Do You Have A Business, A Practice Or A Hobby?

December 23, 2019 by John Denton Leave a Comment

Business Owners: Are You Building Something To Sell?

Or do you have practice or a hobby?

Many people tell me that they have a business and want to sell. In reality after asking some pointed questions, it often turns out that they have a practice or are simply “self employed”.

So what’s the difference? Putting it simply, a practice is based around an expert (practitioner / tradesperson) and a business is based upon systems! A business can be though of as a commercial, profitable enterprise that runs without the business owner having to be there. A business can be sold but a practice can’t.

So do you have a business to sell or a practice / hobby? The acid test is “Can you go away for three months holiday and the business still runs without you?” Many business owners build their business around them and make themselves indispensable. This means that not only is the business ‘unsaleable’ but also that the owner cannot take holidays or have a life as well as a business. Typically the business owner is always “on call” for the business either to customer demands or staff if there are any. It doesn’t need to be like this.

Contact me for help to turn your practice / job / hobby in to a business – a business that you can sell at the best price, quickly and easily, any time you want to.

Attend my next workshop on “The 7 Key Steps To Turn Your Business In To A Saleable Asset”

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5 Common Myths About Selling A Business!

December 11, 2019 by John Denton

The biggest frustration for me helping business owners turn their business in to a saleable asset is the beliefs business owners develop around selling their business.

Very often these beliefs are etched in to their minds by well meaning accountants, bookkeepers, business coaches, friends and the media.

If you want the real facts about having a business that’s ready for sale ….

Attend my half day workshop on the ‘7 steps to turning a business in to a saleable asset’ and preparing it ‘ready for sale!’ Click the button to get more details and to register!

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What are those common beliefs and mistakes owners make?

(1) I’ve had my business for 30 years and my accountant says it must be worth a $million
WRONG! Whilst longevity is a factor it doesn’t affect the market value very much. It may help to make it more attractive to a buyer and therefore easier to sell. On the other hand it can also be a negative if the business hasn’t kept up to date!

(2) My accountant says my business is worth 5 times earnings before interest, tax, depreciation and amortization (EBITDA)!
WRONG! With the best will in the world, very few accountants are able to put a market value on a business. Why not? Because they are not out there in the market place day after day selling businesses. Also, there is no set multiplier (properly called an ROI factor) or ‘rule of thumb’ for different types of business. Yes, the adjusted net profit (sort of EBITDA) is one part of it, but the the risk to that profit determines the ROI factor (multiplier). This is explained in detail in my half day workshop with lots of real examples.

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(3) It’s a waste of money engaging a broker or lawyer and using a sale agreement. I’ll just write something up with the buyer.

WRONG! You most definitely need a good business broker or lawyer involved to protect both parties and avoid litigation after the sale. Dollars invested now can save you a fortune and a lot of problems post sale.

(4) My business is a simple one. As long as the buyer offers me the asking price that’s all I need to agree.
WRONG! There are numerous things that need to be discussed and agreed at the offer stage. Then everything needs to be in the buy / sell agreement before both parties sign. Failure to do this thoroughly can end up in litigation after the sale.

(5) That’s it, we’ve signed the sale agreement so I can slow down now and book my flights to Bali!
WRONG! The seller has an obligation to the buyer to keep running the business as they always have until settlement. Many sales fall through because of things which come out in due diligence! Sometimes the buyer will not get finance. It’s not over until the money is in the bank! If you let the business slow down and then end up keeping it …….

This is just a very small list of the things that need to be dealt with when selling a business.

How can you avoid making these mistakes and sell your business in the shortest time, for the least hassle and for the most dollars?

Start by attending my next half day workshop on preparing a business ready for sale!

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I am a business ready for sale coach and business broker and dedicated to helping business owners prepare their businesses “ready for sale” – whether you want to sell or not, because a business that’s ready for sale is well worth keeping!

I tried to sell a business privately and failed because I made all the mistakes! Then I learned the correct way from one of the best brokers in Australia. Since then I have operated as a business ready for sale coach and part time business broker All of that learning and experience is the value add that I can bring to you!

John Denton

What Previous Clients Have Said….

“A few years before I wanted to sell my business, I attended John’s “Prepare Your Business Ready For Sale” course and this was extremely beneficial. I discovered that selling a business was a lot more complicated than I expected. After the course John worked with me as my coach to prepare my company for sale over an 18 month period. When the time came to list I was fully prepared and achieved a very satisfying result. I cannot thank John and members of his BOB group enough for the support and guidance. – Nolan Penning, Former Owner of Magnum Essence

“When it comes time to make big decisions, to bounce ideas off people or have a focus group on a new product, that’s when it can feel very lonely for a lot of small business people. That is where I have found John Denton’s mentoring / business owners board (bob) groups to be invaluable assistance.” – Gary Maynard, Owner – Medichill

You Can’t Change History!

November 4, 2019 by John Denton Leave a Comment

As much as we would like to sometimes, we just cannot change history.

Although, some business owners still try to turn the clock back!

What do I mean by that? Well, every day in business we are creating a history of the business’ performance – reflected in the numbers. Every single thing that happens in the business is there for everyone to see – including potential buyers of the business. And that’s why I keep emphasising to business owners “be aware of the history you are creating. Know your numbers!”

One of my mantras is “Keep your financials clean, up to date and the ‘right’ numbers going up!”

A business, like shares, is much more attractive when there is a history of the numbers going up! The most important numbers are ‘adjusted net profit’ to the owner, turnover, and gross profit. The longer they have been going up the better but at least over the last three years. Steady growth is preferred by most buyers not sudden increases or decreases. Consistency is very important and spread over a good diverse mix of clients. It can take years to get to this state.

One bad number can make a big difference in the value of a business and can put buyers off – big time! Many businesses I get to look at simply do not have a well constructed process for recording and reviewing the numbers. Want to know more? Attend one of my short workshops.

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This is why every business owner who has any ambition at all to sell their business one day, and cash out with a good sale, needs to be planning and preparing their business ready for sale EVERY DAY. Build an asset not just a job for the owner.

A business that is ready for sale will be much easier to manage, run without the owner, be much more successful and will attract buyers. This is the situation you want to be in so that you can have options to sell for the price you want, when you want to. You should be in control of the whole process.

There are many more areas that need to be considered in addition to the numbers. For example how well you structure and record the numbers is also critical. Make it easy for a buyer (and yourself) to see what is happening in the business. Keep your eye on the ball all the time.

In future posts I’ll be covering the other areas but if you want to fast track your learning on the “business ready for sale front” consider attending one of my half day seminars on the topic. To get the details

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The Ups and Downs Of Franchising

September 13, 2019 by John Denton Leave a Comment

“If I could get out of my franchise …”

It happened again recently! I was talking to a franchisee about her chances of selling her franchise business and she came out with the statement I hear so often from franchisees – “If I could just get out of my franchise for what it cost me to get in to it, then I would be happy”.

I hear this so often from franchisees struggling to make a profit in their business. Often they are in a retail situation in a shopping centre. After a few years they realise that the only people making any money are the shopping centre owners and the franchisors. In effect, the franchisee is working to keep the shopping centre owners and franchisors in the lifestyle they have come to expect!

Thinking of buying or selling a franchise business then BOOK A CHAT with me.

Unfortunately, once you are IN and have invested the money, it can be very difficult to get out and recover your costs. If the lease is in the franchisee’s name then you are stuck with that as well. If the lease is in the franchisor’s name, which it often is these days, then the franchisor may be able to terminate your franchise agreement for not meeting targets, put a manager in to the store to keep it running and protect the brand and then recruit a replacement franchisee to take over. The franchisor and their brand are well protected.

Look, I am not against franchises! There are some excellent franchise businesses out their and most franchisors will do the right thing by their franchisees! My point is though that people need to have their eyes open when considering a franchise and understand what they are getting in to.

When you get in to a franchise – new or established;

(1) You are not buying a business! You are signing up to an agreement to operate a business for a ‘term’. That means that you effectively have a license to operate one of the franchisor’s businesses for a period of time (the ‘term’).

(2) There is no guarantee that your agreement will be renewed at the end of the ‘term’ or that you will be able to sell the business. READ THE AGREEMENT AND GET LEGAL ADVICE! Know what will happen at the end of the ‘term’ and what your options will be.

(3) No matter how well you build the business over the ‘term’ the client base (goodwill) belongs to the franchisor.

So, I always say “Find out how are you going to get out of it before you get in to it.”

As I said above, there are some very good franchise operations in Australia and we have such a strict Code of Conduct for Franchisors – as part of the Trade Practices Act – there is no excuse for a prospective franchisee NOT having their eyes open before they sign up.

Always speak to existing franchisees and see how they are going, and if possible, franchisees who have left the franchise. Under the Act the franchisor must provide details in their disclosure document for you to do this.

To view a Guide To The Franchising Code of Conduct for franchisees CLICK HERE

Thinking of buying or selling a business, of any kind, then BOOK A CHAT with me.

All the best in your business, John

“Helping business owners prepare their business ‘ready for sale’ because a business which is ready for sale is well worth keeping!”

Nolan Penning – Former Owner – Magnum Flavours & Ingredients

January 28, 2019 by John Denton Leave a Comment

A few years before I wanted to sell my business, I attended John’s “Prepare Your Business Ready For Sale” course and this was extremely beneficial. I discovered that selling a business was a lot more complicated than I expected. After the course i joined the BOB group and John worked with me as my bob coach to prepare my company for sale over an 18 month period.

When the time came to list I was fully prepared and achieved a very satisfying result. I cannot thank John and the BOB group enough for the support and guidance. My advice to business owners, join BOB today.

Nolan Penning
Former Owner of Magnum Flavours & Ingredients

Gary Maynard – Owner – Medichill

January 28, 2019 by John Denton Leave a Comment

When it comes time to make big decisions, to bounce ideas off people or have a focus group on a new product, that’s when it can feel very lonely for a lot of small business people. That is where I have found John Denton’s mentoring/business owners board (Bob) to be invaluable assistance. You are grouped with a wide variety of like-minded people who want to improve their business, willing to share their time and experience to potentially help you. The advice also comes un-biased with no strings attached, and sometimes it hurts! The fact that I have been a member for over 8 years and my business has improved each year is testament to the value of the group and the professionalism of John as a facilitator. I recommend the group unreservedly.

Kind Regards

Gary Maynard
Owner – Medichill

The Most Dangerous Number In Business Is

January 26, 2019 by John Denton Leave a Comment

ONE

One of anything!

The numbers in a business are the instrument panel by which an owner should run his business. It still amazes me how many business owners I talk to have no idea and no interest in their numbers – until it is too late! That’s why there are many businesses out there with too many ONE’s in the business. Let’s look at just some of the areas of a business where ONE is a risk. If you have any of these ONE’s in your business, ask yourself “How can I reduce my risk?”

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ONE major client. Even with contracts in place there are many ways you can lose the client and if you do then your business is likely to fail. Any client / customer that is greater than 15% of your revenue is a risk and reduces the value of your business.
ONE supplier. Again, even with contracts in place risk is real. The supplier could go out of business or cancel the contract. A supplier can find another outlet for their product or come in to your market and go direct. It happens!
ONE key ‘expert’. What happens if the ‘expert’ leaves the business, suffers ill-health or is poached by a competitor?
ONE key employee. Some businesses rely on one key person (or owner) to do everything. All the knowledge is “in their head” and that is a major risk. This is the case with “practices” that are based upon an expert. Remember, a good business is based upon systems, not an expert.
ONE product or service can become a problem. If that product or service goes out of date, is made redundant by a superior product or gets copied (e.g. video hire, photographic processing etc.) or people buy cheaper over the internet or from overseas suppliers, then you are in trouble. You need to innovate all the time to stay ahead of the competition.
ONE computer system / database with all the business records on, can be very high risk. Yes, I’m sure you do backups – but when was the last time you tested your ‘disaster recovery process? How long before you would be back up and running?

In this age of rapid change, disruption and increased competition, if you are not innovating and evolving faster than the market you are in, you could go out of business. Aim to make your product or service redundant before the competition do. (An old Sony maxim, I’m told). Look out for trends.

Finally, is your business model going out of date and you haven’t realised it yet? For help with all of these things, attend my next workshop on HOW TO TURN YOUR BUSINESS IN TO A VALUABLE AND SALEABLE ASSET – CLICK HERE FOR DETAILS

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I could go on but I’m sure you have got the message.

I’ve used the word ‘risk’ a lot and that’s because it IS risky having ONE’s in your business.

So what do you do about it? Well the starting point is to conduct periodic “risk analysis” assessments. It doesn’t need to be onerous and is best done on a continuous basis. At your regular management or team meetings, take different parts of the business each month (or period) and brainstorm the risks with your team. It often improves the process if you have an external business consultant or coach involved in these sessions because they are not too close to the business, or emotionally attached to it, they will ask better, probing questions.

When you have identified the risks, categorise them by using the LIKELIHOOD / IMPACT process. Assess how likely things are to occur and then assess the possible impact on the business. For most businesses it is sufficient to score IMPACT and LIKLEIHOOD as HIGH, MEDIUM or LOW. Then prioritise the risks starting with the ones which scored HIGH on both LIKLIEHOOD and IMPACT. Now brainstorm ways to mitigate the risk.

As they say – forewarned is forearmed!

As well as assessing the ONE risks, think of trends and external risks, such as the falling Australian Dollar, rising unemployment, the downturn in the mining, resources and manufacturing sectors and things like government legislation.

If you need any help with risk analysis or anything else in your business, just get in contact with us through the CONTACT US tab or attend my next workshop on HOW TO TURN YOUR BUSINESS IN TO A VALUABLE AND SALEABLE ASSET – CLICK HERE FOR DETAILS

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Be Brilliant At The Basics – The Business Essentials

January 12, 2019 by John Denton Leave a Comment

Some years ago I was present at a Dr Ric Charlesworth (AO) presentation to the Australian Institute of Management (AIM) in Perth.

Ric is an amazing person and a successful Australian sports coach, and more. He told us how he coached the Hockeyroos to two Olympic gold medals and how we can use his coaching principles in business. One of the many tips he gave that stuck in my mind, which I often discuss with clients, was “be brilliant at the basics”.

He explained that the most dangerous time for a team was when they were winning with just a short time to go. Complacency could lead to some sloppy mistakes and cost them the game. His strategy at this stage was to get everyone to focus back on the ‘basics’. Know what the essential things are and keep doing them ‘brilliantly’.

It works in business too. When times are good we often get lax, sloppy and complacent. When the economy gets tough or the market changes, and we don’t do the basics, we struggle. Ric’s way would be to be brilliant at the basics of business – the business essentials. It’s not rocket science. Things like:

Know where you are going and have a plan to get you there
Know your target market and focus on giving the customer what THEY want
Give exceptional “memorable” customer service
Implement excellent marketing and sales conversion systems
Get the business running like a ‘Swiss watch’ with systems and processes
Do rigorous financial management
Know your numbers and make better and faster decisions
Strive for excellence in everything you do

However, to master these things remember this;

“IF IT’S TO BE, IT’S UP TO ME!” and “FOR THINGS TO CHANGE, FIRST I MUST CHANGE!”

Ric also said a key for a business owner or manager to be successful was to be humble enough to admit that they don’t know it all. Learn, practice and get a good coach.

I cover this and a whole lot more when I facilitate Business Essentials workshops and webinars!

Click Here to find out more about the Business Essentials workshops and seminars.

Formula For Success In Hitting Business Targets

November 29, 2017 by John Denton Leave a Comment

You set your business targets like you’ve been told to, but you just don’t hit them! Why?

Often business owners are told by well-meaning coaches, consultants and advisors (including me) that they need to set goals and targets in their business and personal lives. In business they will be financial goals, production goals, customer satisfaction goals etc. and all kinds of Key Performance Indicators (KPIs). All of that is true of course. However, why do so many fail to achieve their goals?

We know we NEED to do it. We know HOW to do it and we have the RESOURCES to do it. Still nothing happens. Why?

Whilst running one of my workshops many years ago, and getting in to a discussion about this, I realised there were other factors that came in to play to do with mindset, emotion and desire. I explain it with this simple formula!

PM (%) represents your Personal Motivation factor to achieve the goal on a scale of 0 to 100 %. If your personal motivation is up over 80% then there is a very good chance you will achieve your goal.

You calculate your personal motivation factor from 3 things;

D = Desire – your level of Desire for the outcome of achieving the goal (on a scale of 1 to 10 where 10 is high). How much do you really want to achieve the goal? Is there a burning desire within you to get there? Would you climb mountains, swim oceans and overcome all obstacles to get there? A bit of an exaggeration but you know what I mean. Rate yourself 1 to 10

E + B – your Expectation and Belief that you can achieve the goal. Again, on a scale of 1 to 10, how much do you really BELIEVE and EXPECT you can get there. For example, do you have the required KNOWLEDGE, SKILLS, TRAINING, RESOURCES, CONFIDENCE, etc.? Rate yourself 1 to 10.

Now multiply the two ratings and get a percentage personal motivation factor for achieving your goal.

An example will help. Let’s say you set a goal to achieve a business turnover of more than $5 million per annum in three years. You rate your DESIRE at 10 out of 10, but your BELIEF and EXPECTATION is only a 3 out of 10. Then your personal motivation factor, and chances of achieving it are 30%.

Now that you know this, you can do any one of a number of things: delete the goal, lower the goal or INCREASE your BELIEF and EXPECTATION. This latter one is where someone like me comes in to coach, advise and motivate you to get the BELIEF up. This would probably involve planning, training, realistic time-frames, building CONFIDENCE etc. When you know where the problem is, you can work on it.

We set and plan goals with LOGIC but we need EMOTION to motivate us to achieve! As a business owner / leader you have the additional challenge of getting your whole team’s DESIRE, EXPECTATION and BELIEF up. That’s a part of LEADERSHIP!

Want to learn more or get help then get in contact with me. A chat over coffee (if you are paying) can often be the starting point. CONTACT ME

Lessons From The Boat Race

October 13, 2017 by John Denton Leave a Comment

What management and leadership lessons can we learn from a boat race.

Consultants and coaches please comment below and let me know!

An Australian company and Japanese company decided to engage in a competitive boat race to show mutual respect and solidarity between the two nations. Both teams practiced hard and long to reach their peak performance.

On the big day they felt ready. The Japanese team won by a mile. Afterward, the Australian team was discouraged by the loss. Morale sagged. Top management decided that the reason for the crushing defeat had to be found, so a consulting firm was hired to investigate the problem and recommended corrective action.

The consultant’s finding: The Japanese company team had eight people rowing and one person steering; the Australian company team had one person rowing and eight people steering.

After a year of study and millions spent analyzing the problem, the consulting firm concluded that too many people were steering and not enough were rowing on the Australian company team.

So as race day neared again the following year, the Australian company team’s management structure was completely reorganized. The new structure: four steering managers, three area steering managers and a new performance review system for the person rowing the boat to provide work incentive.

The next year, the Japanese won by two miles. Humiliated, the Australian company laid off the rower for poor performance and gave the managers a bonus for discovering the problem!

And the moral of the story (apart from being a bit of Friday frivolity) is …

And now you are here on my site – have a look around 🙂

Do You Have A Business, A Practice Or A Hobby?

Business Owners: Are You Building Something To Sell?

Or do you have practice or a hobby?

5 Common Myths About Selling A Business!

The biggest frustration for me helping business owners turn their business in to a saleable asset is the beliefs business owners develop around selling their business.

Very often these beliefs are etched in to their minds by well meaning accountants, bookkeepers, business coaches, friends and the media.

You Can’t Change History!

As much as we would like to sometimes, we just cannot change history.

Although, some business owners still try to turn the clock back!

The Ups and Downs Of Franchising

“If I could get out of my franchise …”

Nolan Penning – Former Owner – Magnum Flavours & Ingredients

Gary Maynard – Owner – Medichill

The Most Dangerous Number In Business Is

ONE

One of anything!

Be Brilliant At The Basics – The Business Essentials

Formula For Success In Hitting Business Targets

You set your business targets like you’ve been told to, but you just don’t hit them! Why?

Lessons From The Boat Race

What management and leadership lessons can we learn from a boat race.

Consultants and coaches please comment below and let me know!

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