WHERE CAN I GET A CHEAP DEAL?

18/09/2017 by Rod Askew – RCA Business Brokers

Call them bargain hunters or bottom feeders, there will always be buyers who don’t care much about the business just as long as it is cheap.

For those who are old enough, there was a TV show back in the late 60’s about the “Rag Trade” called Never mind the quality, feel the width!

The bargain hunters are a bit like this in many ways, more interested in volume for their money, than quality for their money.

Now volume is fine if it is in a good location and if it has potential to do something with it. However buying big and cheap simply because it is big and cheap just doesn’t make sense, if you can’t turn it into something better.

Unfortunately part of our business at times involves dealing with receivers and managers on businesses that have been lost by their owners to the banks or mortgagees. Sometimes the problem is pretty obvious, death, sickness, change in market conditions (GFC) etc and other times it comes down to ordinary people making very poor decisions and not wanting to listen to or ask for advice from someone who just may know a little better.

This is called pride, which sometimes can be a bad thing in business.

Whenever one of these “receiver” businesses hits the market we are inundated with enquiry from buyers looking for a bargain.

They always ask the same question, “What do you think I will get it for”?

Depending on the reasons behind the business ending up with the receivers, they are sometimes bargains and quite often people buy them, fix them and onsell for a good profit.

Fortunately not many businesses end up in receivership in our little world of management rights and motels. Mostly we see businesses, that are suffering a downward spiral agree to either take advice to fix their business or they sell up before they lose the business altogether. Usually selling for less than what they paid.

Now, when the bottom feeders or bargain hunters don’t have any receivership businesses available for purchase, we get calls from them asking for businesses that are in trouble and can be bought cheaply and fixed up.

Again, I am very happy to say that managers and owners today are generally, not too proud to ask for help when they get into a spot of trouble with their business.

The trick is to stop the rot before it reaches a point of no return, and believe me there is definitely a point of no return.

In years past we have spoken to managers who refused to take advice from their solicitors, accountants or agents and ultimately lost their business or a major part of their business forcing them to eventually sell cheaply.

Keeping the bargain hunters happy!!!

Agents, solicitors and accountants in our industry today all know of professionals who will come on board beside the manager to sort out problems you may be experiencing from body corporate issues , faulty booking systems, aggressive real estate agents, ineffective marketing issues and just about any other problem that exists in our industry.

I hope that you never have use for any of these “helpers” in your business, but if you see your business slipping for any reason and if you are having problems with a body corporate, a lessor in a motel, an investor owner or an owner occupier, please don’t make the same mistake others have made and just sit back with that good old “she’ll be right” Aussie attitude.

All it takes is a phone call and you can make certain that the bargain hunters will not be circling your place one day.

If you are having problems or issues in your business and need help, give us a call. If we can’t help personally, I am certain we can refer you to someone who can help.

We are much happier selling a well run, high nett income business for good business owners than we are selling for receivers and managers to bottom feeders.

Good luck out there

Regards

Rod