Fishing- what’s that got to do with Management Rights?

Someone recently likened finding a suitable management rights business to a fishing expedition.

Now, I don’t know about everyone who reads our newsletters, but I can tell you that the directors of RCA Business Brokers are very keen fishermen indeed. That’s not to say that we are particularly good fishermen, just that we are particularly keen on the activity.

From our perspective, there are fish catchers and fish feeders. Unfortunately on numerous occasions we have been labelled the latter.

So, how are fishing and buying a management rights (MLR) similar??

Firstly there is the preparation, we need to gather together the equipment and information we need.

Fishing is easy, bait, rods, net, tackle, bucket and location.

Management rights, funds, objective, specialist advisors, timing and location.

Let’s look at these in the order above:

• Funds: It would be a complete waste of everyone’s time if you began a search for a business without any idea of what you were capable of borrowing and spending. It’s a bit like buying bait for fishing, if you haven’t got any then don’t even bother getting in the car because you are wasting your time. A half hour chat to an experienced finance broker or management rights lender will give you a very clear position on your financial standing and buying power.

• Objectives: Before heading out to contact brokers, banks, solicitors and accountants, it would be a great idea to sit down with your spouse or partner and have a serious discussion about what your intentions and ambitions are regarding this brain-snap you have had to buy a management rights business. A lot of time can be saved for all concerned if you know that everyone is on the same page in terms of wanting to be in the industry. Topics such as location, budget, family, timing and responsibilities are all things that should be sorted before checking out the agent’s websites and listings.

• Specialist Advisors: You don’t go to doctor to get your car repairs done and likewise you don’t ask your friends and family for legal advice (unless they are solicitors of course). Specialists are called that for a reason. Specialist solicitors, specialist accountants, specialist finance brokers / bankers and specialist agents are all available in the management rights industry. PLEASE use them. When you do eventually find the business that you have been looking for, the specialists make the whole process all go to plan.

• Timing: If anything about the sale of management rights correlates to fishing then it is the timing aspect. So many buyers (let’s call them buyers for now), start contacting agents, banks, accountants etc before they have even established a timeframe with their partner or family. As an agent, we love to speak with genuine buyers. Buyers that are on an information fishing expedition 3 years out from making a decision are probably not going to receive the immediate attention that they feel they may be entitled to. We have nothing against having a coffee with potential future buyers looking at what they may do in a few years time, but please let us know it’s a fishing exercise and we can make time for you accordingly. Also wanting to inspect properties 2 or 3 years before you are ready to buy just isn’t going to happen. There are in the industry what we call “taxi driver agents” out there who don’t ask questions and will be glad to have someone in the car with them. You may need to find one of these.

• Location: You have given us your budget, your family needs, your timing and objectives, now, where do you want to live. For an agent to spend time and energy to find the business that perfectly ticks every box you have listed for a business only to be told you can’t go there because it is too far away from the grandkids is frustrating to say the least for all involved. If there are extenuating circumstances such as family, medical needs, you don’t like the beach or you do like the beach etc, then please let us know before we start looking.

Some buyers don’t care where the business is located, they are buying into the industry for the income and experience and location doesn’t come into consideration.

Others only want a business if it is located on the left hand side of the large tower opposite the beach near the surf club but not too close to the night club etc etc etc. If you have a preference, it is helpful to let us know before we start looking.

In summary we are here to help you find the management rights or motel business of your dreams. Anything that you could say or do to help us achieve that objective would be greatly appreciated.

Happy hunting
RCA Business Brokers