 million over 4 years. The changes are aimed at easing the burden of tax on cash flow for smaller businesses and making it easier and less expensive – in terms of both time and money – for them to pay taxes.

On the same day, Economic Minister, Gerry Brownlie, announced further help for SME’s. Businesses are able to call for help and advice when times get tough, and few NZ firms have had to operate in such difficult economic conditions as those we are currently facing. As a consequence many do not know where to go for help and these new government initiatives provide a valuable resource for those in need. Some of the new services are;

An enhanced 0800 helpline giving free and immediate advice to businesses (0800 424946)
A free health check available online www.bizhealth.co.nz
Free seminars on managing in an economic downturn www.business.govt.nz

The advice can extend from dealing with cash flow, to management strategies; the best way of trading through an economic downturn and how to maximize the advantages from the range of other government initiatives.

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