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The Beal Business Advisor

February 2014

Contact Number:  204-478-7266
In This Issue
  • Buying a Business - Financial Ratios   
  • Selling a Business - Importance of Clarifying Roles & Responsibilities As you Transition     
  • Question of the Month:  Determining a Good Name for your New Business   
  • Current Businesses for Sale
  • Upcoming Seminars     

  Financial Ratios

 

Last month we discussed discretionary costs and perks & benefits, this month we want to discuss financial ratios.

 

While analyzing the balance sheet and the income statement, sales and operating ratios should be calculated in order to point out areas requiring further study. Ratios provide insight into profitability, liquidity, efficiency and leverage ability.

 

Profit ratios such as gross margin and EBITDA margin are the most straightforward and demonstrate the amount of income being generated from sales.

 

Liquidity ratios such as the current ratio and quick ratio give insight into whether or not the company is able to operate efficiently with the ability to meet their obligations and turn its products and services into cash.

 

Efficiency ratios such as inventory, accounts receivables, and accounts payables demonstrate how long it takes a company to sell inventory, collect receivables and pay payables.

 

The companies borrowing and equity ratios are less relevant as your debt structure will likely be different from the seller. You can however calculate your assumed leverage and equity ratios to see what the picture will look like for you once you have purchased the company.

 

Ratios are not always that intuitive on their own, you must compare them horizontally to past years and also to industry standards to get the real picture of a business's position.

 

The significance of each ratio, the methods for calculating them, and industry averages are available through publications such as Dun & Bradstreet and Robert Morris Associates. Look for trends in the ratios over the past 3 to 5 years.

 

Next month we will discuss personnel.

 

In the meantime, if you would like more information on buying a business, contact us at 204-478-7266x110.

 


Importance of Clarifying
Roles & Responsibilities As you Transition
Last month we discussed ensuring retirement income, this month we will focus on the importance of clarifying roles and responsibilities as you transition.

 

Everything works better when we get what we expect.  Disappointment breeds frustration and potentially anger.  In a work environment, we (should) know our job and what is expected of us.  In many businesses, job descriptions are not written down (although they should be), but, even so, over time, everyone knows what they are supposed to do and what everyone else is supposed to do.

 

A business in transition upsets the existing order of things.  Roles are changing.  Responsibilities are changing.  When you are looking to transition your business, it is now more important than ever to document what every member of your team does (or should do) and what they will start to do going forward as the business transitions. 


Next month we will focus on training your successor. 

 

If you would like more information on selling or valuing a business, contact us at 204-478-7266 x110.

 


Current Businesses for Sale

Manitoba Trucking Company - NEW 

 

Winnipeg Pharmacy  

 

Convenience Store (Northern Manitoba) 

 

Winnipeg Catering Business 

 

Indoor Tanning Studio    

   

Small Town Dollar Store  

 

Winnipeg Meat Shop - Grocery Store 

 

Bridal Shop 

 

Metal Fabrication Business 

 

Small Town Grocery Store/Meat Shop

 

Seasonal Contractor - Conditionally Sold  

 

Automotive Repair and Power Product Dealership 

 
 Construction and Renovation Company  

 

Trucking Company - NW Ontario  

 

Rural Restaurant and Convenience Store  

 

Winnipeg Convenience Store   

 

High Volume Retail Chain  

 

Thompson Hotel and Restaurant    

 

Prepared Fine Foods - Wholesale and Retail 

 

Addiction Treatment Center

 

Print and Online Publication - Business Opportunity

 

Employment Service - Franchise Opportunity 

 

  $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

 

To review any of these business profiles, please click  here .

 

$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$  

 

We do not advertise all of our listings to the public.

If you have a specific type of business in mind,

please call 204-478-7266 x110 to inquire!

 

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Upcoming Seminars
 

Quick Links

Beal Consultants Website  

 

Quote of the Month

 

"It is our choices, that show what we truly are, far more than our abilities."  

 

 

J.K. Rowling   

 

I Am Starting a Business and Need to Determine a Good Name, Any Considerations I Should be Aware of?

Choosing the right name for your business can be a daunting task. A good name is memorable, stands out from the crowd, portrays your brand image, and doesn't limit growth.

 

Begin your search for a business name by deciding what image you want your name to portray and define the qualities that you want your business to be identified with.

 

Some points to consider when choosing a name include:

  • Who are your target customers? What words may appeal to them?
  • What do I provide those customers? A specific name can be beneficial as it explains to your customers what you do, however avoid a name that is too narrowly defined that it will limit expansion.
  • Does it communicate the right message? Your name must be consistent with the image you want to portray. For example if you want to portray a professional image, you may want to avoid cutesy names, which may work for other industries.
  • What names do my competitors go by? Have a look at existing competitors names to make sure you can stand out from the crowd.
  • Does the name give me room to expand, or is it limiting? For example, if you think your business might grow beyond your current geographic location, avoid geographic names that incorporate your city. 

Once you have decided on a business name, you must consider the legal issues. Avoid playing off well known and branded names with registered trademarks. Using your personal name can work for a business name, however this also has implications for when you are looking to exit your business.

 

A name search at the Companies Office will tell you if a name is already in use. 

https://direct.gov.mb.ca/coohtml/html/internet/en/coo.html

 
For more information, contact us at 204-478-7266x110.
 
 
About Us...

 

Beal Business Growth Consultants, Inc. helps owners of small and medium-sized businesses to buy, sell, value, and grow their businesses.  We also work with individuals who are looking to buy or start a business or franchise.

 

Call us at (204) 478-7266 x110 for a free, initial 30-minute consultation to explore how we can help you buy, sell, value or improve your business.  .

 

Legal

Copyright 2014 by Steven Beal, Beal Business Growth Consultants, Inc.  The information herein is not complete and is intended only to provide guidelines to supplement counsel the reader receives from a qualified professional.  It is distributed with the understanding that the author is not rendering legal, accounting or tax advice or opinions on specific facts or matters, and accordingly, assumes no liability in connection with its use.

 

 

Published by Beal Business Growth Consultants, Inc.   

 

www.bealconsultants.ca