Buying a business is not as straightforward as simply identifying the sector you wish to buy into and then watching the money roll in. There are a myriad checks that should be carried out as well as the more practical decisions concerning suitability of the business and its long terms viability.
Of the most immediate concern would be the state of the company’s finances. It is of intrinsic importance that a clear picture is sought before any further steps are taken.
In this, it is important to be diligent in your approach warns Greg Moore, a business consultant based in Dubai. ‘When establishing the basic financial principles of the business it is important to have access to accounts over an extended period, not just over the last quarter but go back much further. It is possible some people may massage their accounts.’
Of almost equal importance is to ask around and build up a background of the business. As with most walks of life, reputation will play a very important part in a business and it is necessary to ensure the business you are interested in acquiring is seen in a positive light. ‘Ask around, seek out a background, establish a reputation as it is THE most important thing in business. Does it pay on time? How does it do business? These are the sort of questions that should be sought out,’ said Moore.
The sort of questions will obviously be dictated by the type of business. If it was a PR firm for example, as a people business it would be pertinent to establish the sort of people working within the firm; what motivates them, will they be happy to see a new owner, make sure they are performing to an acceptable standard and will you be happy with such a workforce. Quite often new owners will have to work with existing staff to assure them over possible changes.
In the case of a service sector like a restaurant, then again it would be a case of ascertaining the quality of the business, the level of turnover, popularity and how it markets itself. Then there are more practical decisions to consider. Is its location any good? Are there plans to change the road or impact on access? Are there any planned laws or regulation changes that could affect the business?
Other questions a buyer should ask is whether they can run this business? Does the training, background and skills stack up?
‘At the end of the day, what should concern you in the short-term is the financial status and reputation of the business you are looking to buy. If these two appear in order then there will be opportunities to explore further and maybe make an investment decision,’ said Moore.
As long as you have done your due diligence, then the opportunities for entrepreneurs looking to buy a business are great, it is after all done thousands of times a year. Skip this process, or fail to explore all angles of the business and you may well pay dearly for your laziness - AMEinfo.com
Tuesday, November 24, 2009
Monday, November 09, 2009
The ABCs of Economic Recovery
10 November 2009 - Warren Buffet voted with his pocketbook this past week investing $26 billion dollars to purchase Burlington Northern Santa Fe, one of America’s oldest railroad networks and the backbone that helped build the country. Buffet is a classic, disciplined value investor who likes getting into a company when his internal screening criteria have been met.
The Oracle of Omaha — as he is fondly referred to as a result of his Mid-Western roots in Nebraska — is also big on animal instinct. The concept is simple, we all need to be aware to both survive and smell opportunity when it beckons. In that spirit, Buffet is probably letting economists debate the merits of whether this is a V shaped recovery (sharp downturn and straight line back to growth) or a recovery that reflects a W, which recovers, dips and bounces up and down for a few years. Maybe I am a child of the 60’s, but my fond recollection of those letters has more to do with the VW Beatles to get to the beaches of California, not illustrations to guide economics.
There has been quite a spirited debate on the accuracy of gross domestic product figures again. The criticism being that the measurement is looking backwards not forward and the basket that measures GDP is not reflective of real, on the ground decision making. I put aside traditional economic research for the last month during three visits to the Middle East which included Dubai, Qatar and finally Abu Dhabi during the Formula 1 festivities and the launch of our regional hub in the UAE capital. Instead, I relied entirely on animal instincts.
Going back to my Greek roots, I used the agora to get the latest reading of what is happening. Bankers confidently said that the road show, aimed to raise $6.5 billion in Dubai would be well received. The first portion of that offering was three times oversubscribed.
Businessmen noted that they felt the worst was over in the property market there and that foreign buyers started to show interest again. Colliers International released figures this week indicating that prices rose 7 per cent in the third quarter, although they are down 47 per cent on the year. Again, it does point to a bottom being reached.
In Qatar, despite the bottom following out of the natural gas market (trading one-fourth the equivalent of crude prices right now) the economy is hardly suffering through the “recession” with growth of 8.5 per cent this year. The biggest challenge is completing projects on time and allowing the market to catch up with all the construction. Again put the GDP numbers on the shelf and you find businessmen confident that capacity can be absorbed and that population growth and natural gas exports will drive their order books for a decade if not two. The Qataris know a thing or two about VW as well, but it has nothing to do with economics, just their stake in the German automaker after the protracted boardroom battle with Porsche.
Finally, the Formula 1 race looks to be only a start not the finish line for Abu Dhabi. I was surprised enough at the $40 billion officially spent to build up Yas Island and the infrastructure around it to host the circuit. According to Economy Minister Sultan bin Saeed al Mansouri that is only the beginning.
He says that the Yas Marina complex will be a blueprint for future development with an eventual commitment of $1 trillion dollars — for roads, power plants and rail links. That is an eye-popping number that others within the government were shall we say shy to commit to themselves, but it does give a sense of how both the old economy will help build the new one and the future won’t be measured by a V or a W in the region - John Defterios presents Marketplace, Middle East on CNN
The Oracle of Omaha — as he is fondly referred to as a result of his Mid-Western roots in Nebraska — is also big on animal instinct. The concept is simple, we all need to be aware to both survive and smell opportunity when it beckons. In that spirit, Buffet is probably letting economists debate the merits of whether this is a V shaped recovery (sharp downturn and straight line back to growth) or a recovery that reflects a W, which recovers, dips and bounces up and down for a few years. Maybe I am a child of the 60’s, but my fond recollection of those letters has more to do with the VW Beatles to get to the beaches of California, not illustrations to guide economics.
There has been quite a spirited debate on the accuracy of gross domestic product figures again. The criticism being that the measurement is looking backwards not forward and the basket that measures GDP is not reflective of real, on the ground decision making. I put aside traditional economic research for the last month during three visits to the Middle East which included Dubai, Qatar and finally Abu Dhabi during the Formula 1 festivities and the launch of our regional hub in the UAE capital. Instead, I relied entirely on animal instincts.
Going back to my Greek roots, I used the agora to get the latest reading of what is happening. Bankers confidently said that the road show, aimed to raise $6.5 billion in Dubai would be well received. The first portion of that offering was three times oversubscribed.
Businessmen noted that they felt the worst was over in the property market there and that foreign buyers started to show interest again. Colliers International released figures this week indicating that prices rose 7 per cent in the third quarter, although they are down 47 per cent on the year. Again, it does point to a bottom being reached.
In Qatar, despite the bottom following out of the natural gas market (trading one-fourth the equivalent of crude prices right now) the economy is hardly suffering through the “recession” with growth of 8.5 per cent this year. The biggest challenge is completing projects on time and allowing the market to catch up with all the construction. Again put the GDP numbers on the shelf and you find businessmen confident that capacity can be absorbed and that population growth and natural gas exports will drive their order books for a decade if not two. The Qataris know a thing or two about VW as well, but it has nothing to do with economics, just their stake in the German automaker after the protracted boardroom battle with Porsche.
Finally, the Formula 1 race looks to be only a start not the finish line for Abu Dhabi. I was surprised enough at the $40 billion officially spent to build up Yas Island and the infrastructure around it to host the circuit. According to Economy Minister Sultan bin Saeed al Mansouri that is only the beginning.
He says that the Yas Marina complex will be a blueprint for future development with an eventual commitment of $1 trillion dollars — for roads, power plants and rail links. That is an eye-popping number that others within the government were shall we say shy to commit to themselves, but it does give a sense of how both the old economy will help build the new one and the future won’t be measured by a V or a W in the region - John Defterios presents Marketplace, Middle East on CNN
Monday, November 02, 2009
Dubai Olympics 2020 bid
Dubai maps 2020 Olympic bid strategy - Tue November 3, 2009 12:02 am.
The committee of the 'Dubai 2020' Working Group, tasked with bringing the Olympic games to the city, held its first meeting Monday at the Emirates Towers under the Chairmanship of the Crown Prince of Dubai HH Sheikh Hamdan Bin Mohammed Bin Rashid Al Maktoum.
Dubai Ruler Sheikh Mohammed bin Rashid Al Maktoum attended a segment of the meeting according to the official news agency WAM.
Sheikh Mohammed directed the Chairman and members of the Group to work as a one team to enable the UAE to win bids for Expo and the Olympics in 2020, WAM said.
"Nothing is impossible as long as we have the determination for change, not change of determination," Sheikh Mohammed told the Group members.
The Group members included several other members of the emirate's political elite, suggesting strong government support for a possible bid.
The Japanese cities of Hiroshima and Nagasaki said they were considering bidding for the 2020 Summer Olympics in tandem with a campaign to promote a nuclear-free world.
Rome and Venice are reportedly preparing to host the 2020 Summer Olympics. Other cities including Cape Town, Durban and Rabat have also been mentioned as possible candidates.
The International Olympic Committee is to announce the 2020 host city in 2013.
The committee of the 'Dubai 2020' Working Group, tasked with bringing the Olympic games to the city, held its first meeting Monday at the Emirates Towers under the Chairmanship of the Crown Prince of Dubai HH Sheikh Hamdan Bin Mohammed Bin Rashid Al Maktoum.
Dubai Ruler Sheikh Mohammed bin Rashid Al Maktoum attended a segment of the meeting according to the official news agency WAM.
Sheikh Mohammed directed the Chairman and members of the Group to work as a one team to enable the UAE to win bids for Expo and the Olympics in 2020, WAM said.
"Nothing is impossible as long as we have the determination for change, not change of determination," Sheikh Mohammed told the Group members.
The Group members included several other members of the emirate's political elite, suggesting strong government support for a possible bid.
The Japanese cities of Hiroshima and Nagasaki said they were considering bidding for the 2020 Summer Olympics in tandem with a campaign to promote a nuclear-free world.
Rome and Venice are reportedly preparing to host the 2020 Summer Olympics. Other cities including Cape Town, Durban and Rabat have also been mentioned as possible candidates.
The International Olympic Committee is to announce the 2020 host city in 2013.
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