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A quick background check (customs clearance) for those who don't know me. I am completing the 30th year of my apprenticeship in banking and finance. After a somewhat chequered career of 20+ years with NAB I jumped ship to a row boat and started my own commercial finance brokerage. I have focussed on rights and motels for the last 12 years and now have accommodation business clients from Mt Buller in Victoria (snowfields and skiing) right up the east coast to Port Douglas (rainforest and reef).
The diversity of client base, combined with an ongoing association with very experienced industry professionals over time, has allowed me to learn invaluable lessons that will stay with me for life. I have evidenced some great outcomes and some absolute disasters. Obviously there is "no learning without experience" but, in reflection, you often question did we have to learn the hard way? In any case I suppose we all take forward the good experiences and try to replicate them and of course the bad experiences should remain in our memories to never be repeated.
So Charting the perfect course - is there really any such thing? Every journey begins way before the boat leaves the harbour. And every captain has an end destination in mind. Therein lies the first lesson - Begin with the end in mind! Those who know me well will tell you I tend to labour on and on with this one. But if you stop and think about it - Begin with the end in mind!.
Just as you would prepare for a voyage with planning, provisions, professional advice, plotting maps, checks of electronic navigation equipment, full inspection of all rigging etc, buying a business, any type of business, should adopt the same principles. And just as you would not take to opens waters without full investigation, likewise for a business purchase. Do your own homework, create a checklist and consider all aspects. Inspect what you expect. Seek out knowledgeable industry professionals. If bad weather is forecast... stay at home unless very experienced and confident... even then maybe think twice.
So you're now at sea and happily sailing along - master of your own ship. Do you now discard the charting, roll up the maps, stow away the safety gear and turn off the electronic navigation equipment? I think not and herein lies the second lesson - Certainty equals value!
You need to take all of the planning and investigation and wise words from learned professionals and put it all to good use. In fact one of the greatest mistakes I have seen for any business is not to maintain continuing relationships with the industry professionals that provided analysis and advice in the first place. It is imperative that you remain connected with the solicitor, accountant, finance broker, bank manager and sales agent, everyone that knew and understood where your journey began and the destination you had charted. Whether the sea is calm or stormy they should remain employed to help you stay on course and maintain ongoing certainty so you know exactly where you are and where you are heading.
You have successfully navigated unchartered waters. Hooray!
So as you near land you would advise coast guard, the harbour master and perhaps customs of your pending arrival - right? Well, business should be no different. The last lesson for today - You buy a business on the premise that one day you will be able to sell it. So long before you list your business for sale (enter the harbour) re-visit with your professional parties, consider all aspects of your business that a discerning buyer will investigate and prepare them for inspection. Do your homework to be sure your paperwork is in order.
There is a gentle breeze at your back as you ease alongside the jetty - you are there! Before you step onto dry land one last opportunity to re-visit that checklist you created at the beginning of the journey. All the investigation you did to buy the "perfect" business could be great reflection to consideration of what you are about to sell.
Hopefully you have now met with your lawyer and topped-up your tenure, all of your owner agreements are current and assignable, your business name remains registered and, of course, you own your domain names. You have re-visited your adjusted net profit with your accountant and discussed you post sale tax position. You have consulted with your finance broker and understand loan payouts, fees, penalties. You have researched residential values and had your manager's apartment professionally valued (for that matter the whole business valued).
All is ship shape as you alight from the boat to greet your well respected sales agent. You are confident enough in your endeavours to sign off and hand over the captains log!
Inspection - no worries! Investigation - no worries! A safe journey - no worries!
Calm seas, a gentle breeze and some invaluable help along the way....the "perfect course".