The eternal question, Fish, Pork or Beef.

It’s a dilemma that noodle eaters have pondered for centuries.

Fortunately the noodle decision is not a life changing one.

For us it’s, Management Rights, Permanent, Mixed Business or Short Stay.

What’s best for me is a question we are often asked.

Advice about your noodles would probably be an easier question.

The old adage, “How long’s a piece of string”, rings true for this question also.

We are all so different in how we look at businesses and what will suit us in the long term.

What do we have to consider?

1. Location
2. Profitability
3. Affordability
4. Personalities
5. Effort
6. Sustainability
7. Durability
8. Liveability
9. Saleability

Let’s address them one at a time and try to shed some light on your decision making processes. Things to consider.

1. Brisbane, Gold Coast, Cairns, Melbourne, what is going to suit you best as both a destination business driver and a place to live. What’s important about the location to you. Family. Desirable lifestyle. Familiarity. Price. Capital Gain.
2. Profitability. Profit is not a dirty word and it is definitely the main reason the vast majority of buyer take on a management rights business. What do you want to earn and what can you do with the business you have bought?
3. Affordability. Simple, how much have you got and how much do you want to spend. This is a very important step to understand before you get in the car and start looking at businesses to buy. Ascertain your budget.
4. Who is going to be involved in the business with you. Just you and your partner, or kids, friends and family. If there are going to be multiple partners in the business, then it needs to be established just who will live onsite, who will do the caretaking, who will work in the office and what involvement each will have each day.
5. The biggest killer of partnerships is summed up in the statement “I do all the work around here and they just do nothing”. Make it clear from the start who is doing what and who is getting paid for what. Clear understanding means less arguments down the track.
6. Sustainability. Is the business you are buying sustainable. Everyone who bought motels and management rights in Central Queensland thought the mining boom would last forever. Speak to experts and take advice.
7. Are you 75 years of age and your business partners 30. Refer to items 4 and 5 above. Set clear guidelines as to who does what and make them realistic for what you are capable of.
8. Liveability. No one wants to live in a shoebox located beside the garbage bins. Read the information given to you and decide IF you can live in the unit or is it going to cause tension for those involved. Coming home to a miserable living space each night will soon wear very thin for everyone.
9. Saleability. Sometime in the future, you are going to want to sell the business you are about to buy. Is the business going to look the same or better when the time comes to sell? If you bought it as a “fixer upper” today and got so busy you never got around to fixing anything, then it is probably not going to be the capital gain goldmine you thought it might be.

If you get most of the above sorted before you part with your hard earned money to buy a business, then the rest should be relatively easy.

Have a great month.

WOW! August already.

RCA Team