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The Beal Business Advisor

March 2014

Contact Number:  204-478-7266
In This Issue
  • Buying a Business - Personnel    
  • Selling a Business - Training Your Successor      
  • Question of the Month:  Why Am I Always Short of Cash when my Business is Growing?    
  • Current Businesses for Sale
  • Upcoming Seminars     

  Personnel

 

Last month we discussed the importance of understanding financial ratios when you buy a business, this month we want to discuss personnel issues.  

 

In many cases when you purchase a business, it includes a payroll with employees that will now be working for you. You will need to familiarize yourself with the organizational culture and structure. Some key questions include:

  • What are the job responsibilities, rates of pay and benefits of each employee?
  • What is each employee's tenure (length of time with the organization)?
  • What is the level of each employee's skill in their position and are they employed under an employment contract?
  • Will key employees stay after the business is purchased?
  • Are any employees part of a union, or is any union organizing effort likely?
  • Have there been layoffs in the past year which could trigger lawsuits?

Next month we will discuss patents.

 

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

 


Training Your Successor
Last month we discussed the importance of clarifying roles and responsibilities as you transition.  This month we will focus on training your successor.

As discussed last month, having written job descriptions is essential for a smooth transition to ensure everyone knows what they should be doing.  However, knowing what you should do is not the same as knowing how to do it.  This is where training comes in.

 

Training comes in different formats - there is formal school learning, "book" learning, and on-the-job experience, and everything in between.  What form and timeline you use will depend on your business and the starting point of the individuals.  Buyers with experience in the industry may just need a brief introduction to how you do business and your key clients and suppliers.  Others may need more extensive training on how to run and manage your business.

 

In general, the more complex/unusual the business, the more training required and the more lead time you need to prepare the business for sale.

 

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  

 

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

 

"If you don't design your own life plan, chances are you'll fall into someone else's plan.  And guess what they have planned for you?  Not much."  

 

 

Jim Rohn    

 

Why Am I Always Short of Cash when my Business is Growing?

 
As long as you are growing, cash requirements never improve: If you double in sales, you could double in cash requirements. Last year's profit probably won't be enough to cover your new cash needs.

 

When examining your cash flow statement, if cash flow from operations is negative, take a deeper look at your underlying business. The following scenarios can result in negative cash flow from operations:

 

  • Sales are not high enough.
  • You are undercharging for your products or services: Do a pricing and costing review to determine if you are charging enough for your products and/or services. Check your competitor pricing. Check your profit margins.
  • Your business expenses are too high. Are you managing your expenses well? Have they increased over the last 12 months?
  • Aging accounts receivables. If your clients are not paying on time or your credit terms are too long this will develop cash issues. Some solutions include to take a deposit upon sale, invoice immediately upon completion, offer incentives for paying on time or encourage customers to pay using a credit card. If collections are an issue consider outsourcing to a professional.
  • Analyze your inventory. Do you have the right product mix? Is your inventory turning fast enough? Discount any slow sellers to move them out the door. Consider an inventory management system. 

If the cash flow issues are not arising from operations, look at your capital structure to see if you need more bank financing and/or equity. A growing business requires cash to finance increases in receivables, inventory, expenses and capital expenditures.

 

Cash flow is one of the major causes of failure in small business. In order to prevent cash flow issues you need to develop an accurate cash flow forecast. Take into consideration seasonal fluctuations, price increases, and late payments. Be conservative and realistic. Determine what sales level you need to make every month to cover your cash out flow requirements. If you are not achieving this, develop a strategy to increase your sales.


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