The Beal Business Advisor

November 2015

Contact Number: 204-478-7266

In This Issue

We're Hiring!
Buying a Business - Inventory
Selling your Business - Myths about Selling your Business (Part 4)
Question of the Month - What is Benchmarking and Why Should I Use it?

We're Hiring!

Beal Consultants is growing and looking to hire a new Associate Consultant. The Associate Consultant role is a full-time, entry-level position. The successful candidate must have excellent written and oral communication skills. Must be capable of doing detailed research and analytical work. Must understand how income statements, balance sheets, and cash flow statements interact, and able to develop excel spreadsheets. This position reports to the Principal of the firm, but must be able to work collegially to support all members of the firm. A B.Comm. or equivalent is a requirement for this position.

Email a cover letter and your resume to kim@bealconsultants.ca if you are interested in applying.

Inventory

Last month we discussed accounts receivable, this month we want to discuss inventory.

Unlike receivables and cash discussed over the past two months, inventory is almost always sold with an active business. However, just because it is included in the sale doesn't mean it is included in the price. A price for a business is typically stated "$x plus inventory" This is usually done because inventory can (and does) fluctuate every single day, so it is important to be clear in the negotiation process how much inventory is included. However, even when it is clear inventory will be counted and paid for in addition to the core price, there are still a number of issues to work through. The first, and most basic, is the dollar value of the inventory and how it is measured. That may sound like a basic question, but the answer will differ across businesses. Some basic questions to ask:

- What is the method of valuing inventory? (LIFO, FIFO, Average)

- Age and condition? Obsolete?

- Is the quantity too low or too high?

Next month we will discuss real estate.

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

Myths about Selling Your Business (Part 4)

We are almost finished our top five business brokerage myths that business owners have when they think about selling their business. Last month, we talked about valuing your business. This month, we want to talk about timing.

Certainly, an owner wants to be sure he or she is mentally and emotionally prepared to sell. But personal readiness is just one factor. Economic factors can have a significant impact on the sale of a business.

Sale prices can be affected by industry consolidation, interest rates, unemployment and many other economic measures. You may want to consider selling when the time is right - not necessarily precisely when you turn 65, or at a certain month in the year. Talk with a professional and aim to sell when your personal goals and market conditions align. Need help selling your business?

Next month's myth: - "It's just like selling a house!"

If you are interested in discussing succession planning for your business, contact us at 204-478-7266x110.

Current Businesses for Sale

Pizza and Chicken Restaurant (NEW)

Central Winnipeg Convenience Store

Winnipeg Used Book Store

Seasonal Product Manufacturer/Contractor

Women's Clothing Store

The UPS Store - Winnipeg Location

Coffee Shop Franchise South of Downtown

Rural Chicken Franchise Restaurant

Home Renovation Business

Profitable Resort

Winnipeg Auto Repair Shop

Farm Parts & Recycling Business

Auto Parts, Service and Recycling Business

Winnipeg Construction Company

Construction Supply Distribution Opportunity

Profitable Winnipeg Automotive Services Center

Convenience Store South of Downtown

Rural Automotive Repair Shop Location

Carman Property

Electrical Contracting Business

Fitness & Weight Loss Facility

Winnipeg Tailor Business

Franchised Food Retailer - Franchise

Franchise - Tanning Studio

Small Town Dollar Store

Thompson Hotel and Restaurant

WOW 1 Day Painting Franchise

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

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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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Quick Links

Beal Consultants Website

Quote of the Month

"Whatever the mind of man can conceive and believe, it can achieve"

Napoleon Hill

What is benchmarking and why should I use it?

Benchmarking is the process in which a company compares performance metrics against others in the industry. The objective is to identify best practices that will help improve business performance. Benchmarking can be used to compare your performance to others in the same industry; more specifically benchmarking helps to determine how well you are doing when compared to others, and allows you to set targets for improvement. The benchmarks provide guidance on what figures we would normally expect a business in a particular industry to report.

Benchmarking is a structured approach that involves data collection, analysis, and reporting. Dimensions most commonly benchmarked are quality, time, and cost. The result of the data analysis is a point of reference against which you compare your company's performance and target improvements.

Why Should I Benchmark?

The basic reason for benchmarking is improvement, and if you don't know what the standard is you cannot compare yourself against it. Further, it is also important to know where your competitors stand and how others in the industry are performing, If you don't benchmark, how do you know if your performance is good or poor? It is important to benchmark to not only improve performance, but also to not fall behind your competitors.

What Can I Benchmark?

Benchmarking is a management tool that is being applied almost anywhere. Benchmarking can either be qualitative or quantitative. Quantitative benchmarking compares metrics that can be calculated, such as ratios, and qualitative benchmarking compares processes that are subjectively critiqued and compared. Often, a qualitative benchmark can give an answer to the shortfalls of a quantitative benchmark.

Typically, there are two different styles of benchmarking:

Internal benchmarking - compares results internally over multiple time periods
Peer benchmarking - compares results between businesses in the same sector

Internal benchmarking is relatively easy as the information is readily available. Peer benchmarking on the other hand requires the use of publicly available data, which can be more difficult to find. An excellent source for peer benchmarking is industry Canada's SME benchmarking tool.

SME Benchmarking

SME Benchmarking offers industry-specific income statement and balance sheet data for small to medium sized business, allowing you to estimate the operating costs for a new business, view financial performance averages for the industry you compete in, and enter in your company's own financial data to see how your business measures up to companies your size.

Call us at 204.478.7266 x110 if you would like us to help you write a business plan.

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 to book a free, initial 30-minute consultation to explore how we can help you buy, sell, value or improve your business.

Legal

Copyright 2015 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.