31 JULY 2020 WEEKLY MARKET WRAP UP


MESSAGE FROM THE PARTNERS


The last week has broken our buyer enquiry record. This may seem tough to believe, and the record was net even broken – it was smashed!


There is a fairly simple explanation for this which is aligned with our earlier prediction at the beginning of COVID-19. Job security. Job security. Job security.  Just as we predicted, we have been inundated with new buyers coming from white-collar and corporate backgrounds who have experienced two things lately. 1. The freedom of working from home. 2. Concern that their job security may be at risk.


As an example, just recently, around 1,000 workers were laid off from LinkedIn Australian offices. That is 1,000 highly-skilled new people applying for new jobs. A medium and high-income wage white-collar job position will now have hundreds of applicants applying in today’s environment. Jobs are more scarce, and competition is robust.


Many of these people have realised that there are significant benefits to buying a business. Besides being in control of their destiny, they are also realising the immense tax benefits to running a private company compared to earning direct PAYG income from an employer which is taxed at the highest rate.


We expect even more new first time buyers to enter the market in the coming months. We also expect a lot of new announcements in terms of our current stock moving to be under offer.


We do have a lot in the pipeline, and we hope to be able to service this demand.


Wishing all sellers and buyers the best, and please reach out to us if we can be of any assistance to you.


Regards,

The VBA Team



HOW TO HANDLE THE PROCESS OF DISCLOSURE


Disclosure of material information from a seller to a buyer is a dilemma in the truest sense of the word. 


A buyer needs as much information about the business as possible to make an informed decision and a commitment.


A seller needs as much commitment as possible from the buyer before disclosing critical information, trade secrets, and processes.


The predictability of this conflict occurring is comparable to the precision of the naval master clock!


It is a true dilemma indeed and creates a natural opposition between seller and buyer. 


A lack of a clear pathway to address this issue is one of the main reasons a great sale and outcome for both will not be achieved. When expectations about due process are set from the beginning, it makes for a much smoother journey.


This is how we like to handle the process of disclosure, in a way balanced and fair for both business sellers and buyers. We think a strategy in this regard is highly underrated, and commonly not planned or structured in advance.


1. Firstly, the business broker should work with the Seller and determine which information is “high risk” and “low risk” from a disclosure perspective. Disclosing any information at all has a degree of risk by the way. Every business is different so the information needs to be considered in context with the business. Equally, every buyer is different, so considering if the buyer is an industry/strategic or an investor/market buyer is also important.


2. Next, the information should be organised and stored appropriately. This means it can be shared appropriately. The best way to do this is to organise information into several stages so it can be released in the same fashion... Read more




Since lockdown restrictions were lifted, this business is now back to 100% of its pre-COVID revenue in just weeks, proving its resilience and dominant market share.


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2020 FY numbers are in and they are looking incredible all things considered. This business is back to growing busier by the day, driven by significant growth in their niche. Last week they invoiced out $50k+ alone.


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We have submitted multiple offers to the vendors this week who have been blown away with the level of interest in their business generated by Daniel Kogan. They have received over 139 enquiries since listing in March. An outstanding result deserved by a business with an outstanding ROI. 


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Our mission is to transcend the standards of the business broker industry, and this means so much more than just selling businesses.


We would love for you to be part of our community.



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From all of us at Vision Broker and Advisors, we really look forward to working with you.

Good luck, and make sure you have a look at our business for sale.

https://www.vbaaustralia.com.au/businesses-for-sale-vision-brokers

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30 + years experience 

in operating, selling and buying

businesses

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