BUSINESS FINDERS CANADA BLOG

What kind of business should I buy?

Buying a business is one of the most important decisions you’ll ever make – and one not to be rushed into.

There are a number of options open to you.

It’s important you do your research to make sure you’re buying the right type of business for you and that you pay the right price for it. A professional business broker is a great resource to help throughout the process.

Buying an existing business may be better for you than starting from scratch. The main reasons are it can take you twice as long and it can cost twice as much to start a band new business.

Some of the benefits of buying an existing business include:

• Immediate sales – As soon as the deal closes, you could be generating income from the first day, if customers are invoiced.

• Easier to get credit – Banks are more comfortable lending to existing businesses.

• Staff and systems – It can take many months to find and train employees and set up processes to operate a business.

Once you’ve established that buying a business is the right road for you, it’s time to decide what kind of business is right for you: a franchise or an independent business.

There are pros and cons to both.

Franchise

Generally, franchises have a proven concept. They are established businesses that have grown successful enough to require more locations. That also means they have an existing customer base that’s familiar with the brand.

Franchises often come with help for setup and training. The parent company already has things like equipment, uniforms and advertising in place, saving time and money developing your own.

On the negative side, there are rules and regulations to follow, so you won’t have total autonomy. You’ll also have to pay a percentage of the revenues to the parent company.

Independent business

With a traditional business, you’ll have much more control over rules and processes. There are no fees to pay and the revenues will stay with you.

You set the direction of the business, which means that you can be more flexible in taking advantage of opportunities that open up in the market.

However, the risk can be greater, too. The fate of the business rests entirely on your shoulders.

When it comes to deciding what type of business is best for you, it’s important to evaluate your own background and characteristics.

Ask yourself what kind of risk you’re comfortable with, what industry your skillset best lends itself to, how well you can manage people.

At Business Finders Canada, we’ve developed a proprietary buyer profile that will give you a greater chance at success. Contact us for professional and experienced help.

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

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Online: Canada Business Network

Photo: Rich Brooks/Flickr

Living in the digital revolution – Part 2

We’re living in a digital revolution.

Why not take advantage of the shift and pursue the potential cost savings and increase in profit that can come with digitization? After all, there’s no escaping the new industrial revolution, says the Business Development Bank of Canada.

Previously, we covered how the past three industrial revolutions changed the way business was done throughout the world.

Today, the message from the federal bank is clear: adopt or suffer.

“Our study indicates adopters of digital technology tend to forecast a much brighter future than non-adopters do,” says BDC. “Indeed, digital adopters in our survey were almost twice as likely as non-adopters to predict annual revenue growth of 10 per cent or more over the next three years…

“Digital transformation gives manufacturers a new lease on life.”

Accepting and adapting to changes in the marketplace adds value to your business when you decide to sell. Potential for growth is one of the things we encourage our interested buyers to look for in their investment.

The first step to capitalizing on digitization is soul searching.

Think about what your customers really want. These days, there is a big demand for products that allow people to be more efficient and enjoy their lives more fully – products that bring inherent value.

Once you have a grasp of what your customers need, think about how to harness digital technology in a way that increases the value of your business, like enhancing the delivery experience, making your products more accessible or increasing your company’s digital reach.

People are willing to pay a premium for those assets, says BDC.

Planning is the next step. Be strategic when mapping out the way technology – such as social media, cellphone apps or improvements to your systems – can make you more competitive.

Plan out long-term impacts, too. Do employees need more training? Will you have to hire more staff? What is your yearly budget for improvements?

Current employees should be empowered and well trained to embrace the changes and thrive. New employees should have the necessary digital skills or have a proven ability to adapt.

“It’s critical to find and retain talented employees, especially in the digital age. As our survey shows, access to skilled employees is the main challenge facing technology adopters.”

Expect some resistance internally. Keeping employees involved from the start and stressing why it’s important to the success of the company can limit fear and increase understanding.

At first, changes may be overwhelming, but adapting over time through small projects has been a strategy used successfully by some businesses.

“An early win on a pilot project will help demonstrate the value of digitization to you and your team,” says BDC.

“If you’ve so far made only limited investments in technology, start with a small pilot project.”

As we’ve seen from past industrial revolutions, failure to adapt can stunt growth – and in worst cases, force closure.

It’s a competitive world. If you haven’t started yet, what are you waiting for?

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

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Join the new industrial revolution: Part 1

Did you know we’re living in the fourth Industrial Revolution?

Industry 4.0, as it’s been dubbed, has been forcing profound changes on businesses around the world.

To get a sense of how much industrial revolutions have changed the business landscape, let’s look at the first three.

The first Industrial Revolution started in 1780 and over the following decades modernized the manufacturing process through major technological innovations, including steam engines and machine tools. The advances altered almost every aspect of daily life at the time and raised the standard of living across the board.

The Technological Revolution came next in the late 19th Century. Large-scale production of iron and steel led to railroads and the spread of goods. Hydroelectricity powered manufacturing plants, allowing mass production to spread.

It culminated in the third revolution: Globalization. Starting in the 1970s, an automated manufacturing process and an increasingly connected world again reshaped business and forced companies to adapt.

That brings us to today and the fourth revolution. Digitization is emerging and small and medium-sized businesses have an opportunity to ride the wave of opportunity that it brings.

“Industry 4.0 refers to the use of digital technologies to make manufacturing more agile, flexible and responsive to customers,” says the Business Development Bank of Canada, a federal authority on business. “It allows manufacturers to improve their efficiency, create more personalized products and react more quickly to customer needs than ever before.”

BDC has four best practices on how to take advantage of the digital revolution.

  1. Focus on customer needs: Understand your customers’ true motivations for buying from you
  2. Be strategic: Identify the technologies required to meet your customers’ needs. Evaluate the digital maturity of your business, and plan changes accordingly.
  3. Empower your employees: Share your vision, involve your employees in the process and offer adequate training.
  4. Walk before you run: Start with a small pilot project that will allow you to learn and help prepare you for a larger implementation.

Are other businesses embracing change?

“While Canada is off to a good start, only three per cent of Canadian entrepreneurs have fully implemented Industry 4.0 into their business at a time when competitors in the U.S., Europe and Asia are moving full steam ahead,” says BDC.

BDC says the revolution is a chance for businesses to boost productivity, reduce operating costs and improve overall quality.

We see it as a chance to increase the value of your business or a business you buy.

We’ll get more in depth on how to harness the opportunities of Industry 4.0 in Part 2.

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

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Make your business worth top dollar

If your business can’t run without you, you’re not in the best position to sell.

When your business runs flawlessly without your involvement, its value increases and you’ll have an easier time finding a buyer.

Autonomy is just one of a number of factors that will determine whether your business will sell – and its value.

Getting top dollar for your business starts with a thorough plan.

About 80 per cent of the businesses on the market will not sell. That eye-opening figure is mainly due to owners not planning ahead to sell their business. On the flip-side, if you prepare your business for sale, you have an excellent chance to sell and to increase your profit along the way.

Exit strategies are something every investor wants to see in place. Even if you’re running a one-person sole proprietorship, you need and exit strategy. Some of the factors to consider are your timeline, market conditions, management structure and the type of strategy – such as succession or buyout.

Also before putting your business on the market, get your paperwork in order.

Undertake a thorough review of the company books and ensure that everything is complete and up to date. Be certain all tax returns, government filings and licences are in order.

According to the Sellability Score, here are the eight factors that will determine the value of your business. They are:

1. Financial Performance: The size of your revenue along with your past and expected profitability

2. Growth Potential: Acquirers typically pay the most for businesses with the potential to grow

3. The Switzerland Structure: A business’ sellability requires that the business not be overly reliant on any one customer, employee, or supplier

4. The Valuation Teeter-Totter: Reflects the impact your cash flow, gross margin, and profitability have on the value of your company

5. The Hierarchy of Recurring Revenue: Extent to which an acquirer can see where your sales will come from in the future

6. The Monopoly Control: An enduring competitive advantage gives an owner more control over pricing, increasing profitability, and cash flow

7. Customer Satisfaction: Measures both the extent to which your customers are satisfied and your ability to assess customer satisfaction in a consistent and rigorous way

8. Hub & Spoke: Measures the extent to which your business can thrive without you

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

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What is a business broker?

Selling and buying a business is complicated.

If you don’t have a guide, you’re apt to get lost. Think of a business broker as a tour guide, navigating buyers and sellers through a complicated landscape.

A business broker is a real estate agent, but specializes in selling existing businesses and franchises.

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.

For sellers who have poured their life into the business, selling can be a delicate matter that can have an impact on employees, creditors and suppliers.

Confidentiality is key in protecting company assets, credit and marketability.

Business Finders Canada provides confidential services to business owners and business buyers. In fact, we keep a directory of pre-qualified buyers who are actively looking and have signed a confidentiality agreement.

A business broker can help with every aspect of sale, from pricing your business to marketing to the right buyer.

A business broker can also act as an intermediary between a seller and buyer.

Our brokers have in inside track into listings you couldn’t discover on your own.

They act as matchmaker, bringing sellers and buyers together, then closing deals efficiently and to the satisfaction of both buyers and sellers.

When selling your business, your focus should stay on keeping it running smoothly. You can feel confident leaving the marketing and negotiating to an experienced business broker.

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

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Myths held for millennials

Millennials have received more than their fair share of bad press.

That has apparently caused some business owners to wonder how millennials may fare in their workplace compared to other generations.

However, a recent poll by Insights West has debunked five commonly held beliefs about millennial-age workers. It found:

Myth: Millennials are unhappy and frustrated with their current employment situation.

Insights West says its poll of 2,040 Vancouver employees found millennials are “significantly more satisfied and more likely to recommend their current employer than Generation X.”

Myth: Millennials are more concerned about vacation time and work life balance.

Vacation time and flexibility of work hours are equally as important to all generations, including millennials – who range in age from 18 to 35 years old.

Myth: Millennials are frustrated with their future career opportunities and the level of autonomy in the workplace.

The polling company says that millennials are more satisfied with their opportunities for advancement and their freedom to make decisions, compared to Generation X.

Myth: Millennials feel they are entitled to higher pay.

Millennials are equally as likely to think they deserve to get paid more, according to the poll that was part of a larger Dream Employer study.

Myth: Millennials are more inclined to participate in charitable activities.

“Millennials are equally as likely to get involved in charitable activities at work,” says Insights West.

How well a workplace functions on its own is a key factor in determining the value when you sell. An experienced business broker can help you determine the value of your business and help you prepare for sale.

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

Good idea, bad idea

When you’re selling or buying a business, there are good ideas and bad ideas.

Bad idea: Buying a business on a whim.

Good idea: Knowing exactly what you’re looking for. Buying a business may be the most important decision you’ll ever make. It’s a decision that will have a long-term impact on your lifestyle and your finances. Don’t be one of the people who buys a business that turns out to be wrong for them.

Bad idea: Selling your business without expert advice.

Good idea: Contacting an experienced business broker. Business Finders Canada has helped thousands of people throughout Western Canada buy and sell businesses.

Bad idea: Thinking the right buyer will just come along.

Good idea: Tapping into a stream of buyers. Business Finders Canada has a network of buyers who are financially approved and motivated to purchase the right business. We’re like real estate agents, but specialize in business and franchise opportunities. Matchmakers, in a sense.

Bad idea: Not having your business running in tip-top shape.

Good idea: Have a succession plan in place. When your business is running smoothly, the sale and transition will take less time and less money. An experienced business broker can help.

Bad idea: Letting everyone know you’re selling.

Good idea: Using a confidential business broker. Employees may get nervous if they learn that a business is for sale. Suppliers and creditors may also want to stop doing business with you if word gets out that you are selling.

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

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Zoned Space for Lease – I-2 Zoned…$14/sqft

THREE  floors of space available FOR LEASE  2240 Leckie Road in the heart of Kelowna.  1000, 2000  and 4000 sq. ft. units are available with asking net rent of $14.00 per sq. ft.  Landlord inducements may be available also. Fully improved office space with plenty of natural light. Take one, two or all three floors.

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