Chris J Reed’s Post

My Top 5 Financial Indicators of 2024 5. Sales. Compare this year against last year, this quarter against last quarter, this month against last month. Look for trends. Look for ways to improve. Look for an edge. Prediction. Sales will be tougher to achieve in 2025, so put your plans in place to create them! Get creative. Get sales training for your staff. 4. Gross Profit. (GP) We love GP. It’s what’s left after paying suppliers. It shows up any blowouts in your Cost of Sales. It also shows if you’ve been discounting. Prediction. Discounting will be one of the popular (lazy) ways to generate sales. But it has a devastating impact on GP, so resist it at all costs! 3. Wages. Possibly one of the most important measures to manage. Compare against prior periods. Show as a % of sales for greater insight. Prediction. Staff cutbacks will occur in 2025. Productivity gains will be key. 2. Net Profit. The true test of how you’re performing. Compare against last year and last quarter. Check how it’s trending. Prediction. Net profit will be a challenge to achieve in 2025. 1. Current Ratio. My Number One measure for 2024. This is a key measure of liquidity and you need to be all over this. It’s an indicator of your cash position and what your short term cash position will be. Prediction. Cashflow will be the number one issue in 2025. Your business can survive on very low profits, but it simply stops if you don’t have cashflow. Do what you can to free up cash, go hard collecting your debts and don’t burn cash on stupid purchases 😄 #financialindicators #ratios #franchise #franchisebusiness #thefranchiseaccountant #cashflow #profitability

BizBuySell Q2 2024 Insight Report is live https://bit.ly/3YalTRY which gives you a detailed overview of how the business-for-sale market is progressing. Here’s a few highlights: ▶️ Transactions grew 5% over the past year and 3% from last quarter, now matching 2019’s pre-pandemic levels. ▶️ Median Sale prices are up 25%, service sector prices are up 17%, and manufacturing prices are up 31% ▶️ 42% of business buyers surveyed say performance is most important, followed by growth and location ▶️ Over a third (34%) of owners say performance has improved since last year, with 58% crediting an increase in customers.

Another fantastic report from BizBuySell. The Q2 Insight Report shows a strong trend in small business acquisitions with a 4.8% increase in transactions year-over-year. Median sale prices have reached record highs, driven by increased buyer demand and operational/financial stability, making a favorable market for both buyers and sellers. If you are considering an exit or looking to purchase a business, I highly recommend reviewing this report. #smallbusiness #businessacquisition #smb #businesstransactions #mergersandacquisitions #businessbrokerage

The September 2024 Business Sales Quarterly Report is out, and the numbers are looking impressive! Whether you're buying, selling, or just keeping an eye on the market, there’s a lot to celebrate (and talk about). Let’s dive into the key highlights shaping New Zealand’s business sales scene right now. 🔥 Record-Breaking Demand! New Zealand’s business market is hotter than ever! Demand has skyrocketed with a jaw-dropping 22,404 confidentiality agreements signed in the past 12 months. That’s a massive 45% increase from the same time last year. More people than ever are looking to buy, and the competition is fierce. 📈 Sales Volumes Are Up The surge in demand isn’t just talk—it’s leading to action. Business sales volumes have jumped 8%, with 400 business sales completed by September 2024, compared to 369 in the previous year. More deals are getting done, and sellers are cashing in on this momentum. 💰 Business Prices Are Rising For the first time in 18 months, we’re seeing significant movement in business prices. The average business price has shot up by 5%, now sitting at $874,182 as of September 2024 (up from $831,329 last year). That’s a big jump, and it’s not by accident. 🏆 A New Record – Highest Average Business Price Ever We’re officially in record territory! The new average business price of $874,182 has overtaken the previous high of $868,102 set in December 2022. What’s driving this? The growing demand for high-quality businesses. With more buyers in the mix, many businesses are attracting multiple offers, pushing sale prices higher than ever. 📊 What’s Behind the Trend? There’s a perfect storm brewing in the market: Unemployment levels are up, which means more people are looking to buy businesses and be their own boss. Interest rates are falling, with more cuts expected, making it easier for buyers to finance their purchases. These factors suggest we could see business prices continue to climb in the short to medium term. If you’ve been thinking about selling, this could be your golden moment! Want to Dive Deeper? Here's the full report: https://lnkd.in/gT7uV8DW This report is packed with insights into New Zealand’s current business sales landscape. Whether you’re curious about sales volumes, price trends, or the types of businesses attracting the most interest, the report has it all.

How many offers do businesses REALLY get when they sell? New Q3 2024 data reveals surprising trends. The latest Market Pulse survey shows larger deals are attracting significant buyer interest. Here's the average number of offers by deal size: 📊 5M−50M deals: 5.18 offers per business 📊 2M−5M deals: 2.67 offers per business 📊 1M−2M deals: 2.42 offers per business 📊 500K−1M deals: 2.15 offers per business 📊 Under $500K: 1.28 offers per business Here's what's interesting… While advisors aren't bullish on valuation increases yet, there's optimism for 2025. Why? Expected Fed rate cuts should make financing more affordable. Potentially driving up demand and valuations in the lower middle market. Want the complete analysis of current market conditions? Download our free Q3 2024 Market Pulse Report! 👉 https://lnkd.in/gYb8sCpa

Not sure if it is the right time to sell given the current market and political climate? A brief outline...Part 2 Market Trends for Selling Businesses with Under $50 Million in Revenue Selling businesses with revenues under $50 million involves unique dynamics compared to larger transactions. Here are some current market trends and factors influencing this segment: **5. Industry-Specific Trends Healthcare: Healthcare services and businesses related to health and wellness are experiencing strong interest due to the ongoing focus on health and aging populations. Consumer Goods: Businesses in the consumer goods sector, especially those with strong brands or unique product offerings, are attracting buyers interested in capitalizing on consumer trends. Sustainability: Companies with sustainable practices or those involved in green technologies are increasingly appealing to buyers focused on environmental, social, and governance (ESG) criteria. **6. Buyer Preferences Turnkey Operations: Buyers are looking for businesses that offer a "turnkey" operation with established systems, processes, and a stable customer base. Businesses with a clear path to scalability are particularly attractive. Management Teams: Well-established businesses with experienced management teams are preferred. Buyers often seek businesses where the current management is willing to stay on for a transition period. **7. Transaction Structures Flexible Deal Structures: There is a growing trend towards flexible deal structures, including earn-outs, seller financing, and equity rollovers. These structures can help bridge valuation gaps and align interests between buyers and sellers. Asset vs. Share Sales: The preference for asset sales or share sales can vary. Asset sales are often preferred for certain industries due to liability and tax considerations, while share sales may be favored for others. **8. Regulatory and Compliance Considerations Regulatory Changes: Buyers are increasingly aware of regulatory compliance and potential risks. Businesses with a clean regulatory record and robust compliance practices are viewed more favorably. Due Diligence: Comprehensive due diligence is crucial. Buyers are thorough in assessing financial, legal, and operational aspects of the business to mitigate risks. Conclusion The market for selling businesses with revenues under $50 million is dynamic and influenced by various factors including economic conditions, industry trends, and buyer preferences. To successfully navigate this market, businesses should focus on demonstrating strong financial performance, leveraging technology, and being prepared for flexible transaction structures. For sellers, working with a knowledgeable business broker who understands these trends can provide valuable insights and help achieve the best possible outcome in sales process. Contact me for confidential dialogue on what is next. [email protected] #smallbusiness #financialplanner #businessattorney

According to a survey by BDO UK, 70% of buyers place high importance on a business’s profitability and cash flow stability when deciding to make an offer. Other key factors include: 40% of buyers are focused on the strength of the management team, highlighting how crucial it is to have a reliable team in place. 35% prioritise growth potential, so if your business shows signs of scaling, you’re more likely to attract higher offers. Businesses with strong customer retention rates saw a 20% increase in sale value on average. These stats highlight that buyers are primarily looking for stable, profitable businesses with growth potential and a strong team. By focusing on these areas, you can make your business much more appealing to potential buyers. Is your business attractive to buyers? Let’s evaluate and increase your business’s appeal to ensure you get the best possible offer. #BusinessStats #BusinessSale #EntrepreneurWisdom #BuyerPriorities #BusinessGrowth #SellYourBusiness #BusinessValue

In today’s market, businesses are facing a number of challenges that are impacting their cash flow. SaaS vendors are experiencing push back in the sales process against “annual up-front” payments. Customers are asking for monthly plans. Interest rates are rising, and inflation is on the rise as well. This combination is making it increasingly difficult for businesses to maintain their cash flow and meet their financial obligations. In this post, we’ll take a closer look at why businesses are struggling with cash flow in this market, and what they can do to manage these challenges. Interest Rates are Going Up One of the biggest challenges that businesses are facing in today’s market is rising interest rates. The Federal Reserve has been raising interest rates in response to a strong economy and low unemployment, which has led to an increase in borrowing costs for businesses. This can make it more expensive for businesses to borrow money to finance their operations or invest in growth initiatives. Additionally, businesses that have variable-rate loans or credit lines will see their interest payments increase as rates go up. https://lnkd.in/ejF9TAjp #finance #saas

In today’s market, businesses are facing a number of challenges that are impacting their cash flow. SaaS vendors are experiencing push back in the sales process against “annual up-front” payments. Customers are asking for monthly plans. Interest rates are rising, and inflation is on the rise as well. This combination is making it increasingly difficult for businesses to maintain their cash flow and meet their financial obligations. In this post, we’ll take a closer look at why businesses are struggling with cash flow in this market, and what they can do to manage these challenges. Interest Rates are Going Up One of the biggest challenges that businesses are facing in today’s market is rising interest rates. The Federal Reserve has been raising interest rates in response to a strong economy and low unemployment, which has led to an increase in borrowing costs for businesses. This can make it more expensive for businesses to borrow money to finance their operations or invest in growth initiatives. Additionally, businesses that have variable-rate loans or credit lines will see their interest payments increase as rates go up. https://lnkd.in/ejF9TAjp #finance #saas

In today’s market, businesses are facing a number of challenges that are impacting their cash flow. SaaS vendors are experiencing push back in the sales process against “annual up-front” payments. Customers are asking for monthly plans. Interest rates are rising, and inflation is on the rise as well. This combination is making it increasingly difficult for businesses to maintain their cash flow and meet their financial obligations. In this post, we’ll take a closer look at why businesses are struggling with cash flow in this market, and what they can do to manage these challenges. Interest Rates are Going Up One of the biggest challenges that businesses are facing in today’s market is rising interest rates. The Federal Reserve has been raising interest rates in response to a strong economy and low unemployment, which has led to an increase in borrowing costs for businesses. This can make it more expensive for businesses to borrow money to finance their operations or invest in growth initiatives. Additionally, businesses that have variable-rate loans or credit lines will see their interest payments increase as rates go up. https://lnkd.in/ejF9TAjp #finance #saas