Market Report December 2009

 The Great Recovery

The Great Recession has now given way to the Great Recovery. Business confidence is up-globally, nationally and locally. Please see below for statistics in the Sunshine Coast Confidence Survey and forecasts from the boffins for the national and global economies.

On a more localised “business sales” point of view, we are now, at last, seeing some better quality businesses coming on the market, that show resilient trading performances over the last year’s recession. They are priced at around the 25% return on investment (4x) (after a fair owner/manager wage of $100,000 or more) which is what better businesses have averaged over the past 10 years. This risk rate must be compared with other investment risk rates such as shares 6.5% ROI, residential property 5% and commercial property 8%. All these investment opportunities, including businesses, also have long term capital growth of 5-10% p.a. Owning a quality, profitable and growing business also brings a feeling of accomplishment and satisfaction. A business owner can also claim “business” expenses for motor vehicles, communications, travel, entertaining, etc plus meeting many interesting people along the way. All in all you get far more bang for your buck when you buy a quality business.

Getting To Know Our Buyers

We are sometimes asked by potential Buyers why we have such a detailed Buyer Registration Form and Confidentiality Agreement. The reasons for this are many and, believe it or not are all mostly for the benefit of the Buyer.

1. Most Sellers insist potential Buyers are fully qualified prior to releasing detailed information on their business.
2. Sellers and Brokers do not want to waste time with tyre kickers.
3. Fully qualified Buyers will be treated with the respect they deserve.
4. Fully qualified Buyers receive a Just Listed notice on any new listing that fits their requirements.
5. We can educate Buyers in matters of what they can afford to buy, valuations, terms and conditions, referrals to professionals and other business services.
6. The more we know about a Buyer the better we are able to assist them. Nearly all our testimonials from Buyers have come from those that we have met face to face, on several occasions, and have built mutual trust and respect for one another.
7. If we know that a genuine Buyer wants a specific type business in an area/price range we can target something suitable and put a deal together.

Our aim as Business Brokers has always been to sell quality businesses for happy Sellers to happy Buyers who in turn become happy Sellers.

Economic Outlook

Summary of forecasts for 2010 (the year of the Great Recovery) taken from a mix of recent economic reports.

World growth 3%
Asia growth 5.8%
China growth 9%
Australia growth 3.3%

Interest Rates - normalise to 5% by end 2010
AU/USA dollar - top at 1.00 in September
Oil price - continue to rise
Sharemarket - 5300 pts mid 2010