Articles by Troy Eichelberger

Humanity and our environment are going through historically important changes, which we need to navigate more carefully. Technology can leave you vulnerable, but it is not the only challenge we face in business today. I grew up prior to computers and the internet, we had no mobile phones. What we had, was a much simpler version of now. It offered us certain benefits – TRUE, quality leisure time was one of those. We never had to check emails or text messages; things just had to wait for us to get back to work. Today, our leisure time is not comparable to pre internet and mobile phones. Your brain does not get the same opportunity to go into rest mode. Gadgets constantly require our input and attention. Technology has spread itself across our existence like a huge fishing net – and it can be highly irritating. Fake news, cyber crime, hacking, clickbots etc, are all new challenges that business until recent years had never heard about. These new area problems can ruin businesses that have become a target. Anti Virus software will not be a match to the latest hacking tools. There is a need for diversification in the offering of small business, to align with the changes to our lifestyle over the last 10 years. Pioneers and Innovators are needed in small business today, not just in the corporate sector. We have an increasingly unwell society and an increasingly unwell planet. Todays’ children do not get the physical exercise we once did. Yet, physical exercise is mandatory for a healthy brain development. The brain develops with exercise, as exercise stimulates the cerebellum in the brain. A business focusing on the shortcomings we experience today, would make an ideal ethical choice. How will it perform financially? Always run a feasibility study when you put your finances at stake. The quality of our supermarket food products has deteriorated. Preservatives and traces of many poisonous chemicals are found in the majority of what we put into our mouth each and every day. What has all that got to do with your urge to buy a business? Everything! You have to adapt to current needs and market factors. What was an appropriate indicator for a good business 5 years ago, may no longer be of any relevance today. I always remind people of the Kodak collapse. One of the worlds best known brands until the mid to late 1980’s. Yet, new technology wiped it out almost overnight. Looking for a business opportunity, evaluate the lifestyle impact of your decision. Will you have weekends to yourself, or does the business require a weekend roster? How do you feel about the product or service you will be dealing in? Does it meet your ethical standard? What is the industry growth forecast? Can I add services or products to the business to suit my location? Does my purchase contract prevent me from certain add on idea’s? Is the lease secure and fair value? What about the financial investment that you are about to commit? Have you allowed for all costs, including some initial operating cashflow to cover the first six months? Worked out all wages, taxes, utilities and other trade associated costs? The business that you are most likely to succeed in, is the business that you actually have a passion for. It may not be the style of the business, but the opportunity to grow a small business into a bigger business with a new idea. Most business buyers assume they can do things better than the current owners. This often rings true, as the current owners may just have had enough and have shown little love for the business of late. Just don’t jump in blind, the current owners may know something that may impact the business in future. Do your due diligence prior to the purchase and make it all inclusive. Leave no stone unturned. Finding a flaw with a business is not a bad thing. It may be the best buying opportunity. As long as you are confident that you can work around the existing flaw, you may pick up a bargain. In many fields, workplace security has dramatically declined and wage growth has been non existent since 2009. Being successfully self-employed can offer you, more job satisfaction, more job security and leaves you less vulnerable to loss of income. Many small businesses fail in their first year. Should that worry you? NO! This fact simply should alert you to the potential pitfalls and help you avoid mistakes made by some of the failed businesses. Owning a business can bring a certain feeling of freedom with it. It is your chance to find your calling and grow to financial success. It can also be the mistake that took away the family home. Don’t over commit yourself. Don’t be afraid of the new skills you may need to learn, just make sure they are skills that you are not afraid to learn. Create a business buying strategy, similar to planning your life. Don’t treat your business purchase as a separate entity, see if it can enrich your dreams and compliment your life goals. Use the internet to research your potential business purchase. Search the actual business and see if there are “independent” news articles or reviews, these may provide a clearer picture than the one you may be presented with by the seller. Once you found the right business, having done your research, just try and run it the best way anyone could run such a business. Put your shine on it, its not just an income producing vehicle – the business now is simply relying on you. Enjoy the ride and live your dream. Run it like an athlete, always aiming to improve performance. As an Insolvency advisor and business owner, I have seen more cases of business going bad than most people. Good operators and good businesses are not spared from unfortunate circumstances. We can’t fool proof everything, but we certainly can take many measures to reduce risk. The vast majority of insolvency cases are not made up of good operators, but often those who have over committed and perhaps those who have a lack of understanding of  what it takes to run and grow a business. If you need help to purchase or sell a business, feel free to contact me initially via email, outlining your situation. Troy Eichelberger Email [email protected] or visit http://a1debtassistance.com.au

  Many small and medium sized businesses experience regular cashflow problems. It is more common than you may think and it becomes a balancing act, or a poorly choreographed juggling attempt. A clear head is the number one ingredient, not yours, your thinking is hampered by stress. You need someone that offers substantial business experience and sound advice. Don’t look at the usual suspects for support. No job can match the business experience you gain in the insolvency sector. Financial Crisis is what we deal with and learn from with every new case. As an insolvency consultant, I see first-hand what can go wrong. I also often get to learn what would have made a difference, but by now it is too late. This is frustrating, knowing so much of financial pain could be eased or avoided altogether. Not all insolvency consultants focus on helping clients avoid insolvency. A1 Debt Assistance does, as I lost my chain of retail stores during the Keating recession. I now help others avoid my mistakes. You need to expand your horizons.  There are a multitude of reasons for your business to experience challenges. Often these are not obvious until the business undergoes a due diligence process. Don’t have your first due diligence as part of the sale of your business. This is likely to turn into the purchaser being able to walk away from the deal. Run your own check, or get help. Address the issues and establish which ones you can fix and which ones you can’t fix. How would this situation look under a new ownership? Can we turn weakness into strength? Is it your personal debt that is dragging down the business? There are solutions and under some circumstances you may be able to go bankrupt and still operate your business. Freeing up cashflow. Be honest when you sell After losing my small chain of 5 retail stores, I ended up in Commercial Real Estate – selling businesses. I was shocked when going through the listings. Many business listings, with substantial asking prices had no more than junk value. The prices reflect the owners financial needs to get out, not the value of the business. Don’t let your business become such a listing. I started to help struggling business owners who had nothing to sell, to turn things around and stay in business or finally be able to sell. Buyers need to know if it’s a basket case and the asking price needs to reflect this. This does not stop you from selling, it stops you from cheating. Don’t ruin someone else in the process. The No-Go zone. Basket Case and over-priced.  The figures must stack up so the buyer can borrow against the business.  A cash buyer is rare. Whenever it seems’ a buyer is ready, the accountant or the bank manager will pull the plug. Due diligence is there for a reason. I never understood why agents would even run with shonky listings. Fix them first and you actually have something to sell. What are your options?  At A1 Debt Assistance we receive calls from business owners ready to enter into some form of insolvency. Often, we help them avoid this. We approach it similar to a due diligence process. Our motivation is to detect the main culprit causing your business problems and develop remedies. A purchaser does not have the same overheads than the current seller. This relates to existing car loans, business loans, over drafts etc – all such figures are called add backs. Running through this process will tell you if you have a business that could be viable to a particular purchaser. It also will determine your asking price. For tax reasons we are encouraged to make business purchases on finance and use the finance costs as write downs. Unfortunately, when the turn over drops, your repayments remain. The tax saving is now killing your business. There are insolvency options that may actually help you, whilst still being able to keep your business. How does this help you to sell your business? People generalise things and overlook the detail. To establish your best sales options for a difficult business, get someone that has the skill to look at the detail. Numbers tell a story, they don’t just add up. Get professional help to decipher the story for your business. Different buyers have different reasons to purchase a business.  Your business may have major flaws, but someone does put value to certain parts. This could be your data base, or a contract that is not viable under your structure. It could well be managed effectively by a larger player. Your store could be in an ideal location, just not for your type of business. Sell the lease to the right business or chain. Once you understand the true selling points, you get a better understanding of who the likely buyer is. Don’t let them know they are your last hope! Now you can create your hit list of targeted buyers. You have approached a competitor and they are interested. Trust me, they will find out how tough it is for you. Their approach will likely be the waiting game. They are not paying, they just wait for you to close the doors and they are on the phone to the landlord – taking over your goodwill for nothing. Why advertising the sale of your business is so important? To avoid the above scenario. Your buyer should fear they could miss out. You could be dealing with multiple buyers. This will give you a much greater chance to sell your business and get the best possible price under the circumstances. Create the balance of supply and demand.   If you need help with your business – feel free to contact me via email [email protected] or visit my website www.a1debtassistance.com.au.