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Accountants or business broker – who prepares the better small business valuations?

Posted on 27, January 2015

in Category blog

There is a natural tension between accountants and business brokers when it comes to small business valuations. The accountants correctly argue that they have strong technical skills whereas the business brokers say (also correctly) that they are across what is actually happening in small business sales – so which is better? I am encouraged that both Chartered Accountants and Australian Institute of Business Brokers (AIBB) have recognised the special skills and experience required to professionally value businesses and introduced courses, accreditation and professional standards. The Chartered Accountants have the CA Business Valuation Specialisation and AIBB have Registered Business Valuers. For

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THE STATE OF THE SMALL BUSINESS SALES MARKET

Posted on 7, April 2014

in Category blog

The Australian Institute of Business Brokers is the peak industry body representing professional business brokers involved in the sale of businesses across Australia. It surveyed its members regarding the market conditions for selling smaller businesses. Number of qualified buyers – Coming out of the shadows The number of qualified buyers is starting to see an uptick with 65% of brokers seeing more qualified buyer interest compared to 27% in the September quarter. It appears that buyers who were lagging the market improvement in the September quarter are emerging. Only 15% of brokers saw a decline in qualified buyer interest, a

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WHAT’S HOT IN THE WORLD OF FAMILY BUSINESS?

Posted on 7, April 2014

in Category blog

Information about what’s going on in the world of family business keeps growing. Two Australian surveys have recently been released, the MGI/RMIT Australian Family and Private Business Survey and the KPMG/FBA Family Business Survey 2013 conducted by Adelaide University. The surveys are independent and address different aspects of family business, in turn, reviewing the results in tandem lead to some interesting insights. The top three issues identified in the KPMG/FBA study are:   1.  Balancing family and business issues Maintaining family control of the business Preparing and training successors These issues are consistent with two of MGI’s top three: Lack

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THE FOUR KEY DRIVERS OF THE VALUE OF YOUR BUSINESS

Posted on 7, April 2014

in Category blog

Whilst there are a number of different ways of valuing a business, such as capitalisation of earnings and discounted cashflow, there are four key drivers of business value: Earnings – Ultimately every business owner is looking to generate earnings from the holding and eventual disposal of any business Growth – The higher the realistic growth potential for a business, the more an acquirer would be willing to pay for the business Risk – The minimum rate of return an acquirer seeks on a particular business is influenced by the level of risk in the business – the higher the risk,

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2014 STARTS STRONGLY

Posted on 7, April 2014

in Category blog

The inertia that seems to have been a dominant factor in the psyche of Australian business since the GFC and especially during the world’s longest election year in 2013, finally seems to have lifted. We have seen a strong uptick in both buyer and seller activity in the smaller business space. It is far too early to call it a stampede (and we don’t think it will get to that level any time soon), however we believe action should be taken should you be buying or selling or at least be in a position to take advantage of an opportunity

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Endeavour Business Broker’s Newsletter – Spring 2013

Posted on 16, October 2013

in Category blog

It’s Spring – Time for businesses to come out of hibernation! – The Accountants role in Exit Planning – How much is my business worth? – How sellable is your business? – The Toolkit – SOWOT – Selected current opportunities – About us To view the Endeavour Business Broker’s Newsletter in PDF form, click here

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Apportioning The Sale Price

Posted on 24, July 2013

in Category blog

From a taxation perspective, the vendor and purchaser usually have different objectives in allocating the sale price of a business. The vendor wants to maximize the portion of the purchase price that is subject to concessional taxation arrangements such as goodwill and to minimise the allocation to inventory, depreciable assets and other non concessional Capital Gains Tax assets. However, the purchaser wants to maximize the allocation of the purchase price in assets on which it can gain a tax deduction, such as inventory and depreciable assets. It may be in both their interests that the consideration not be allocated in

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Buying A Business – Typical List Of Documents Required By A Bank

Posted on 24, July 2013

in Category blog

If you are seeking to fund the purchase of a business with finance provided by a bank, what information should you provide the bank (or your finance broker) to increase the chance of a successful application. The current lending environment is patchy with only the best loan applications being successful.  Make sure you give your application the best chance of success by showing the bank that you know the business you wish to buy and that you have the experience to run the business profitably. You may want to work with a mortgage or finance broker to assist you in

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Business Plan For The Purchase Of Business

Posted on 24, July 2013

in Category blog

If you are planning to buy a business, Endeavour Business Brokers recommends that you prepare a plan on how you will operate the business.  As this business plan will also assist you in getting funding from a bank, you should spend the time to ensure that it is a well thought through document.   We also suggest that you have a trusted adviser, such as your accountant, review that plan for its merits and any weaknesses.  It is important to make sure that this person is willing to give you honest, constructive and sometimes negative feedback on the plan.  

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The Four Factors That Determine How Long It Takes To Sell A Business

Posted on 24, July 2013

in Category blog

Unless you have a crystal ball, it’s impossible to really predict when a particular business may sell.  It all depends, of course, on when you locate and convert a buyer! Recently I conducted a survey on behalf of the Australian Institute of Business Brokers about the length of time it took to sell a small business from the time it went on the market to time of sale.  The majority of people I share these results with are quite surprised; it takes longer on average than they expect. Time Period % of Businesses sold Under 1 month 7.4% 2 to

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