Buying, Selling and Business Valuations

Buying a business is a significant decision and often a complex process.

It takes experience and a wide range of business skills to know the right questions to ask, how to assess the opportunity and risks, determine its true value, and avoid potential pitfalls.

Selling a business can be equally challenging but rewarding. Knowing the right time to sell, accurately determining its market value, and ensuring it’s ready for sale are crucial steps.

Understanding the true value of your business is also vital for raising capital, securing loans, determining insurance needs, financial restructuring, and planning for retirement or estate matters.

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Buying a business

BUYING AN EXISTING BUSINESS CAN BE A COMPELLING OPTION FOR NEW OWNERS OR THOSE LOOKING TO EXPAND THEIR CURRENT INVESTMENTS.
When considering such an investment, it is important to evaluate how well it aligns with your goals, your potential to enhance and grow the business, the level of competition, regulatory issues, current profitability, and key risk factors. All these elements play a crucial role in assessing the fair market value of the business.
Thorough analysis of these factors is essential for effective due diligence and for negotiating the terms of the purchase.
Additionally, it’s vital to consult with legal and accounting professionals before making any formal offers.
Despite the challenges involved, purchasing an existing business can enable you to quickly establish operations and avoid many of the obstacles associated with starting a new venture from scratch.
Selling your business

THERE ARE MANY GOOD REASONS WHY SOMEONE MIGHT CHOSE TO SELL AN EXISTING BUSINESS.
These can range from wanting to explore new opportunities, facing financial difficulties, planning for retirement, dealing with personal health issues, or needing to spend more time with family.
Regardless of the motivation, it's crucial to ensure the business is ready for sale. This means maximising profitability, having well-documented systems and operating policies, being able to provide accurate financial information to potential buyers, and ensuring that all assets are operational and well-maintained.
The business valuation, which will help determine the asking price, will be significantly influenced by these factors.
Navigating the sale process with prospective buyers can be complex, but with the right support and guidance—particularly in legal and financial matters—it is possible to achieve the desired outcome.
Valuing a business

UNDERSTANDING THE VALUE OF YOUR BUSINESS OR ONE YOU ARE CONSIDERING PURCHASING IS ESSENTIAL TO MAKE SOUND INVESTMENT DECISIONS.
Whether you’re in the process of selling, buying, raising capital, securing loans, reassessing insurance needs, or planning for retirement and exit strategies, understanding the market value of a business is vital financial information that supports informed decision-making.
A thorough valuation examines multiple factors, such as past and current profitability, cash flow, potential for growth, condition and value of fixed assets, systems and technology, competition, entry barriers, risk factors, industry challenges or opportunities, and staffing considerations. This information is analysed alongside comparable sales, prevailing market conditions, and anticipated returns for similar investments, to establish a value.
In the end, the value of any business is dictated by the market—specifically, what a buyer is willing to pay or what you are willing to accept.
The purpose of a valuation is to inform you and facilitate sound decision-making.
Buy and Selling Pitfalls

WHEN BUYING OR SELLING A BUSINESS IT IS ESSENTIAL TO AVOID COMMON PITFALLS THAT CAN ADVERSELY IMPACT YOUR DECION MAKING.
Frequently, the expectations between buyers and sellers regarding the process, information sharing, and pricing can be at odds. This often stems from their different positions rather than any ill intent.
By fostering good faith, maintaining clear communication, and implementing an appropriate confidentiality agreement, both parties can share and request information openly, paving the way for effective negotiations.
This collaborative approach enables buyers to perform adequate due diligence, obtain necessary advice, and sidestep potential pitfalls, which leads to well-informed decisions regarding their offers. For sellers, an informed buyer who has conducted proper due diligence is more likely to be serious, allowing them to focus on the specific terms and conditions of the offer.
The Sale and Purchase Agreement, along with its specific terms, warranties, and obligations, is a critical step before finalising the settlement, ensuring that all conditions have been met by both parties.

Steve has been part of our team for over 15 years and has helped us hugely with both of our businesses. He is now one of our Trustees. We can call on him at any time for some guidance or where needed, and get him involved with things we need more help with.

Brad and Moana Williams, Halswell Butchery and Body Fix Gym
Starting our new business and buying another one was made easy with Steve’s help and guidance. The guidance on how to go about evaluating the business, working out how much it was worth and then negotiating the terms was invaluable.

Stuart McIlwain, Embark Solutions
Steve very quickly impressed us and drove, what at times, what was a difficult development project. His tenacity and attention to detail helped us navigate a path to put the project in a position to be successful.

Julian Bowden, CEO Mainland Football (past)
Steve constantly thinks outside the square, and looks at obstacles as challenges to overcome. He is a clear and logical thinker and is able to impart his wisdom in an open way and with clarity and precision.

Chris Rodda QSM, Retired Board Member, Christchurch Netball Centre
As a consultant Steve is thorough and highly professional. He is also one of the better Directors I have worked with. His financial and commercial background is supported by a rare mix of detail consciousness and big picture strategic thinking.

Stewart Mitchell, retired Chair of NZ Rugby, and Canterbury Agricultural and Pastoral Association

Buying, Selling and Business Valuations

Buying a business

Selling your business

Valuing a business

Buy and Selling Pitfalls

Steve has been part of our team for over 15 years and has helped us hugely with both of our businesses. He is now one of our Trustees. We can call on him at any time for some guidance or where needed, and get him involved with things we need more help with.

Starting our new business and buying another one was made easy with Steve’s help and guidance. The guidance on how to go about evaluating the business, working out how much it was worth and then negotiating the terms was invaluable.

Steve very quickly impressed us and drove, what at times, what was a difficult development project. His tenacity and attention to detail helped us navigate a path to put the project in a position to be successful.

Steve constantly thinks outside the square, and looks at obstacles as challenges to overcome. He is a clear and logical thinker and is able to impart his wisdom in an open way and with clarity and precision.

As a consultant Steve is thorough and highly professional. He is also one of the better Directors I have worked with. His financial and commercial background is supported by a rare mix of detail consciousness and big picture strategic thinking.