Business Bookkeepers Queensland

Business Bookkeepers Queensland
Business Bookkeepers Queensland
Financial Services-UNDERWOOD, QLD
Financial Services-Underwood, QLD
Post all transactions including bills, payments and journals Scan all documents and save to clients secure Cloud Storage Reconcile all bank accounts, credit card accounts, and loan account..
8 / 130 Kingston Road, Underwood, Qld, 4119.
8 / 130 Kingston Road, Underwood, Qld, 4119.
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Post all transactions including bills, payments and journals Scan all documents and save to clients secure Cloud Storage Reconcile all bank accounts, credit card accounts, and loan accounts on a monthly basis End of month reports sent to client; P&L, Balance sheet and others as requested
Five opportunities for potential improvement
If you are considering selling your business sometime in the future there are several improvements to the operation of your business that will make it an attractive opportunity.
In our experience, there are a number of common opportunities that we see in businesses which impact their attractiveness to buy. If you are a buyer looking for your next acquisition, here are the top five ways you can reduce your risk and maximise your return:

Poor use of the owner’s time, often on activities that are best delegated to specialists or better qualified staff and this can include activities such as sales or bookkeeping, or any part of service delivery or administration. If a business owner is locked in as a technician in the business, its highly likely to affect growth prospects, efficiency of the business, create bottlenecks and be an impediment to sale.
Over reliance on ‘old’ marketing techniques (eg print marketing, business directories etc.) and no testing of or use of new techniques (eg online/web/Google). Quite often the cost benefit of utilising something like Google AdWords far outweighs the tens of thousands of dollars spent on print media advertising.
Inappropriate building use (eg too much floor space or wrong location). Some businesses are locked into the decisions they made 5 or 10 years ago and the choice of premises and location is just such a case. Buyers can look for opportunities created by relocation of the business or consolidation of premises space. In some cases, the business location is the single most significant advertising the business can conduct.
Under performing staff and reluctance of the owners to replace or recruit new staff. The cost of keeping under performing employees staff can be substantial but many business owners stick with the same team regardless of performance or attitude. Getting your team right can be very hard work, but ultimately it can be extremely rewarding.
Critical reliance on one supplier and/or one customer. This can be the single most substantial risk in a business and we do see both customer and supplier relationships that constitute over 50% of turnover and if they are not assigned to the buyer, the value of the business can be decimated.
As your bookkeeper we are not in a position to advise you on the implementation of improvements in your business however we can recommend various business improvement advisors that may assist you in preparing your business for sale

As specialist business brokers, we are not in a position to advise our clients on the implementation of improvements in areas such as these. However, realising these benefits is not easy. If it was, the opportunities would have been taken by business owners already. We rely on close relationships with quality advisors such as Chris Neve at Millstream Consulting and others.

Why understand valuation theory
Every business owner is concerned with the inherent value of their business and what they can do to increase the value over time.  The challenge comes from the complexity in valuation terms and approaches and opinions.  There can be significant inconsistency in valuation opinions and that can be dangerous for business owners who are planning for large changes such as further business investment, the sale of their business or even their retirement.

Valuation vs Appraisal (Opinion of Selling Price)
Unlike Plant and Equipment Valuers or Property Valuers, there is far less formal or recognised certification or accreditation for business valuation. The AIBB has introduced the Registered Business Valuer accreditation but this is yet to be formally recognised in legislation but is being recognised by the courts and insurance companies and other stakeholders.  In most cases, the most useful interpretation of the word “value” is related to the “Market value” of the business.

Understanding Business Earnings

Historical vs Forecast Earnings
Most assessments of value refer to the term “Future Maintainable Earnings” but does that mean that forecast earnings are a better indicator of value than historical earnings?

The above rules apply just as easily to Forecast Earnings as they do to Historical Earnings. Typically, Forecast Earnings can be very unreliable. Even large organisations and listed public companies with teams of accountants and other experts often misjudge forecast earnings! So as a basis for assessing smaller businesses, it is highly recommended that you rely mainly on proven historical earnings and use any forecast provided as a basis for evaluating the future risk and growth opportunities in the business.

Refer to our Guidance Notes on Valuation Methodologies for more detail about what to do once you have clarity on the Business Earnings and dont hesitate to Contact us for more information or assistance on Understanding Business Earnings.

Analysis of Business Risk and Opportunity

Businesses are often valued and acquired based on a multiple of earnings and the multiples typically based on three factors
the inherent risk and opportunity in the business
market evidence, typically completed business transactions with similar charateristics
the competitive forces and balance of buyer and seller motivations
The key analysis for all buyers and sellers to perform during due diligence is around the risk and opportunity in the business: To understand this, you should consider the following levels of analysis:

The broader economic environment
Industry specific factors including the industry and product life cycle
Business risk framework identifying the potential risks and hazards
Business strengths and weaknesses
Ultimately the alignment of the particular business against the strengths of the buyer
There are probably a thousand books written on each of these subjects. Here is a snapshot of the analysis we use to underpin our valuation of small to medium businesses.

Broader Economic Environment
Consider the impact of factors such as interest rates, consumer confidence, exchange rates, unemployment. Where is the economy at? Where is it going?

Peak to contraction: GNP, industrial production and capacity utilisation falls, labour productivity increases and unit labour costs decrease.
Contraction to trough: CPI falls, retail sales decline and unemployment rises. Also, housing starts to fall, home lending falls and consumer sentiment decreases.
Through to expansion: CPI falls which results in interest rates falling and consumer real income, consumer sentiment and consumer demand increasing (i.e. car sales, consumer credit and retail sales increase, and housing starts to increase).
Five opportunities for potential improvement
If you are considering selling your business sometime in the future there are several improvements to the operation of your business that will make it an attractive opportunity.
In our experience, there are a number of common opportunities that we see in businesses which impact their attractiveness to buy. If you are a buyer looking for your next acquisition, here are the top five ways you can reduce your risk and maximise your return:

Poor use of the owner’s time, often on activities that are best delegated to specialists or better qualified staff and this can include activities such as sales or bookkeeping, or any part of service delivery or administration. If a business owner is locked in as a technician in the business, its highly likely to affect growth prospects, efficiency of the business, create bottlenecks and be an impediment to sale.
Over reliance on ‘old’ marketing techniques (eg print marketing, business directories etc.) and no testing of or use of new techniques (eg online/web/Google). Quite often the cost benefit of utilising something like Google AdWords far outweighs the tens of thousands of dollars spent on print media advertising.
Inappropriate building use (eg too much floor space or wrong location). Some businesses are locked into the decisions they made 5 or 10 years ago and the choice of premises and location is just such a case. Buyers can look for opportunities created by relocation of the business or consolidation of premises space. In some cases, the business location is the single most significant advertising the business can conduct.
Under performing staff and reluctance of the owners to replace or recruit new staff. The cost of keeping under performing employees staff can be substantial but many business owners stick with the same team regardless of performance or attitude. Getting your team right can be very hard work, but ultimately it can be extremely rewarding.
Critical reliance on one supplier and/or one customer. This can be the single most substantial risk in a business and we do see both customer and supplier relationships that constitute over 50% of turnover and if they are not assigned to the buyer, the value of the business can be decimated.
As your bookkeeper we are not in a position to advise you on the implementation of improvements in your business however we can recommend various business improvement advisors that may assist you in preparing your business for sale

As specialist business brokers, we are not in a position to advise our clients on the implementation of improvements in areas such as these. However, realising these benefits is not easy. If it was, the opportunities would have been taken by business owners already. We rely on close relationships with quality advisors such as Chris Neve at Millstream Consulting and others.

Why understand valuation theory
Every business owner is concerned with the inherent value of their business and what they can do to increase the value over time.  The challenge comes from the complexity in valuation terms and approaches and opinions.  There can be significant inconsistency in valuation opinions and that can be dangerous for business owners who are planning for large changes such as further business investment, the sale of their business or even their retirement.

Valuation vs Appraisal (Opinion of Selling Price)
Unlike Plant and Equipment Valuers or Property Valuers, there is far less formal or recognised certification or accreditation for business valuation. The AIBB has introduced the Registered Business Valuer accreditation but this is yet to be formally recognised in legislation but is being recognised by the courts and insurance companies and other stakeholders.  In most cases, the most useful interpretation of the word “value” is related to the “Market value” of the business.

Understanding Business Earnings

Historical vs Forecast Earnings
Most assessments of value refer to the term “Future Maintainable Earnings” but does that mean that forecast earnings are a better indicator of value than historical earnings?

The above rules apply just as easily to Forecast Earnings as they do to Historical Earnings. Typically, Forecast Earnings can be very unreliable. Even large organisations and listed public companies with teams of accountants and other experts often misjudge forecast earnings! So as a basis for assessing smaller businesses, it is highly recommended that you rely mainly on proven historical earnings and use any forecast provided as a basis for evaluating the future risk and growth opportunities in the business.

Refer to our Guidance Notes on Valuation Methodologies for more detail about what to do once you have clarity on the Business Earnings and dont hesitate to Contact us for more information or assistance on Understanding Business Earnings.

Analysis of Business Risk and Opportunity

Businesses are often valued and acquired based on a multiple of earnings and the multiples typically based on three factors
the inherent risk and opportunity in the business
market evidence, typically completed business transactions with similar charateristics
the competitive forces and balance of buyer and seller motivations
The key analysis for all buyers and sellers to perform during due diligence is around the risk and opportunity in the business: To understand this, you should consider the following levels of analysis:

The broader economic environment
Industry specific factors including the industry and product life cycle
Business risk framework identifying the potential risks and hazards
Business strengths and weaknesses
Ultimately the alignment of the particular business against the strengths of the buyer
There are probably a thousand books written on each of these subjects. Here is a snapshot of the analysis we use to underpin our valuation of small to medium businesses.

Broader Economic Environment
Consider the impact of factors such as interest rates, consumer confidence, exchange rates, unemployment. Where is the economy at? Where is it going?

Peak to contraction: GNP, industrial production and capacity utilisation falls, labour productivity increases and unit labour costs decrease.
Contraction to trough: CPI falls, retail sales decline and unemployment rises. Also, housing starts to fall, home lending falls and consumer sentiment decreases.
Through to expansion: CPI falls which results in interest rates falling and consumer real income, consumer sentiment and consumer demand increasing (i.e. car sales, consumer credit and retail sales increase, and housing starts to increase).
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