Dan & Daniel here – founders and head of transactions at Vision Brokers & Advisors. The 2022 financial year has been a year flooded with transactions, and we are thrilled to have satisfied so many clients in achieving their selling goals. The most rewarding part of our role is watching the lives of our clients gradually transition after their sale to the next venture of their lives, more time with family, new hobbies, or the next business venture. VBA has grown every year since our inception in 2017 at a Year-on-Year rate of 18% until 2021. We are delighted to announce the growth of 98% in FY22, which we put down to our strategic planning, and following the transaction processes and principles that we know work, without deviating from or compromising on win/win deal values. We are filled with gratitude towards all our clients and are extremely proud of this achievement. Pleasingly, the market continues to be highly active on the buy side evidenced by current VBA clients which are under offer to the tune of $25M+. Here's to your 2023, whether you are buying, selling, merging, or valuing we wish you well and thank you for doing business with VBA. Here are a couple of our favourite recent articles: Related/ Feature Article: https://www.afr.com/technology/behind-australia-s-new-small-business-boom-20220420-p5aeoc Australian Budget Summary – Small Businesses https://budget.gov.au/2022-23/content/jobs.htm#four
BUYERS UPDATE Finding the right balance between deferred payments
Naturally, as the buyer, you want the best deal when purchasing a business and often this can mean that deferred completion payments are necessary to minimise risk and maximise the transfer of goodwill.
There is however a fine line between securing and losing the deal. Buyers should remember that for any sale to go ahead there must advantage to both yourself and the seller, otherwise, why would they sell?
Being strategic is a key component to securing your next business or acquisition successfully. One strategy purchasers have been known to take is to have choice as a key component of their buying success. By having a thorough understanding of your acquisition goals and keeping your buying options open, this allows you more opportunity to shift your offer strategy and buying focus if required. If you have more than one option to choose from, this will give you more control over your offer and buying process, in addition to a more successful purchase or acquisition.
We find the most common split is 70 | 30 | 12. This means 70% is paid after the deferred payment period, being up to 12 months.
Not all businesses are suited to deferred payments however, those that are, 6 - 12 months is usually more than sufficient in transferring the business conduct to the Purchaser and supporting them whilst they learn the ropes.
The most important thing to remember if you want deferred payments to be considered closely:
1. What advantage does the seller have compared to keeping the business profits?
2. What sort of guarantee can you offer the seller that they will receive their funds?
There are of course numerous subtopics and variables to this method, we haven’t even scratched the surface. As always, each situation should be assessed case by case, based on the individual needs of both seller and buyer.
If you are considering an acquisition that encompasses a deferred payment structure, please feel free to give one of our team a call, we would love to help and provide guidance any way we can.
FEATURED LISTINGS
Educational Learning Platform | Brisbane
A well-established and highly respected educational leader
Unique digital learning solutions for years 7-12
World’s first exclusive criteria to measure a students cognitive development (5 measurable skills) across all subject areas over their entire schooling
Exceptional online marking platform- multichoice, short answer, extended written responses marked by either the teacher, student (self-marking), or student-peer marking capabilities
Premium Organic Wholefoods Store | Melbourne
Product catalogue of thousands across organic wholefoods and grocery lines
Expansive, well-established store in prime location with long lease and low rental expense
Strong sales both in-store and online, over $6.5M in FY22
Turnkey opportunity in growing industry
Large loyal customer base
High-quality establishment and infrastructure including elaborate operating software
$3,195,000 Recruitment Specialists | Sydney
Trading over 7 years
Growing demand and reputation for exceeding deliverables
Niche underserviced sector with dependent customers
Developed after years of customer experience analysis and market research
Revenue growing year on year
No further capital investment required
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.
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.