Market Report October 2008

15 Oct 2008

Despite all the worrying global news and the counter moves by governments there are still positive Buyers enquiring, inspecting, making offers, going to contract and settling on businesses.

Our Buyers report that there are very few decent businesses on the market at the moment across all brokers. The reason for this is that older owners of quality businesses, that might have planned to retire this year, are holding on to their business in order to boost their depleted superannuation funds. The result of this is that once the economy has settled down there will be a flush of retiring owners wanting to sell. We all hope that our government's policies will save our strong economy and all will be back to normal shortly.

FINANCE

Although the interest rates have reduced by 1% and will probably continue to fall over the next 18 months, finance will be harder to obtain from cautious lenders. Buyers should shop around for the best deal. We can recommend experienced and helpful finance brokers and bank managers located throughout the coast.

SHOPPING CENTRE RENTS

Lately, we have been receiving many “help me” calls from business owners located in shopping centres. Many retail businesses are suffering from reduced sales and high rentals resulting in a loss making enterprise. We regret that we do not have a magic wand and sadly many owners will be forced to close down.

Rents should reflect the earning capacity of the average business therefore landlords will need to accept reduced rentals otherwise they will be faced with empty premises. Sensible landlords should accept rent freezes or reductions in these tough economic times. It is far better for a landlord to have a viable tenant than to have empty premises.

HOT BUSINESSES

We are currently talking to owners of businesses in the solar power and water conservation industries that seem to be booming at the moment. These eco friendly, government supported industries would have to be a good investment. If you would like to know more please contact our office now.

On a lighter note, there is always a way to make money. Here's one ………

POTATO ENTREPRENEUR
Several years ago there was a severe potato shortage in Iraq. An entrepreneurial businessman made millions out of the situation. He rented a number of large warehouses, then advertised a competition inviting people to send him potatoes. The reward was a $10,000 pri