Buying A Business On The Mornington Peninsula In Victoria
My name is Ismar Muratovic and I have been a business broker for many years specializing in the sale of small to medium sized businesses in Victoria
. In this blog I will go through my experiences in selling businesses on the Mornington Peninsula in Victoria predominantly from Dromana to Portsea and what purchasers should really look for when buying in these areas, as I have seen many fail but also many flourish and not only make great money but also have a great lifestyle.What most people need to understand is that business is not all about financials eg. Profit and Loss or Section 52. There are many more aspects you have to look at when purchasing a business on the Mornington Peninsula. Even though there are over 5 million people that visit the Mornington Peninsula each year, a large number of the visitors are the same people year after year, some are weekenders, some are campers which have been coming for over 30 years and then there are the ones that have the holiday houses in the area, so there really is not a lot of room for margin of error when it comes to your business as bad news spreads fast.
In my opinion and from the experience I have seen first hand anyone buying a business in that area needs to buy it in the middle of Winter as it will be the quietest time of the year and the new owner can get to know his/her business, the new owner will get to know their core customers which are the locals which will keep the business afloat in the quiet times. People dont understand how busy their business gets in the peak season of summer. Most successful businesses on the peninsula average their monthly winter takings on a weekly basis in peak season and some even reach their weekly takings in one day, I know a lot of businesses that average $10,000 per day in January.
I have seen how the owners achieve such success.
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Firstly, let's go back to finding the suitable business that will achieve such numbers. People always talk about location being the key to success, that is true to some extent. From my experience, you need to compromise location sometimes for space. What I mean by space is, if youre running a sit down caf make sure there are plenty of seats as people will not wait for a seat, make sure there is plenty of storage area so you can save on delivery costs. Most hospitality businesses have an extra cool room which is off in winter but used in summer to keep up with demand especially with cold drinks.
Takeaway businesses are the same, most customers will line up to wait for food or coffee if it is good, but make sure you dont run out of stock if you have insufficient storage as one bad summer could ruin your business. I have sold numerous Bottle Shops on the Mornington Peninsula and their stock in summer doubles, in most cases from $50,000 to $100,000 so again storage may be a problem. Make sure you check this before buying into the right business.
Staffing is very important, what most business owners do wrong is they try and save costs on staff. Believe me one extra wage in peak season will save your business, dont throw away phone numbers or resumes of potential staff that apply 2 or 3 months before peak season you can never have enough backup. Also it is very important that you keep the existing staff, they come in very handy if they have worked in peak season. Most of all dont be shy to ask the current business owner that is selling to help you out in peak season, you will be surprised how many will say yes.
Ask the business owner when the business really peaks, what their stock levels are at that time of year, how many staff they have on, what hours they usually work because they might be closing too early and an opportunity can be made there, by staying open a bit longer. To really get a good understanding of the business ask the owner to supply you with their stock purchased invoices for the last 12 months as those do not lie. That will give you a 100% true indication on what the business is making and you can get a great indication on what to purchase in the following 12 months.
In my opinion it is a really great time to purchase a business on the Mornington Peninsula right now, and there are several reasons for it. The new PeninsulaLink which will be opening early 2013 will make it even easier and faster to travel there and history shows that over the last few years tourist numbers have been increasing and many business owners are telling me that last season has been their best ever.
As the generation of the baby boomers is retiring, and they own a huge number of holiday houses, most of the holiday houses are becoming permanent houses and therefore winter trade is increasing every year. Dromana itself has had an increase in population of over 14% just in the last few years alone.
Should you have any queries regarding buying a business or selling a business I will be more than happy to help you out even if it is just a simple phone conversation and you would like to get my opinion.
You can contact me either on:
Mobile: 0404 146 202
Email: ismar@absolutebb.com.au
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Yours Sincerely,
Ismar Muratovic
Senior Business Broker at Absolute Business Brokers
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by: Ismar Muratovic