The bulk of the Christmas holiday season is behind us and Auckland traffic has returned to normal levels. All in all though everyone I have spoken to so far in 2013 seems positively upbeat. This time last year everyone was bemoaning the fact that there hadn't been any sun at all in January and that their holidays were over for the year.
The 2012 calendar year was a tumultuous one for Switch Business. Went from David and Paul (funny that is what a branding company wanted us to name Switch when we started), to just David with Paul being diagnosed with Cancer. Nicollette, my daughter, has joined to keep me company but the company itself is not the same without PD.
We got through a few deals though late in the year. Have a couple of acquisitions as well so onwards and upwards.
There were the obvious frustrations that popped up during a couple of transactions. Possibly the most ludicrous though was a lawyer acting for the Vendor (our mutual client) advising said vendor that there was no requirement for him/her to agree to anything more than a 90 day restraint or trade on a business that was 100% goodwill and with owner being a market leader in the field. It goes without saying that that transaction didn't progress. Worst part of it was the lawyer would give no-one any reasoning for his stance.
One of the transactions that we completed late in the year highlighted a change in approach of how the Financial Institutions view business lends within the current economic climate. The banks appear to me to be delving deeper into the business than they previously had, looking to gain a better understanding of factors impacting cash-flow. This seems like a no-brainer but in times past they might just have gained comfort with debtors and creditors, they now need a lot more in-depth information for their credit applications. This means the banker you deal with has to be more experienced to be able to present the more complex requirements requested from the credit department. So if you are buying a business and you need finance it would be my recommendation not to just deal with a banker who answers the phone when you call but seek a referral for someone who gets deals done.
We have also over the last 12 months set up an agency agreement with Global Franchise Partners in Sydney. Their speciality is to facilitate Franchise companies’ expansions worldwide. This agreement means we have numerous Master Franchise and franchisee opportunities available at present. We will be spending a lot more time in this category because I think it is a real growth area of the market. Any NZ Franchisors that have aspirations to grow their business outside of NZ, GFP would be the first port of call.
It is Mid-February already and we have sold most of the businesses we have listed. Any owner looking to exit their business, this time of the year is as good a time as any with financial year end soon upon us.