Selling a business is a bit like selling your home. You want to get the best price possible, with the least amount of effort and at the lowest cost to you. What you do need to be clear on are the reasons you want to sell, plus be 100% certain that a sale is the best option for you.

As accountants and business advisors, we regularly play a role in helping clients sell a business. We believe it is important to consult with professionals such as ourselves because selling a business is a specialist area. To demonstrate this, we are sharing some of the processes and knowledge required to achieve a successful, legal and profitable business sale.

What Are Your Reasons for Selling a Business?

There is most likely a lot of your blood, sweat and tears which have gone into your business. There is probably also a large amount of pride and emotional connections associated with it too. So, chances are that you have thought long and hard about whether or not selling your business is the right move for you.

The decision you have come to would have been based on one or more reasons, such as:

  • you are ready to retire
  • you don’t enjoy owning a business any more
  • there are health problems which are affecting your ability to manage your business
  • it is time for a change and you want to do something else
  • you want to release your equity locked within the business
  • there’s a financial downturn and you want to get out now
  • a partnership dispute is causing problems

It is always best though, to ensure that the one or more reasons for selling absolutely require the business to be sold by having a chat with us. For instance, a financial downturn can be beneficial for a business which can pivot and reach a new market. Or employees can be hired to assist when health problems force the owner to step back. If you are 100% clear about your decision, it’s time to move onto the next stage: collating all your paperwork!

Organising Your Paperwork When Selling a Business

It would be a fair assumption that one of the first things an owner considers when deciding to sell their business is what the purchase price should be. However, like with selling of anything, the purchase price cannot simply be plucked out of thin air. Instead it relies on having a solid understanding of and updated knowledge about the business first. This requires you to get all your paperwork in order, including:

  • up to date financial records for current and previous tax years, including profit and lost statements, personal drawings, balance sheets, and employee costs
  • list of assets
  • current business plan
  • supplier contracts are current
  • details about all leases
  • any debts the business has are paid in full or have a plan to be paid prior to the sale
  • any legal issues are resolved
  • all regulations and requirements are complete, including health and safety planning
  • full documentation of all business processes

Finally, you will need to prepare an information memorandum for potential buyers which include all the above items. It should also contain specific details about business growth opportunities and other pertinent information not included elsewhere.

If all of this sounds too challenging or you don’t have time or want to do it, we can help. Get in touch with us today and we can start planning the sale of your business. Next though, we’ll cover how to get a valuation for your business.

How Much is Your Business Worth?

Even if you chose to take the DIY option when selling your business, it is highly recommended that you have it valued professionally. After all, a business valuation completed incorrectly can cost you plenty of money!

When it comes to valuing a New Zealand business, there are three main methods:

  • asset valuation – when you calculate the total sum of assets on your balance sheet
  • market approach – the amount of earning potential your business has which is based upon the theoretical market demand
  • income valuation – projecting the future cashflows of your business

You’ll often find that there is a valuation calculation used too, known as EBITDA. EBITDA stands for Earnings Before Interest, Taxes, Depreciation and Amortisation. Generally, it is used to identify a business’ operating profit, but can be unreliable when a business is close to break-even.

Now we need to have a chat about price and value. We can help you identify the value of your business, which is taking into consideration the EBITDA, to know how much to ask for your business. However, the price of your business is the amount someone is willing to pay to buy it. Like with calculating its value, there are factors which can affect the price of your business, including:

  • physical presentation of your business
  • current economic climate
  • lifestyle the business provides
  • a comprehensive operating manual ready for an easy takeover
  • condition of fixed assets
  • existing restraints of trade
  • business name and trademarking
  • additional clauses in the sale and purchase agreements

Once you have finished the valuation of your business, it’s time to start looking for a buyer and we’re going to share some tips on doing this with you next.

Where to Find a Buyer When Selling a Business

When selling a property, most people use a real estate agent to help them find a buyer. When selling a business though, you’ve got a few other options up your sleeve. These include:

  • hiring a business broker – a business broker helps connect buyers and sellers, and they usually have an area of expertise. A broker is likely to have a database of buyers, as well as have a solid understanding of how to attract other potential buyers to consider purchasing your business. A broker can help you with the valuing and marketing of your business and expects a commission upon completion of the sale.
  • talking with employees – you may have a current employee who is interested in purchasing the business from you. Already knowing how the business is run is a huge bonus for them, and with some help from you, they may be willing to take the next step.
  • approaching your competitors – instead of having to compete with you, your competitors could buy your business out instead!
  • customers – do you have some raving fans of your business? They may be ready to purchase and run the business themselves.
  • advertising – put ads on social media, radio and even print media asking for interested parties to get in touch.

With interest from buyers comes negotiations and contracts. This is another area where professional expertise is recommended. From business advisors to lawyers, it is best to have everything completed by those who know what they are doing. Yes, they will charge you for their services, but the financial price you can end up paying for mistakes at this time can be far greater.

We’d like to offer you our experience and knowledge as professional accountants and business advisors when selling your business. We can walk you through the process, ensuring you receive the best possible price with the lowest possible amount of stress and costs. Get in touch with the team here at MBP Advisors and Accountants today and let’s meet up for a chat.

Your “war chest” is the financial reserve your business has built up so you can take advantage of an opportunity or cover unexpected costs or emergencies. Building a cash reserve when finances are tight, however, can be difficult. You need money to continue running your business but, if at all possible, you want to keep your reserve account healthy.

Here are some ways to build (or preserve) a cash war chest during a crisis.

Shift all Extra Money to Your Cash Reserve

Some of your costs stay the same during a pandemic, but other expenditures are no longer necessary. You may have had money allocated for business travel or networking events that will not happen. Discretionary money for entertainment or hiring may now be freed up. Take some of that money (or all of it, if possible) and add it to your cash reserves.

Preserve Cash Where Possible

Go through your expenses and see what you can reduce. Are there ways for you to cut costs so additional money can be put into the cash reserves? Are there services you pay for that you don’t need to right now? Are there software subscriptions you don’t use?

Variable costs are often the quickest areas to save money.

Make laying people off the last resort, if at all possible. For some businesses, employees have to be let go but remember that at some point you’ll need to have your business operational again and for that to happen, you need employees.

Take Advantage of Assistance Programs

Government assistance programs are there to help you during this crisis. Pay attention to any loan repayment terms and don’t sign up for anything your business can’t afford to pay back, but if there are programs you’re eligble for, use them.

It’s not just the government offering assistance, either. Financial institutions, large corporations and loan providers are all looking at ways to support small businesses and prevent entrepreneurs from closing up shop. Do some research to see which of those you’re eligible for and apply.

Use that money to cover your expenses, and use any freed up money to build up your reserves.

Make Alternative Arrangements with Suppliers

You may be able to push back payments to your suppliers. Talk to your suppliers to find out if there are ways to extend your payment deadlines without damaging your relationship with them. See if there are arrangements that save you money without costing them a lot. Even slightly extended payment terms can help you with your cash flow so you don’t have to dip into your war chest.

Final Thoughts

When you’re trying to keep your business alive, putting money in the cash war chest might not be high on your priority list. Even if you can’t put money into the reserve, do your best to avoid taking money out of it unless absolutely necessary. If you do have to dip into it, try to pay that money back as quickly as you can.

Find ways to reduce expenses (especially variable expenses) and even bring some money in if you can. There are some things you can do to save yourself some money and live to fight another day.

If you’re worried about cashflow, please get in touch with us.

If you’re considering a business rebranding, you’re likely to have multiple reasons as to why you are likely to take this path. Whatever your reasons, business rebranding isn’t something that just happens overnight and requires identifying the specific reasons why a rebrand is necessary. Some of the main reasons business owners move to rebrand include:

  • repositioning their business to target a new audience or be more appealing to an existing audience
  • branching out to a wider international-based audience
  • updating an old outdated image
  • moving away from a bad reputation
  • a merger with a new company or having new directors join the business
  • making your business stand out from other similar ones

Once you have decided to rebrand, you’ll need to decide upon a rebranding strategy. From here, you’ll need to follow the steps necessary to make the transition from old to the new brand. We’ll cover both points in this article.

Choosing Your Business Rebranding Strategy

You’ve decided to move forward and begin rebranding. To begin this journey, you first need to decide on your rebranding strategy.

  • partial rebrand – more like a subtle image change, a partial rebrand is mostly a visual change to meet the needs of your business and target audience.
  • full brand – a complete reworking of your brand, from the values and mission statement, the products or services you offer and the way the brand looks.

You can involve your target market in this decision. Ask them what they like and don’t like about the brand as it is today. Having an understanding of what they think is incredibly useful!

Of course, the option you end up choosing will depend upon the main reasons you want to rebrand. Once you’ve made your choice, next comes the rebranding steps themselves.

Steps When Undertaking a Business Rebranding

There are five key steps we’re going to individually walk you through when it comes to rebranding your business. They are similar to what you would do when establishing a new brand, which in essence is what a rebrand involves:

Identifying your brand’s target market and audience.

You’ll need to re-establish exactly who your target audience is and where they hang out. Undertaking surveys, observations, competitor analysis and simply identifying who is buying from you will give you the information needed to do this. Nail out your new buyer persona, which includes details such as their age, income, location, likes and dislikes. This information will help you when creating content for your website and social media platforms.

Defining what your business’ mission, values and vision are.

Here you’ll redefine exactly what your business stands for. Why do you do what you do? How will you do it? What are the reasons behind the way you do things? Included in this section is your brand voice. This includes the words you’ll use, along with your tone of voice.

Choosing a new name for your business.

One of the hardest things people find to do is naming a business. You likely spent a considerable amount of time choosing your original name and now need a new one. When brainstorming a new business name, think about making up a new word, changing the spelling of an existing word, using an acronym, combining words or stating what you do. Make sure to check your business name using OneCheck for existing trademarks, domains and social media accounts too.

Coming up with a new slogan for your brand.

A slogan is a catchy little phrase associated with your business. If your old slogan still fits, then keep it. If not, brainstorm ideas for a new one. Think about making a claim, providing instructions, being metaphorical and including compliments within your slogan.

Building your brand’s identity from bottom up.

Here we are talking about your brand’s visual identity. Your logo, colour palette, fonts and imagery are all things to consider. Using the services of a graphic designer here will pay dividends, as they will be able to use all of the information you gathered in steps 1-4 and transform it into a brand guide for your business.

It is often this step which business owners find the easiest out of the entire rebranding process. You have learnt about what worked and what didn’t with your old logo and colours, and usually have a clearer idea of what you do want. In short, look for a logo which is clear and easily recognisable as yours. The colour palette needs to be chosen based upon what your audience would best respond to and is appropriate for you to use in a variety of manners. The fonts need to work with your brand’s voice and vision, and finally, the shapes and imagery need to help tie everything together.

Where to Next in Your Rebranding?

For many total rebrands, everything a business presents to the world needs to be updated. Website, email, social media and contact details all need to be changed and promoted. This can cause a huge issue if your existing audience didn’t know about your rebrand. That is why it is a great idea to keep them in the loop, helping them feel like a part of the change itself, so it isn’t a huge shock when it happens. It will also keep them informed about the changes your business is making, how these changes will benefit them and how to contact you moving forward.

Don’t forget to also include your employees and contractors in the process too. They can act as brand ambassadors, letting people know about the changes on your behalf. They’re also going to feel included and continue to show brand loyalty as they feel involved in the process.

Then it is all systems go when it comes to promoting your new business. A new website domain name will mean that your organic traffic will be almost non-existent at the start. You will need to put considerable effort into the content of your website and can expect to see searches from Google appearing in around three to six months. You can redirect your old domain name to your new one though so that people entering that one will automatically be taken to the new site.

Promoting your rebrand via social media is key, as you will most likely be able to continue to use the same platform accounts. Sending emails to your existing email lists is also a good idea, and paid advertising can help too. If you have kept your followers engaged and updated during the rebranding process, it shouldn’t be too hard to shift their attention to your new brand.

Finally, make sure that you’ve told your suppliers and businesses whose services you use that you have made the change. A phone call gives the personal touch and is appreciated, especially when followed up by an email which includes all of the new details.

If you are on the fence about undertaking a rebrand, a chat with one of our business advisors can help make things clearer and identify a path moving forwards for you and your business. Get in touch with our team today and together we’ll make things happen.

Having a desk job suits many of us down to a tee, but can come at the expense of our health and well-being. A sedentary desk job and lifestyle can lead to increases in cardiovascular disease, type 2 diabetes, obesity and a decline in mental well-being.

Before you pull out the old ‘but people have had desk jobs for hundreds of years’ excuse, remember that our lives have changed greatly since then. We are on the whole less active at home, drive almost everywhere and eat a lot of high calorie and processed foods. These things are only making it more important for those of us with a desk job to keep active during the working day. At MBP, we’re all about looking after the financial health and well-being of our clients, but also their physical too. So, here are a few suggestions on how you can increase your activity levels in the office like we do.

5 Ideas for Keeping Active at Your Desk Job

It’s time to stand up and get active while in the office. Five activities you could choose to try and implement into your daily desk job routine include:

  1. Using a standing desk or desk raiser – alternate between sitting and standing at your desk throughout the day. If you don’t have a standing desk available, add a desk raiser for your laptop to sit upon, or make one using materials you have around the office or home.
  2. Sit on an exercise ball – a chair may be super comfy, but it lets your body relax into a position without effort. When you sit on an exercise ball, your core muscles are forced to work. You sit up straighter with improved posture, and you can also move your backside around too.
  3. Walk around the office – instead of sending emails to others in the office, get up and walk to them if you can instead. Walk the long way to the coffee machine and even take your coffee outside to stretch your legs.
  4. Stretch breaks – set your time to stand up and do some stretches every hour. Arm swinging, leg lunges, squats, walking on the spot and shoulder shrugs are great active activities.
  5. Take the stairs – where you can, skip the elevator and take the stairs instead. You could even get off the bus a stop earlier or park the car further away and walk to the office.

If you have any additional staying active at work ideas, drop your suggestions in the comments below. As always, the team here at MBP are here to help, so if you have any questions about the running of your business (not your running program), please get in touch as we’re happy to help.