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Edmonton Business Brokers – Tip of the Day

The Success Small Business Franchisee – A Solid Plan for Start Up.  By Nigel Mayne

In the last 30 years, the franchise has grown into one of the most recognized and reputable business models on a worldwide basis. According to the International Franchise Association, there are over 767,000 franchises in the U.S. alone, providing nearly 10 million jobs and contributing $624.6 billion in business annually. In the UK, the franchise industry is growing at twice the rate of the entire economy according to a NatWest/British Franchise Association study released in 2009.

While business ownership has traditionally been just a dream for many, franchising has opened the door for ordinary people to build their own small business and reap the rewards. But how does that ordinary individual cope with the challenges of a business start up? Shopping for the right franchise is in itself a steep learning curve for many new franchisees. One way to facilitate the process is by searching out the guidance of experts on the process of qualifying as a potential franchisee and in taking the first steps as a new business owner.

Here are some suggestions on actions you should have underway when signing up for your new franchise:

Turn your business plan–the same plan you used to obtain the financing that qualified you as a franchise buyer–into a detailed blueprint for your first two to three years in business. Ask the franchisor for any checklists they have for new franchisees, along with their estimated timeframes. Year one should have high-level detail plotted out with Years two and three being more big picture.

Milestones to mark out include:

  • Final negotiation of the contracts for the desired location, equipment and fittings. If this is your first lease negotiation, spend quality time understanding all your rights, obligations and additional start up costs, and review them with your legal advisor.
  • Overlay all your task related activities with the timetable of the training requirements of the franchisor. This will help you set the first major milestone of opening day. Working backwards from this major event, you will be able to determine the desired lease date and the date by which you should have your key staff on board.

By now you will have easily identified a number of the steps that need to be taken concurrently.

  • Turn to your franchisor for any assistance in marketing and promotional activities to make your opening day a grand success and keep your new customers coming back for more. This key event is worthy of a detailed plan of its own.
  • Now, budget for each milestone in rough terms, so that you have the bones of cash flow control that you can flesh out as you learn more during the franchisor training sessions.
  • Allow a slippage factor in all milestone dates and budgets.
  • Your detailed business plan should be updated or adjusted two or three times a year or immediately should circumstances change.

If at any stage you feel a little overwhelmed by processes that are new to you or perhaps not your greatest strengths, remember that just as you don`t skimp on the prime location nor should you skimp on having the right people in the right places in your new business venture. Recognize your business weaknesses and compensate for them in the quality of your business relationships and key staff. Whether it is the actual hiring of staff, setting up your back-room operations or dealing with the detail of cash flow management, you must meet these challenges with the same energy, leadership and enthusiasm you have for the franchise itself.

The risks of failure in the small business franchise are the same as those in any new and legitimate business model and range from issues relating to the personality and strengths and weaknesses of the business owner to intellectual property matters, general contract disputes and failure to attend adequately to fiscal responsibilities, as well as misrepresentation and commercial fraud by third parties.

A solid plan for start-up and year one goes a long way to laying out the areas where the new franchisee needs to call on expert guidance.

Brought to by:

Dwight Lester, Performance Business Brokers, Edmonton Alberta

Edmonton Business Broker – Tip of the Day

What Type of Buyer is Right for your Company?

Part 3 of 3

Individual Investors
Individual investors are high net worth individuals seeking to own and manage their own company. Individual buyers expect to be integrally involved in the leadership and management of the company after their purchase. This buyer segment is usually more focused upon the geographic location of the target than its industry, as the buyer is typically not seeking to relocate.

Most individual investors are seasoned businesspeople, with experience in either corporate positions or other entrepreneurial ventures and ordinarily prefer established businesses with proven performance to newly started companies. Due to capital constraints, individual investors usually purchase businesses at the smaller end of the middle market spectrum.

The advantages of working with an individual investor include:

  • They’ll have direct involvement, and therefore a stake in the success of the business
  • They generally only require active shareholders to remain for a short transition period
  • They’re usually not seeking  to relocate the business or drastically change operations and culture

Possible disadvantages include:

  • They’re typically  inexperienced in purchasing businesses, which may prolong negotiations
  • Their financing and deal structure options are normally not as broad as with other buyer segments
  • They’re not as likely to pay a premium price for the business
  • They may not have direct industry expertise

Keep in mind that the payment portion of a buyer’s offer should not be your only focus in a transaction. Your understanding of the buyer’s ultimate plans for the business, their expected level of involvement and network of resources, are all important considerations. Knowledge of a buyer’s expectations for the business can be highly beneficial for both negotiations and the closing of a successful deal.

Brought to you by:

Dwight Lester, Performance Business Brokers, Edmonton Alberta


Edmonton Business Broker – Tip of the Day

What Type of Buyer is Right for Your Company?

Part 2 of 3

An additional consideration for strategic buyers is the clarity of historical corporate records. Large business buyers are particularly sensitive to possible liabilities (licensing issues, outstanding contracts, taxes, etc.) that they may become liable for upon purchase. Therefore, as is the case with virtually all transactions, it’s recommended that any outstanding issues be clarified prior to discussions with a strategic buyer.

The advantages of dealing with a strategic buyer include:

  • Their expertise in closing  transactions often expedites the closing
  • They generally have a wider range of deal structure and financing options than other buyer segments
  • They usually have sufficient resources (both financial and otherwise) to support company expansion and growth

Possible disadvantages include:

  • Absorption of the seller’s  operations into the buyer’s operations may be required
  • Contingent payments, that depend upon the tracking of financial performance, may be harder to monitor because of the difficulty of keeping separate records
  • Some employee positions may be eliminated due to consolidation of operations or elimination of back office functions
  • There is often a resultant  change in corporate culture

Private Investment Groups (also known as Private Equity Groups)
Private Investment Groups represent a formal fund (or a number of related funds) created by a group of investors for investment in, and purchase of, closely held businesses.

The strategy and focus of these groups varies widely. Some groups focus on a certain industry segment, while others are more concerned with the geographic location of the target. Certain investment groups may achieve the same synergies with an acquisition as corporate buyers, particularly if the group is building a portfolio of businesses within a specific industry. In any case, the Private Investment Group’s primary focus is to achieve the highest possible financial return for its investors.

Since investment groups generally prefer to let their portfolio companies continue to operate on their own, the preference is for the existing management team to remain after the sale. Additionally, these groups usually have a planned exit strategy and expect to hold a portfolio business for a pre-determined period of time – usually between five and seven years.

The advantages of working with an investment group include:

  • With professional buyers the  closing of the transaction is often expedited
  • They often provide access to   resources the seller may not have (managerial talent, financing, etc.)
  • Their equity capital has  usually already been raised
  • The acquired company  generally experiences little culture change

Possible disadvantages include:

  • The requirement for  management to stay may conflict with the shareholders’ exit plans
  • The transaction may not  offer synergies with other portfolio businesses
  • As cash flow-oriented buyers, these groups usually pay a fair but not premium price for the      businesses they acquire
  • The company may face being  sold again within five to seven years


Brought to you by:

Dwight Lester, Performance Business Brokers, Edmonton Alberta

Edmonton Business Brokers – Tip of the Day

What Type of Buyer is Right for Your Company?

Part 1 of 3

Different types of buyers have different objectives and levels of experience. Knowing these differences can help you in getting the deal you want.

As you begin your discussions with potential buyers, it’s important to keep in mind that their goals and objectives can vary greatly. In general, buyers can be classified into three major categories: strategic companies (both public and private), Private Investment Groups, and individual investors.

Each business buyer type presents a unique set of advantages and disadvantages that can have great impact on the ultimate outcome of the sale. Understanding these differences can help you, both in your negotiations and in finding the best buyer to meet your business and personal goals.

Strategic Companies
Acquisitions by strategic buyers are generally driven by potential synergies between the acquirer and the target entity. For example, you may have a product or service that the buyer lacks, but is highly complementary to their product or service offering. Or, you may have an established presence in a certain geographic or customer market that the acquirer has had difficulty penetrating.

This focus on synergistic value may result in higher offers from this buyer group than from others, since the operational efficiencies that are created can provide immediate higher profitability and a more rapid return on investment for the buyer.

Public and private strategic buyers differ in that the liquid market for public company shares may create a more aggressive valuation for public firms over those that are private. This may allow the publicly traded company to pay a premium price for your business, especially if you’re willing to accept a stock-for-stock transaction.

The company structure after the sale may also differ with a sale to a strategic buyer. For instance, unless management is viewed as absolutely critical to maintaining company performance, these buyers generally don’t require that the active, selling shareholders remain with the company much past a short transition period (generally six months to a year). Also, depending upon the size of the target and the logistics involved, the buyer will oftentimes completely absorb the target company into its current operations, making the ability to relocate the target company an important consideration……. Part 2 on Tuesday

Brought to you by:

Dwight Lester, Performance Business Brokers, Edmonton Alberta


Performance Business Brokers – Business for Sale

Performance Business Brokers presents –

This well established Edmonton, Alberta based integrated online/offline Real Estate Magazine Franchise is part of a well established 35+ year old North American brand that was voted the #3 Advertising Franchise across North America in 2008. As that ranking was #3 in all categories, arguably it would have ranked #1 in the “Real Estate” category.

This Edmonton franchise has been operating for 10 years and is consistently one of the strongest performing franchises in the system in Canada! There is plenty of additional growth for an ambitious Owner / Operator to capitalize on.

Providing the Real Estate Community with unique advertising opportunities, this turn-key business is a golden opportunity for a sales oriented Owner / Operator that would be interested in following a proven system and grow it to its maximum potential. The business is systematized to the point it runs like a well oiled machine.

This Franchise has little competition across North America. In Edmonton, it is the strongest advertising value proposition that Edmonton real estate companies have to reach potential real estate buyers, across the world. The marketing system provides a robust, integrated marketing program to Realtors and the Real Estate Community throughout the Greater Edmonton Area.

 The magazine publishes 13-times per year (every 4 weeks a new Issue hits the market) and is widely distributed across the market area. Online, this Franchise automatically syndicates client’s listings to massive web partners across the world.

Now in its tenth year, with the market recovering, the increased cash flow opportunity in the near future of this business is a massive. The financial opportunity is ideal for someone with vision to take on this very profitable opportunity now, and take it to the next level.

Absolutely no industry experience is necessary to acquire and grow this opportunity, although good business knowledge and customer service skills are a definite asset for ongoing client retention and growth.

 The current owner will provide full operational training and the Edmonton based Canadian Franchisor will provide ongoing support. This a home based opportunity that can be operated from most anywhere in the Greater Edmonton Area.

The purchase price includes the Franchise Transfer Fee and the current owner will even carry back up to $100,000 for a qualified buyer!

 Contact us today for full information on this unique opportunity. info@performancebb.ca

Brought to you by:

Dwight Lester, Performance Business Broker, Edmonton Alberta


Edmonton Business Broker – Tip of the Day

Performance Business Brokers has had the pleasure of engaging many business owners and buyers regarding buying and selling businesses. Sure there are industry multiples, rules of thumb and valuations for determining a price. But what are the things that a buyer really evaluates when scanning the business horizon for their next investment? I have narrowed it down to three fundamental things regardless of price.

The three key factors a savvy buyer evaluates are:

1. Is the business profitable?   2. Will the business run well without the current owner?   3. Are the financial records adequate?

Many business owners get a little nervous showing their financial statements. One of the best kept tax secrets is owning a business. A well run business with a good book keeper or tax accountant will show great cash flow and modest profit. Buyers not only understand that fact, they are attracted to it. There is nothing wrong with showing a net operating loss as long as the business has strong cash flow. Business owners do not get extra credit for overpaying their taxes. High debt combined with a net operating loss will chase buyers away.

Business buyers are attracted to businesses that are immune to the owner’s skills. Clearly there must be basic business management in place. What I’m referring to here is the critical elements of success must be able to thrive under new ownership. For example, if the owner is successful due to their active involvement in a key process, buyers will often pass even if they have the same skill set. Think of it this way. It is the difference between an artist and a painter. Painters are more about process and can be duplicated. Artists are the brand and take a piece of the business with them when they leave. One exception here is when a Private Equity entity assumes ownership and the “artist” remains in place.

In today’s environment with nifty software applications, financial records are typically not an issue. A simple profit and loss statement combined with tax returns are sufficient in most situations. If the business offers employee benefits, make sure you check the contract language to determine if “change of control” creates any lump sum payouts. Buyers want cash flow and leverage. Paying off key employees can be a deal breaker.

Before you begin the journey of determining the price tag for your business, make sure you have these three critical components in place. Do not underestimate the time it takes to market and sell a business. You should begin serious preparation 1-2 years in advance. Buyers always come to the table with a healthy dose of caution, but the deals that are consummated are inked with mutual respect between buyer and seller.

Brought to you by:

Dwight Lester, Performance Business Brokers, Edmonton, Alberta



Performance Business Brokers – Tip of the Day

Making an Offer to Purchase a business for sale.

Buying a business through a business broker is a very exciting experience. Once you decide you want to make an offer to buy a business, you need to understand the process involved.

After you make an offer through your business broker, the next step is becoming familiar with the Offer to Purchase contract for the sale of a business and completion of same.

As in all contract negotiation, certain clauses and amendments can be added or altered to the Offer to Purchase contract (it’s all about negotiation with the other party!). Your business broker in conjunction with you and your lawyer should be able to advise you on this.

Performance Business Brokers always recommends the buyer and the seller to obtain independent legal advice on the Offer to Purchase contract for a sale of a business.

We continue to handle the negotiations between buyer and seller and their advisors. We manage the due diligence process that ensures the buyers know that what they believe they are buying is what they really are buying. We ensure the business purchaser knows that the seller still has alternatives, because perceived choice impacts on the speed and price of the business sale. We therefore work hard to get you the best deal possible. Contact Performance Business Brokers to assist you in selling your business.

Brought to you by:

Dwight Lester, Performance Business Brokers, Edmonton Alberta

Selling Businesses is our ONLY Business

Edmonton Business Brokers – Tip of The Day

How to Increase Customer Loyalty at Your Small Business in Edmonton Alberta

So, you’ve already accomplished one of the hardest parts of running a business: drawing in new customers. Now, an equally difficult task awaits: keeping your current customers loyal to you. In this economy, customers are more particular than ever about the companies with whom they choose to do business, so it’s extremely important to ensure that you are doing everything you can to retain the customer base you already have. Here are several pointers you can abide by to make customer retention one of the main priorities of your small business:

Monitor the behaviour of your customer service staff.

Whether your staff interacts with its customers in person or over the phone, making sure that their behaviour is at least professional is mandatory. With the unemployment rate as high as it is, you need to find a nice way to remind your employees that they can’t take their employment for granted. It is more important than ever for employees to remain on their best behaviour, because it makes all the difference in customer loyalty

Make it easy for customers to communicate with you.

One common mistake identified by Performance Business Brokers made by many larger businesses is by making their customers jump through hoops to communicate with them. It is not a smart move to install a phone service that requires customers to punch in dozens of keys on their telephones before they can get an answer to their question. Furthermore, putting customers on hold for too long is a serious mistake that could very well cost you customers and jeopardize your business’ reputation. Make it a priority to be able to clearly communicate with each and every one of your customers. This involves having good customer service over the phone, quick responses to email inquiries, and even offering a live chat option on your company website.

Be responsive on social media.

A smart tactic you can implement at your small business is by providing quick responses to any and all social media interactions with your customers. If one of your customers writes on your company’s Facebook wall, sends you a Tweet, or bookmarks your site somewhere online, you need to be gracious and responsive! If your customers are using social media to let you know of any problems or issues they had at your small business, it is especially important to let them (and the public) know that you are taking their concerns to heart and doing something about it. Using social media sites to actually be “social” will certainly set you apart from your competitors

Brought to you by:

Dwight Lester, Performance Business Brokers

Selling Businesses is our ONLY Business


Edmonton Business Brokers – Business For Sale

Lakeland Artic Spa – Business For Sale, Bonnyville AB

A great opportunity to buy an established growing business in Bonnyville has just been listed for sale.

 Lakeland Arctic Spa is a full retail outlet that sells, installs and repairs the top brand names in the hot tub industry, such as Arctic Spas and Coyote Spas at great prices. They also sell outdoor structures, Steam Showers, and cedar accessories.  For your indoor enjoyment they also retail pool tables and games room furniture and furnishings.

 Arctic Spas are made locally in Throsby Alberta and are made to handle the worst our cold climate can throw at them due to superior engineering. The tubs are 33% more efficient to run than any tub in the market.

 Lakeland Arctic Spas has been in business since 2005 and has shown profitable growth every year. The store is located on the busiest corner in Bonnyville giving it excellent exposure.

 You can view their new Web Site at: www.arcticspasbonnyville.com

 Bonnyville is the centre of oil field activity and is expanding rapidly. Due to the influx of people there are ample opportunities for growth in the above mentioned product lines.

The Town of Bonnyville is located in northeastern Alberta, approximately 240 kilometers (150 miles) from the provincial capital of Edmonton. The Town’s motto – “it’s Multi-Natural” – refers to the town’s celebration of its diverse cultural heritage and rich natural resources.

The economy is growing and expanding faster that the provincial average creating employment opportunities in construction, oil and gas, as well as retail sales. As a major service area, the Town serves more than 10,000 people. The Bonnyville market area is strong with a population of 27,000 within 30 minutes driving time, 49,500 within 60 minutes, and 56,500 within 90 minutes. Bonnyville is the HUB for the oil and gas industry with over 60 national and international companies setting up head offices within the Town.

Additional community information can be viewed at: www.town.bonnyville.ab.ca

This business can also be purchased with a complementing business that operates out of the same building. Please see our Purified Water Store listing as well.

 For full information, please give us a call today (780)-756-2990 of email us at info@performancebb.ca

Brought to you by:

Dwight Lester, Performance Business Brokers, Edmonton Alberta

Edmonton Business Brokers – Tip of the Day

Make a Good Impression in 30 Seconds,  By Ron Ashkenas

In the U.S., the Super Bowl this weekend showed us the power of 30-second advertisements, and how influential they can be in promoting a company’s awareness. But how often do we craft our own 30-second spots with audiences that we want to influence?

Most of us are not in the business of making TV commercials, but in conversations there is almost always a 30-second moment that can make the meeting memorable.

Malcolm Gladwell touches on this phenomenon in his book, Blink. He talks about “thin-slicing,” or “the ability of our unconscious to find patterns in situations and behavior based on very narrow slices of experience.” He explains how too much information can cloud an individual’s ability to accurately analyze a situation, and how “in good decision making, frugality matters.” In other words, mini-impressions do count. And although you never get a second chance to make a first impression, you do get many chances to make the next impression.

So how do you turn your moment into an award-winning spot? Let’s look to advertisers for guidance:

Capture your audience’s attention. Think about one of your favorite commercials (or you can pick one from the game). Which part of that commercial stays with you? What technique did the advertiser use to draw you in — humor, aesthetics, emotions, surprise, or something else? Think about how you could incorporate that technique into your next important conversation.

Convey a clear message. Consider the key message for the target audience. What did the company try to convey, and how did the advertiser use that to connect with viewers? How did they frame the message to make this point? Now, think about your own messaging — what is the most critical takeaway you would like your viewers to receive? How might you deliver your message to ensure your audience walks away with this understanding?

Focus on differentiation. Think about what distinguishes your advertiser from the rest. How did the company use the commercial to portray its unique brand? Think about the same for yourself: What sets you apart from others? How can you highlight your distinctive qualities?

When you combine these three elements, you’ve got the potential for an influential “spot.” The key is having these components ready so that you can recall them when needed. For example, the best salespeople are always prepared to connect with potential customers who say that they don’t have time to talk. Similarly, the best leaders often are not those who speak the longest or the loudest, but those who convey their ideas in a memorable way, and can do it over and over again.

Our world is filled with noise, information, and distractions; so having someone’s undivided attention — even for 30 seconds — is an opportunity that shouldn’t be wasted. If you can use those 30 seconds to capture their attention, deliver your message, and distinguish yourself from others, you’re likely to be heard, understood, and remembered. What sponsor wouldn’t want that?

Brought to you by:

Dwight Lester, Performance Business Brokers, Edmonton Alberta