The Beal Business Advisor

February 2016

Contact Number: 204-478-7266

In This Issue

Closed Transaction
Buying a Business - Accounts Payable & Other Accrued Liabilities
Selling your Business - Business Sellers: Why is the Buyer so Nosy?
Question of the Month - How can I make a Sales Forecast for my Business?

Closed Transaction

Winnipeg Convenience Store

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

Accounts Payable & Other Accrued Liabilities

Last month we discussed machinery and equipment, this month we want to discuss accounts payable and other accrued liabilities.

As discussed with accounts receivable, accounts payable may or may not be part of a sale. They are typically only assumed by a buyer in a share sale, and when receivables are assumed. Specific things to look for when you examine accounts payable and accrued liabilities are:

Review the list of accounts payable, and their age
Verify if any are in dispute

For accrued liabilities, ensure you understand what they are, such as:

Unpaid wages
Accrued vacation pay & sick leave
Payroll taxes
Federal and Provincial income taxes, PST, GST

Next month we will discuss notes payable and mortgages payable.

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

Business Sellers: Why is the Buyer so Nosy?

Carrying on the theme of "due diligence," I get a lot of complaints from business sellers who think buyers are just being "nosy" when they ask for certain pieces of information (like tax returns or bank statements). Certainly, buyers sometimes want them out of sequence ("give me every scrap of information I ask for, and maybe I'll consider making an offer, once I have reviewed it all for six months..."), but once an offer has been made, and accepted, "due diligence" is the next step. At that point, the buyer has the right to see the books and the records of the company. There is no point hiding anything, because anything bad will come out during due diligence, so the earlier in the process it comes out (ideally before an offer is even made), the less damage potential it has.

Business sellers - don't be offended when the buyer asks detailed questions - that's his job, and the only way you will sell your business.

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

Current Businesses for Sale

Metal Working Business (NEW)

Fire & Security Business (NEW)

Winnipeg Auto Body Shop

Industrial Land & Building for Sale - Suitable for Automotive - Conditionally Sold

Cleaning Services Business

Manufacturing Business

Winnipeg Electrical Contracting Business

Transport & Event Planner

BNI Manitoba Franchise

Pizza and Chicken Restaurant

Winnipeg Used Book Store

Seasonal Product Manufacturer/Contractor

Women's Clothing Store

The UPS Store - Winnipeg Location

Home Renovation Business

Profitable Resort

Winnipeg Auto Repair Shop

Farm Parts & Recycling Business

Auto Parts, Service and Recycling Business

Winnipeg Construction Company - Conditionally Sold

Profitable Winnipeg Automotive Services Center

Convenience Store South of Downtown - Conditionally Sold

Rural Automotive Repair Shop Location

Carman Property

Electrical Contracting Business

Franchised Food Retailer - Franchise

Franchise - Tanning Studio

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 isn't about getting and having, it's about giving and being"

Kevin Kruse

How can I make a sales forecast for my business?

If you are like most business owners, you probably do not enjoy making forecasts for your business. Even though it is hard to forecast, it is even harder to run a business without forecasting. So if it is impossible to predict the future, how do you make sales forecasts? The answer is you make an educated guess.

If you are starting a new business, there are three types of forecasting methods you can use:

Value Based - in other words what the business has to sell
Market Based - in other words what the business could sell
Resource Based - in other words what the business can produce to sell

Here are some tips for making your guess as accurate as possible:

Trust your expertise - you know the industry, so trust yourself! If you aren't an expert in the industry, find someone who is. This can be an employee, a partner, an investor, an advisor, or a consultant.
Collect data from wherever possible - there are plenty of readily available resources out there, so use them to your advantage. Excellent resources to trust are Stats Canada and Industry Canada.
Use historical data - if you have historical company data, use it to make future projections. Your best forecasting aid is the most recent past. You can get relatively accurate data by projecting your two most recent years of sales by month on a line chart and then visually tracking it forward along the same line.
Know the factors that influence sales - know the external factors that influence your company's sales, such as seasonality, labour shortages, or population changes. External factors are often the reason people give for choosing to not forecast sales because they have no control over them. Look for external trends and make an educated guess at how these trends will influence your businesses' sales.
Break your forecast down into pieces - wherever possible break sales forecasts down into smaller variables, for example estimating how many units you will sell and multiplying that by the average price. Even if you are not selling a product, you will more than likely still have unit sales, such as hours worked or projects completed. This will also help you compare your forecasts to actual results
Know your costs - equally as important to projecting your sales, is knowing your costs of sales, also known as your costs of goods sold. This allows you to project your gross margin, as well as how much it will cost you to sell one unit.

Now that you have gathered all of the information, you are in a position to prepare the Sales Forecast. Of course you don't know what is going to happen in the future, but that is no reason to not have a sales projection. When forecasting, remember things will go wrong, but it is important to make your forecast as accurate as possible, and then to compare the forecast verse your actual sales to see where you can improve 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 2016 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.