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The Beal Business Advisor

December 2015

Contact Number:  204-478-7266
In This Issue
  • Closed Transaction       
  • Buying a Business - Real Estate
  • Selling your Business - Myths about Selling your Business     (Part 5)
  • Question of the Month - What is Goodwill and how do you create it?
Closed Transaction

 Restaurant Business     

                   

 

 

 

The Undersigned Has Acted as an

Advisor to the Vendor

 

 

 

Beal Consultants

Steven Beal, MBA, CPA, CGA, CFA, CBV, CBI 

204-478-7266 ext. 109

www.bealconsultants.ca

 

 

 



Real Estate  
Last month we discussed inventory, this month we want to discuss real estate.
 
It is typically clear if real estate is included in a business sale or not. When it is, you want to make sure you understand:
  • What is owned - address, legal identification
  • Condition, age, and fair market value. Is an appraisal necessary?
 When real estate is not included, you will probably be taking over a lease or signing a new one. Some issues to consider at that point include:
 
  • What is the remaining term? Is it assignable?
  • Are there any option periods?
  • What other fees (such as common area costs, taxes, snow removal, etc.) are payable?
  • Who is responsible for the roof and HVAC?
Next month we will discuss machinery and equipment.
 
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 5)
Myth #5 "Differences between Selling a Business versus Selling a House"
 
Over the past five months, we have been talking about the five most common myths that business owners have when they think about selling their business. Last month, we talked about the timing issue. This month, we want to talk about the difference between selling a business versus selling a house.
 
Preparing to sell your house may take a few weeks, then you want to get the word out to everyone that the house is on the market. Once you get a satisfactory offer, you sign on the dotted line, turn over the keys and move on.
 
Selling a company is much more complex. A successful business sale usually requires a great deal of pre-planning, possibly up to a year and maybe as long as three years to drive sales, develop key staff, document the operations and control expenses.
 
The average house will sell in less than four months, while the average business takes nine months to a year.
 
Even after the business is sold, the seller can be expected to put in at least a few months, and possibly a year or so of transition time, helping to make the new owner a success. Sound sale strategies will bring you the optimum price the market will bear. Go to market with realistic expectations by getting a professional valuation and using a professional business broker. We can help.

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

Current Businesses for Sale

 

Transport & Event Planner (NEW)

 

BNI Manitoba Franchise (NEW))

 

Pizza and Chicken Restaurant 

 

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 - Conditionally Sold  

 

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    

 

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

 

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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Quick Links

Beal Consultants Website  

 

Quote of the Month

 

"Life is about making an impact, not making an income"  

   

Kevin Kruse     
 
What is Goodwill and how do you create it?

Goodwill is part of a business's value that is over and above the value of identifiable business assets. Business goodwill is an intangible asset that cannot be ascribed to other business assets. The term was originally used in accounting to express the intangible but quantifiable "prudent value" of an ongoing business beyond its assets. Goodwill is an asset a business uses to produce income and accounts for a well-run business as a whole being greater than the sum of its parts.
 
Goodwill in financial statements arises when a business is purchased for more than the fair value of the identifiable net assets of the company. The difference between the purchase price and the sum of the fair value of the net assets is by definition the value of the "goodwill" of the purchased company.
 
Types of Goodwill
 
There are two main types of goodwill commonly referred to in small business valuation:
 
  • Institutional goodwill
    - this is associated with the business, its position in the marketplace and its ability to effectively serve its customers.
  • Professional practice goodwill
    - this is associated with professional practices or services and has two distinct components, practitioner goodwill and practice goodwill. Practitioner goodwill relates to the skill and reputation of the individual professional practitioner, and practice goodwill is much like institutional goodwill and is the professional practices reputation that allows the practice to produce superior income.
How to Create Goodwill
 
There are three main ways in which a company can create goodwill:
 
  • Going concern value - this indicates the existence of business assets ready for use in producing business income. The value is created because a business can effectively apply its capital (financial resources and equipment), labor (employees), and coordination (management) to produce economic benefits for its owners.
  • Excess business income - this implies the existence of earnings above a fair return on all the other business assets. The idea is that this excess income is due to business goodwill.
  • Expectation of future economic benefits - the belief that the business has additional value because it may be able to create new products and services, attract new customers, and acquires or merges with other businesses in the future.
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.   

 

www.bealconsultants.ca