To get the most for your business when you sell, you need to understand how buyers perceive risk and how you can avoid some of the mistakes business owners make by not following the cycles. This simple video looks at four main risks in the business sale and how to reduce the effect . We also look at the cycles all businesses go through and how you can ride those cycles to your advantage.

1. THE
RISKS AND CYCLES OF
BUSINESS
SALE

2. Economic Risk – Risk that is associated with
fluctuations in the economic cycle. One can
graph the peaks and troughs of business
activity, keeping an eye on trends in business
and consumer confidence, interest rates and
growth patterns.
RISKS ACCORDING TO BCI

3. RISKS ACCORDING TO BCI
Industry Risk – Risk relating to a particular
industry. This can be due to technological change
or anything specific to that industry. It focuses on
external not internal factors of the business. Such
industries impacted recently include the music
industry, publishing, video stores, photographic
finishing and the like and even wholesaling.

4. Personal Risk – Risk associated with the investor
looking to invest in a business in which he or she will
play an operational role. It can relate to age, health,
stage in life & personality of the investor. It also relates
to the needs the business will place on the operator
and the ability of the operator to meet those needs.
RISKS ACCORDING TO BCI

5. Legislative Risk – Risk associated with
investing in a business that is prone to change
due to government legislation pertaining to that
industry. Such businesses have included
newsagencies, training organisations, child
care institutions, liquor shops and hotels.
RISKS ACCORDING TO BCI

6. Every one of these risks can be measured and
accounted for by paying attention to the cycles that all
businesses move through. We may not be able to
predict the future but we sure can have a better guess
if we are informed and watch the trends.
RISKS AND CYCLES

7. The Economic Cycle. Chart and watch the movements
in Interest Rates, Consumer Confidence, Stock Market
Indices, Business Investment plans and you will soon
see where we are in the cycle. You don’t buy at the top
of the cycle and don’t sell at the bottom. Sell just before
the top and buy just after the bottom. Or close to it.
RISKS AND CYCLES

8. The Industry Cycle. This closely follows technology and
the changing tastes of people. Look at what has faded
and disappeared into history. Why did it happen? What
can you learn from that? Is your industry threatened by
any change on the horizon? Are people’s habits
changing? Does change appear to be long term?
RISKS AND CYCLES

9. Your Personal Cycle. You will or have reached your
peak. Your enthusiasm of early years gives way to
experience & wisdom. You want to be selling when
there is still an ability to hand over the business and
transition the buyer on the road to prosperity. You want
to be in sell mode before your stamina and health wane
RISKS AND CYCLES

10. The Legislative Cycle. Governments legislate according
to perceived inequalities or to gain advantage over their
opponents. At times certain things like education or
child care take prominence & you can see legislative
change coming. The chatter starts before the laws
change. Listen to the chatter & act ahead of the game
RISKS AND CYCLES

11. BCI Business Brokers
Tony Arena (Managing Director)
3/1 Alexander Street, Crows Nest, NSW, 2065
Phone: +61 2 9439 3399
Mobile: +61 411888148
Email: tarena@bc.com.au
www.bc.com.au
For Advice On Business Valuation

12. For A Free Consultation On
The Value Of Your Business
Visit our website:

13. For help in maximising your business value
take a look at our product here
www.bc.com.au/maximise.html
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