Insights on Similar Topics

Its not always who's first on the list that matters. Look at cricket for example.

The start of spring brings warmer weather and the start of the cricket season.

Whether you like cricket or not, its hard to ignore as Australia’s number one summer sport. Its a bit like doing your tax; businesses either look forward to this time of year or try to ignore it for as long as possible.

In uncertain times or slowing sales, you need to move quickly to protect your bottom line.

Ignoring or delaying a decision to cut the fat from your business will significantly impact your business performance, cash flow and future survival.

Ive just finished reading Killing Fairfax. A very interesting chronicle of the demise of Fairfax; especially so for someone who grew up and got his professional start in print media, with a bit of ink still running in his veins.

And it has some excellent lessons for businesses that face pressures due to change.

Bankruptcy and corporate collapses were the highest ever recorded in Australia in 2012, with only 5% ever paying a dividend. On top of this many more businesses and individuals entered formal debt arrangements.

So what are the typical warning signs?

Building and growing a business doesn't happen overnight - it takes hard work, and a lot of it.

You'll get some things right and some things wrong - but you'll learn a lot from what happens.

Due diligence. Whats it actually mean?

In short, due diligence is an investigation.

And when it comes to buying a business, a proper due diligence process makes sure you get value for money.

Over a decade ago a young cricketer at the Australian Cricket Academy was approached to bat whilst the Australian team were practicing in the nets nearby. The teams fast bowlers were asked to try and bowl out the 16 year old star of the future.

Caught in the economic downturn?

The key to operating a successful business and making money in an economic downturn or recession is to know where your business performs well and where it can improve.

A "Business Value Gap" is the difference between the value of your business today and what you need it to be at time of sale.  

A shortfall can have a significant impact on your retirement plans and may force you to reassess your desired standard of living in retirement.

Worst case - it can mean you cant afford to sell.

As business owners we often want to feel essential to the success of our business.  Some common quotes from business owners are:

“My Customers are totally loyal to me”

“I am the face of my business”

It is critical that business owners have a succession strategy. Many people are led to believe that succession means selling.

This isn't necessarily the case, however, as there are a variety of succession strategies available that are not widely considered by business owners.

Youve grown your business gradually, and now your mind turns to collecting your reward from your investment of capital, know-how and years of effort.

Achieving the most money for your business requires the same diligence it took to grow it.

So how can you ensure you receive a return for your efforts?

When selling a house making sure that the gardens are tidy, the interior is clean and pest treatments are up to date are all simple matters that can be taken care of before inspection times. This will attract the eye and cheque book of the purchaser with little need for negotiation.

A shortfall in this gap can have a significant impact on your retirement plans, forcing a re-think on your desired standard of living in retirement. Not ideal. Or worse - it may mean you cant afford to sell!!

I heard a funny story from my friend Rob Nixon.  It went like this...he took the kids to a movie.

On the way out 2 of the 3 kids were mucking around in this tiny school bus.

So what happened to fire??

There are many examples of businesses getting in the ready mode for growth, change or advancement.