Buy a Business and Be Your Own Boss

Buy a Business & Be Your Own Boss

Buying a business could be the best investment you have ever made. Neil Barker, of Barker’s Business Brokerage, explains why.

The Covid pandemic has presented Kiwis with heaps of surprises, but one of the biggest ones is that more Kiwis than ever are buying businesses because they want to be in control of their own destiny. Despite two years of government lockdowns and negative business policies, Barker Business Brokers is finding that many businesses have done well and have managed to increase their profitability due to smart adaption to the new economic climate. Demand for profitable businesses continues to remain extremely high and business sales now are higher than they’ve been in the past 10 years. There are, of course, sectors that have been negatively impacted, such as tourism and hospitality, but many more businesses are making better than ever bottom lines.

I believe this growth and increased profitability is being fueled by Kiwis not travelling overseas and choosing to spend their money on things like household goods, household renovations, vehicles, and boats. In other words, they’re spending money in New Zealand, rather than overseas.

Many Kiwis have come back from overseas looking for fresh opportunities, which is helping to push up the demand for solid, profitable businesses. We’re seeing general businesses continue to be highly popular and are experiencing keen interest in wholesalers, childcare centers, home-based firms, manufacturing, import, building, contracting, service, and transport businesses. At Barker Business Brokerage, we’ve recently sold a range of general businesses in the NZ$3 million to NZ$30m price bracket. The demand for these businesses is very strong. But there are also buyers for smaller businesses, starting at NZ$200,000. With the border restrictions lifting, the outlook for 2022 is optimistic. We’ve noticed three clear trends: • Most of our business owner clients, prospective clients and contacts have rebounded significantly over the past six months from their past bad yearend results. Even clients in the tourism sector have seen a resurgence in bookings from domestic travellers.

• After their businesses were hit by Covid, some owners have become risk-averse and feel that 2022 is the right time to sell their business. They’re tired of the operational challenges and are feeling pandemic burnout. They want to retire and enjoy the fruits of their hard work.

• With less opportunity for international buyers and

New Zealand companies not able to easily grow overseas, there’s a strong appetite from large New

Zealand companies to buy revenue and earnings through acquisition. With such significant demand out there, brokers are often seeing competing offers for some businesses.

Interested in buying or selling?

Barker Business Brokerage has a Complete Client Guide to help you understand how it adds value to your business sale and makes selling your business easier, available at info@barkerbusiness.co.nz. If you’re interested in a buying a business, go to www.barkerbusiness.co.nz and check out the listings. Neil Barker says: “We love helping people to reap the benefits of their business-building efforts, and we enjoy helping others to aspire to business ownership. “We are business sales specialists. Our focus is to get you the best possible price on today’s market.”

Why DIY When a Broker’s the Expert?

As businesses grow, their insurance needs become more complex, says Chris Brophy of Vero. He says a business that’s expanding should consider using a broker.

Many small and medium-sized business owners (SMEs), especially younger age groups and those just starting out, think insurance for their business is easy enough to DIY. Some think dealing with a middle man might be more complicated, expensive or that there aren’t any real benefits to using a broker compared with a simple online platform. But Vero's annual SME Insurance Index research shows that small business owners who do use a broker are getting access to expert support to help assess their risk and get the best cover. But is it right for your business to use one? Many factors can affect whether SMEs use a broker or try to go it alone. Vero's research shows that the majority of small business owners prefer to use a broker, particularly larger sized small enterprises or businesses that are growing or changing, which often have more complex insurance needs.

Expert advice in a changing world

Owners are increasingly seeking advice on what a changing business needs, especially after seeing the effects of Covid-19 on their companies. Covid-19 has changed the risk landscape significantly, and even early in the pandemic, 79 per cent of New Zealand businesses reported that they were making changes to their businesses due to its impacts. They might have temporarily closed their premises, shifted to remote work or adjusted staff levels. These all have an impact on the risk profile of a business. As companies recover and grow, they might have more employees, more vehicles, larger premises containing more equipment, and have higher income at risk. We find that businesses using a broker report being more likely to feel they have the right cover and actually review their insurance needs, rather than just ‘set and forget’.

Too busy

Many owners find themselves time-poor, especially if their company is growing, with the stresses of managing staff, clients and contracts. Researching insurance cover takes time and energy away from your core business. A broker will do an assessment of your needs and then go away and provide recommendations and prices for the cover you require.

Satisfaction with claims

Should the worst happen and you need to claim on your policy, that’s when the advice and support your broker has provided really comes into its own. From supporting you with claims paperwork to following up with your insurer, they’re on your side. You’re also more likely to have had support with risk assessment and cover decisions, with 74 per cent of broker clients saying they received advice from their broker last time they renewed their insurance, compared to direct buyers where one in three simply renewed their insurance without reviewing it. This means broker clients are more likely to have the right type and level of cover in place before they need to claim, which makes claims experiences more satisfying – 73 per cent of brokers clients who have made a claim are satisfied versus 55 per cent of direct buyers.