The Importance Of Protecting IP
We recently invited Joanna Oakey, Director of Aspect Legal to a webinar on the topic, ‘The Legal Challenges of a Growing Business’
Here’s what he said –
Clients may not realise how much value sits in their intellectual property. You will realise how much value sits in it when someone tries to take it from you, when a competitor uses a similar brand, or if you receive a cease and desist action for a mark that you’ve used for years and years.
We had a client that had been using a mark for 14 years that they received a cease and desist letter in relation to the use of their mark and ultimately, even though we found a way through for them, it was going to be really expensive. So they ended up changing their whole brand after 14 years. Don’t think time will necessarily save you if you haven’t got a trademark protection in place.
If a staff leaves with the intellectual property, that’s another time the businesses suddenly realise how important their intellectual property is. So don’t be one of these business owners who is forced to recognise the value of it because it’s been taken away or threatened.
Recognise it from the beginning and recognise it as the value that it is and ensure that it’s protected. There’s a whole heap of different ways to protect intellectual property in your business. Some are just the practices that you put in place in your business.For trademarks, you can get a registered trademark and that forms a protection for you, but other areas are just things that you can do in your business. But make sure they’re in place and you understand how to protect that value and that is in place.
Watch the full webinar, ‘The Legal Challenges of a Growing Business’ at https://learning.benwalker.com/courses/legalbusinessgrowth
What Do Bankers Look For In A Business Plan?
On our recent webinar with Scott McGregor – Commercial Broker at Mortar Finance, we were asked, “Is there a key element of a business plan that banks put emphasis on?”
Here’s our answer –
The business plans are handy. It gives the bank an understanding of the borrower’s thought processes around that business.
The fact that you’ve taken the time to prepare the business plan shows that you’ve actually put that thought behind it, which goes to the management experience capability piece within the character. If I’m looking at the business plan, I’m looking at a couple of things and that is, who are the people behind the business? bios, resumes, that sort of thing of the people that are running the business.
One thing that’s in a lot of business plans is a SWOT analysis, which is your strengths, your weaknesses, opportunities, and threats. What are the strengths of the business or the owners? Where are the weaknesses in that business? And how are they potentially using the strengths of the business to overcome that? What opportunities for growth or for new business that the owners have identified within the operation, and those opportunities may then be factored into a forecast that they’ve built, and some of the assumptions around that forecast. And then what are the threats to that business? And it might be industry related.
Things that could be threats to your business, which then become risks that the bank is going to want to see, how have you mitigated that? What are you doing about that? So those are the two important things that I would look at in a business plan. And it really comes down to the owners, and their assessment of that business.
Watch the full webinar, ‘Funding Your Next Business Acquisition’ at https://learning.benwalker.com/courses/fundingbusinessacquisition
What Is A Visa?
We recently invited Michel Sulzbach and Erica Carino, directors of Bravo Migration to a webinar on the topic, ‘Hiring Temporary Residents on a Visa’
Here’s what they said –
It is a legal document that allows a foreigner to not only enter the country, but also remain in the country for a particular period of time. In Australia, we have three main sub-categories of visas.
We have temporary visas for 1-4 years or 5 years, depending on the subclass of the visa.
Permanent visas are the same as the green card in the US. It’s the one that allows a visa applicant to remain here indefinitely and depending on the circumstance or the majority of cases, it would allow them to apply for citizenship if they want Australian citizenship down the track.
Then we have the third one, the bridging visa. It’s not technically a substantive visa, a bridging visa is a bridge. If someone comes to Australia, for a student visa and they apply for a sponsorship visa while the application is being processed, that person is granted a bridging visa.
Bridging visa is a legal technicality that allows the visa applicant to remain lawfully in Australia until the application is processed. This is particularly important nowadays because the processing times have exploded and there’s a long waiting period.
One of the things that we cannot say enough is how important it is to take advantage of those people who are in Australia at the moment, even if their visas is running out and then you will decide to sponsor them, even if the application takes a year, the reality is they can already work for you and they can stay in the country while the application is being processed.
Watch the full webinar, ‘Hiring Temporary Residents on a Visa’ at https://learning.benwalker.com/courses/hiretempvisas
How Banks Determine Capacity For Funding
We recently invited Scott McGregor, Commercial Broker at Mortar Finance on a webinar on the topic, ‘Funding your next business acquisition.’
Here’s what he said –
Banks are going to look at the capacity, which is effectively the ability to repay the loans. That is what the bank refers to as the Primary Exit, and how the businesses cash flow will afford the loan repayment.
The bank is going to look at a forecast or some sort of a document of what the future earnings of that is going to be, and the capability of the management to be able to execute on that forecast. It will be important for the bank to understand what assumptions you have made in regards to that forecast.
If you’re buying a business that is complimentary to an existing business, How are you creating synergies between the two businesses? Are there ways that both businesses can leverage off each other? – They are the assumptions that banks are going to want to understand in terms of your forecast as to how that loan is going to be repaid.
The other important factor is the vendor figures. If you are buying an existing business, there will be some vendor information on that and we thoroughly recommend a fairly exhaustive due diligence around that involving your accountant because vendor figures are the vendor’s figures.
There are add-backs and other things in there that the vendors will confirm them as add-backs, but you need to understand if they add-backs or not, because if they are a general expense of that business ongoing, you need to make sure that the business can afford it. It is always a strong recommendation, and the banks will need to understand what due diligence you’ve done around the vendor figures.
They will provide a guide to future earnings, but it does depend on how you are structuring it. If you’re able to leverage off an existing business that may have an impact on what the forecast looks like in comparison to the vendor figures who may not have had that same leveraged position. If you are acquiring a fairly new business, it may still be developing cash flows and the vendor figures may not have a huge amount of relevance. It is a case by case basis but certainly understanding the vendor figures is key to understanding where the business is going to go.
Watch the full webinar, ‘Funding your next business acquisition’ at https://learning.benwalker.com/courses/fundingbusinessacquisition
What Costs Are Involved In Acquiring A Business?
There would be accounting fees and there is also potentially tax depending on how you purchase it and depending on which state you purchase the business in. For instance in Queensland, if you were to buy a business/asset sale or purchase, you pay stamp duty on that but New South Wales has a zero stamp duty.
In terms of transaction costs, it depends what advisors you want to get on board. You might want to do a technology audit or an HR audit. There are clients who go in and have many multiples of acquisitions. Some will have a technology audit, others will have someone who’ll look at the equipment list and look at the valuation of that.
There might be those sorts of costs. But other than that, legals, accounting, any costs related to due diligence or confirming the value, it’s really that purchase price. Consider the time cost of your own time down that path and then the integration of the business into your business.
Watch the full webinar, ‘Acquiring a Business’ at https://learning.benwalker.com/courses/acquiring-a-business
An Update On Our Big Hairy Audacious Goal
The interesting update is we’ve actually hit almost $4.3 million. We’ve more than doubled our target and our team is stoked and clearly we set the bar or the target too low and so good that we’ve been able to save our client base over $4 million.
Blown away as a team and through our Day for a Dollar campaign, we’ve given through B1G1, and we’ve given over 4 million days worth of access to food, water, health, and sanitation, which is incredible to have had that sort of impact.
Discover more at https://info.inspire.business/save2point1m
What Is The Fortify Methodology?
We recently invited Joanna Oakey, director of Aspect Legal on a webinar on the topic ‘Acquiring A Business.’
Here’s what she said –
It’s important to fortify your business before you acquire, and then after.
We have been identifying, protecting, preventing and predicting. It is identifying issues that might be sitting there in your business. There could be landmines that might be about to go off. And we find growing businesses often have these vulnerabilities in their business because of growth.
They have a different infrastructure needed when they started their business. Once you’ve identified these key risks, it’s about protecting your business and protecting against these going off.
It’s putting in place prevention because prevention is cheaper, easier, and more time effective than trying to battle the issues and find a cure afterwards. And then prediction systems, i.e. systems that will alert us ahead of time whether there’s issues that might be brewing in the background.
Watch the full webinar, ‘Acquiring a Business’ at https://learning.benwalker.com/courses/acquiring-a-business
Most Lawyers Won't Talk About This
We recently invited Joanna Oakey, director of Aspect Legal on a webinar on the topic ‘Acquiring A Business.’
Here’s what she said –
Process is something most lawyers won’t even talk about, because most lawyers don’t have a defined process for how they see acquisitions.
They might have a process in that they know the contract goes first and then you negotiate it.
What are the things that can cause deals to fall over? How do you protect against that from the beginning? A lot of it is based on emotional intelligence. Making sure the parties are communicating and that you’re not getting caught up in the quagmire of pointless detail, that you’re actually focusing on the big picture and the important things. And also that you’re dealing with someone that’s got templates, checklists, and processes to move this forward.
Watch the full webinar, ‘Acquiring a Business’ at https://learning.benwalker.com/courses/acquiring-a-business
The Risks Involved In Purchasing Business
There are a number of different risks that could be involved in a business purchase and it is going to depend on the business and the industry. They are probably more specific to an application.
An important one to bear in mind is a ‘lease’ sort of business. If you’re buying a business with a lease, it’s important to understand the terms of that lease; how much the rent is, what’s the expiry of the lease, is there a bank guarantee that you’re going to be required to put up for a rental bond under that lease? Because, that will add to your funding requirement. Who is the landlord, if you get a chance to meet the landlord, that would be ideal because a good or bad relationship with a landlord can have a good or bad impact on your business as well, depending on the type of business.
If you’ve got a three-year lease in place on the business you’re buying, the bank is going to look at a loan term that lines with that three years. A short lease also means a short loan, which could then increase your loan repayments.
There may be a chance when you’re buying the business to renegotiate the terms of that lease, but certainly understanding the lease terms, because technically once the lease ends, you may not then have an ability to run your business so it is something to certainly understand as part of your due diligence process is the lease that’s in place.
How To Fund An Acquisition
We recently invited Joanna Oakey, director of Aspect Legal on a webinar on the topic ‘Acquiring A Business’ and we had a question come through, ‘how to fund an acquisition?’
Here’s what she said –
There’s a number of ways that you can fund it. You can fund it from your own investors into the business. You need to make sure that you have the right investor agreement, shareholder agreements, unit holder agreements, and the owner agreements in place.
Another way is taking finance against the business itself. There’s certain industries and certain amounts of finance where you potentially can get 100% finance. Medical practices, dental practices, veterinary practices are examples of businesses where you can quite often get a full 100%.
Accounting practices, Legal practices, are types of businesses where you can potentially get 100% funding from banks, financiers, or traditional financiers. If you can get 100% funding, you’re not putting cash in, and then you’ve acquired something that gives you an immediate uplift.
Watch the full webinar, ‘Acquiring a Business’ at https://learning.benwalker.com/courses/acquiring-a-business
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