Feeding Time For The Business Wolves

Monday, 27 April 2009, 2:01 pm
Press Release: nzbizbuysell.co.nz

Feeding Time For The Business Wolves

Current economic times might mean lean pickings for many small businesses but for the savvy business wolf, it can be a feeding frenzy. There are two ways of dealing with the economic downturn. The conservative approach could see a battening down of the hatches, trimming the fat and tightening the belt. But for the hungry business wolf, it can put a gleam in the eye and a prowl into the world of opposition acquisition.

If you fall into the second category then now is the best time for hunting. During tougher times it can be easier and much more cost effective to buy out your struggling opposition and plump up your business. In this way you are effectively buying expansion and possibly doubling your client base and your income.

Taking advantage of the current market is an investment in the future and with so many small businesses likely to be coming on the market, buying well to help maximise the value of your business can be a very good move.

Buy Your Competitor

Incremental sales can be a long, hard slog to building your business, so buying an existing business and incorporating it into your own will take you less time and offers other advantages. As well as acquiring additional customers and cashflow from day one, you are buying a similar business so you will already know the ropes and the industry, saving you valuable time and offering leverage and cost savings.

In addition to increasing your customer base, buying your competitor means you will inherit trained staff who understand the business and it’s customers, systems and potentially, a new culture.

Buy Smart

Not all businesses are struggling - many are doing fine and some much better than fine. Bear in mind that business acquisition should occur as part of a strategic plan, not just because it is available. You will need to identify long and short-term objectives incorporating desired personnel, strategic and operational goals. Develop a profile of the type of business that would best suit your needs and develop a strong plan, preferably with the assistance of your accountant to achieve your goals.

Not all businesses are up for sale because they are struggling - the timing could merely be coincidental. If you see yourself as the entrepreneurial type of business owner, then new ideas, innovation and fresh energy may be all that’s needed to give your newly acquired business the base and strength it needs to grow. A recent US publication stated that a study of 700 companies revealed that more than 20% of companies that were in the bottom quartile of their industries jumped to the top quartile during recession. Seventy per cent who achieved this increase in position retained their position once the economy recovered.

Tighter times can very well open opportunities for better deals on leases, better buying of commercial property, equipment and supplies. Re-structuring existing leases and perhaps re-financing at lower interest rates can free up capital for expansion and takeover. For the lean, hungry business wolf, times can be very good indeed.

For more information on growing your business visit nzbizbuysell.co.nz

ENDS

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