Earlier this month, I saw two articles from Calgary news outlets that discussed a concerning trend affecting many small to mid-sized Calgary businesses. Both the Calgary Herald and CBC reported that some Calgary businesses were closing with little to no notice. It is always tough to read about a business shutting down knowing how much hard work goes into opening and operating a business. It is even tougher to think that some business owners may have closed prematurely, leaving money on the table.
One of the services I offer is a business audit. The audit helps to analyze the strengths and weaknesses of the business and identifies areas where money can be saved and where money can be made. During the day to day operation of a business, owners are overwhelmed with responsibilities and obligations. This can make it difficult for them to take a step back and objectively consider what is going well and what areas of the business need improvement. During tough economic times, this becomes even more difficult to do since most of the owner’s time and energy is invested in keeping the doors open. As a Certified Business Intermediary (CBI), I am able to offer an unbiased, objective opinion of value and provide strategies to help the business owner get a return on their investment.
When times are tough, many owners simply assume that their only option is to walk away from the business they have built. This can cause long-lasting financial problems if they have made any personal guarantees or obtained loans to help support the business. There are often other options that business owners can pursue.
1. Talk to the landlord: Most commercial landlords have a vested interest in helping their tenants to succeed. Even if the lease is not up for renewal, business owners should still contact their landlord to find out if they can help. Landlords may be willing to offer temporary rent relief or renegotiate the terms of the lease.
2. Get a broker opinion of value: A broker opinion of value represents the current market value of a business. The broker opinion of value is based on several factors including income, expenses, and local market conditions. The broker opinion of value can help business owners to objectively assess the potential sale price of the business. When completing this process for a client, I also provide information on the best way to proceed given the objective information available and the business owner’s goals.
3. Work with a business coach to complete a business audit: A qualified business coach, like someone who has obtained their CBI designation, can help business owners conduct a thorough and objective SWOT analysis of their business. This process will identify areas where expenses can be contained and where profits can be increased. A business coach can also help to increase the overall efficiency of the business and improve outdated or cumbersome processes and habits.
The reality is that some Calgary businesses will close their doors this year. The good news is that some may be
able to successfully weather the current economic storm by employing one or all of the strategies listed above. If you have a business, contact me to find out how I can help you to successfully grow or sell your business so that you are not forced to walk away with nothing.