The Beal Business Advisor

March 2016

Contact Number: 204-478-7266

In This Issue

Closed Transaction
Buying a Business - Notes Payable and Mortgages Payable
Selling your Business - Preparation of Selling Your Business
Question of the Month - How Can I Improve my Cash Flow?

Closed Transaction

Winnipeg Construction Company

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

Notes Payable and Mortgages Payable

Last month we discussed accounts payable and other accrued liabilities, this month we want to discuss notes payable and mortgages payable. Key items to review include:

Obtain a schedule of notes payable and mortgages payable.
Determine the terms and payment schedule.
Will the acquisition accelerate the note or mortgage or is there a prepayment penalty?
Determine if there are any balloon payments to be made and the amounts and dates due.
Are the notes or mortgages assumable?
Have personal guarantees been provided?

Next month we will discuss discretionary costs and perks & benefits.

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

Business Sellers: Preparation of Selling Your Business

When you sell your house, you give it a coat of paint, perhaps hire a home "stager" who will help you show your house at its best. It's even more important when you sell your business. Preparation can take months or years. A buyer will want to see a good track record of earnings before paying top dollar. Specific issues include:

Management/Operations: Do you delegate? Can you take a two-month holiday? Will your business still exist when you get back? If the answers are no, it will be hard to sell or transition your business to your children.

Financial: Ensure your bottom line is healthy. Your business is valued based on a multiple of sustainable income. You need to prove your business makes a good profit, and that it is sustainable.

Taxes: We all hate them, but did you know paying a dollar in tax could earn you $24? Here's how: If you are paying for personal expenses through your business (nudge, nudge), you save perhaps 12% tax. When you sell, you sell for a multiple of your bottom line. Paying for eight dollars in personal expenses saves you one dollar in tax, but could cost you $24 when you sell (assume a 3x multiple). Strange but true.

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

Indoor Tanning Salon

Fire & Security Business

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 (Conditionally Sold)

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

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

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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

"I am not a product of my circumstances. I am product of my decisions."

Stephen Covey

How can I improve my cash flow?

Cash is the livelihood of any business. Cash shortages can prevent you from meeting your financial obligations, and they can make it difficult to plan for the future and expand your company. That's why you should try to improve your cash flow by making some minor adjustments in your business practices.

Although improving cash flow may seem difficult, the formula to this solution is actually quite simple, collect your receivables as quick as possible and delay your payables without jeopardizing your relationship with suppliers.

These seven tips may help to improve your cash flow:

Trim your inventory - keeping too much product on hand can tie up a great deal of cash. Make sure your inventory turns over at a regular pace.

Create incentives for faster payment - give customers a discount for paying invoices before due. Offer an additional percentage off or maybe a fixed dollar amount off of the total invoice if they pay within 5 to ten days of the invoice date. This will provide an incentive for your customer to pay faster as they will be saving money.

Bill regularly and often - if you don't already have a system in place, start billing for products or services on a regular basis, and invoice products and services as soon as they are shipped or complete.

Have internal collection systems in place - have detailed internal receivable reports to keep track of receivables, and act immediately on overdue accounts.

Avoid slow paying customers - too often business owners are more concerned about gaining customers than check customers' credit references and call other businesses that have dealt with the potential customer. Do not take on new clients that are either slow paying or do not pay at all.

Stretch out payables - keep cash within the business as long as possible without paying your bills late. Do not pay every bill as soon as it arrives, wait until it comes due, or if suppliers want to be paid quicker ask for a discount.

Consider raising your prices - check out what the competitors are charging and make sure your prices or rates are not too low.

Other ideas you may want to consider to improve cash flow would be to factor your receivables through your bank, take out a loan or consolidate your loans, and lease equipment instead of purchasing it outright.

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.