Asia Business Investor Blog

Business is booming in Dubai and it is the place to be at the moment for many of Asia's entrepreneurs. 

For those people looking at selling their business in Singapore or Malaysia one of the ways to potentially consider is to use a business broker. Business brokers in Singapore and Malaysia should not be confused with real estate or property agents. A business broker is specialized in the sale of businesses and the best ones are accredited to the International Business Brokers Association. The IBBA is the world's largest association of business brokers that is a non-profit association that operates for the benefit of more than 1,800 business brokerages across the globe.

Here are six popular reasons why Thailand is such a popular tourist investment location.

This week we had the opportunity to meet the President of Asia's newest nation, Timor Leste (East Timor) at the Singapore Foreign Correspondent's Association Annual Gala Dinner in Singapore. Dr Jose Ramos Horta was a co-recipient of the 1996 Nobel Peace Prize and is President of this small nation.

The country with a population of only 900,000 is one of Asia's poorest, emerging into nationhood only in May 20th 2002 after a period of occupation by Indonesia. In terms of nation forming, the government is very pro-business and is looking at making rather exceptional incentives for businesses to invest in the country. The economic credentials seem to be off to a sound start due to fiscal responsibility that is not the case in other developing nations.  

East Timor has untapped resources for agriculture, fisheries and tourism. It is also has world class diving and flights linking the country to Singapore (soon to be operating), Indonesia and Darwin will significantly open the market for tourism.

Fortunately, the presence of significant oil and gas revenues has laid a strong foundation for nation building. Significant investments from oil revenues are to be made in infrastructure such as roads and utilities. The presence of strong international support from Australia, Brazil, Portugal, Singapore, the Philippines and Kuwait as well as the World Bank, IMF and the UN. The government of Timor Leste is talking the language of pro-business economic development. They are proposing to reduce taxes to a level one would expect from places such as Dubai by having a tax free state! Could this potentially create a little Dubai in South East Asia? Certainly, this is something of interest to Asia's business community.

Given these incentives, Asia's entrepreneurs should explore business and investment opportunities. Some of the more immediate projects will be related to agriculture potentially coffee, palm oil and vanilla production just to mention a few. Palm oil or biofuel may be very interest projects to explore there. In terms of tourism, there would appear to be quite a few very interesting opportunities. To see more about the tourism in Timor Leste visit www.turismotimorleste.com  

Shortly, we will be listing investment and business opportunites from Timor Leste on the main Asia Business Investor Website. 

It looks like the world's newest nation is going in the right direction.

  

The majority small and medium-sized business in Asia are family owned.

At some time in the lifetime of a business, the issue may arise of whether best option may be to sell the business. This may be the case in some instances, where family members no longer have a direct interest in continuing the family business that has been in family hands for a generation or more. Children may wish to pursue different interests, be they professional careers or a different business path altogether. One of the options worth considering is whether selling the family business may be in the best interests of all concerned, especially if it aligns with the interest of the children and those that have invested their hard work over the years to see a windfall gain for the whole family.

Common pitfalls for the family business owner who is considering selling the business include several of the following:

The most common approach in most of Asia, is to ask friends and family for an idea of what the business is worth and look at potential sale to a range of contacts of friends and family. This is one approach, but it does create a multitude of problems, often leading to a result where the sale does not meet the expectations of all concerned.

Given the large number of businesses for sale in Asia, instead of trying to sell the business to a range of friends and family contacts, the business should be valued by a professional and secondly advertised as widely as possible in places such as www.asiabusinessinvestor.com where potential buyers can look at opportunities 24hrs a day over a period of weeks or months as the buying cycle is weeks and months. A business broker should be engaged if the business seller would like a professional to handle the issue.

In Singapore and Malaysia especially, there are a very large number of small family owned businesses that are for sale as families change with the generations. Whether it is a small grocery store or a large manufacturing business there is a time to sell a business and it is essential to do it well both for the business itself and most importantly for the family. 

Asia is undergoing a terrific boom in franchising.

The rise of the middle class in Asia and the growth of China and India has delivered more opportunities for franchising than ever in history. Consumer demand remains high for franchise offerings across Asia especially in high growth markets. The market is very receptive to franchises especially in conjunction with the boom in retail projects in Asia as well.

Here are just three key reasons to consider buying a franchise in Asia:

Lower Your Risk with a Proven Business System
It's a lot easier than starting a business from scratch. There are many complex factors involved in any small business and franchise systems provide the know-how and support for the business owner. In a 2001 survey conducted in Singapore, by the Singapore International Franchise Association, nine out of ten businesses which have franchised their operations have become more profitable. Systems alone can provide a solid basis for increased profitability which is a strong reason to consider franchising in Asia.

Asia's Consumer's Prefer Franchises
The evidence is tending to demonstrate that the retail boom in Asia has been very much a boom for franchises. The very high representation of local franchises in the Philippines, Malaysia, Korea and China to cater for consumer preferences demonstrates that there has been strong demand for franchises across the region.

The Economics
The solid economic growth in Asia represents a great opportunity for franchisers. The increase in the purchasing power of the Middle Class represents the underlying driver of franchise growth. As each economy develops, consumer demand will remain strong and franchisers will need to go where the market is going.

As always, it is a matter of choosing the right franchise. Review the listings at AsiaBusinessInvestor.com and see what is on offer.

In October this year the annual www.franchiselicenseasia.com will be on in Singapore from the 16th to the 18th of October. This event provides and opportunity to meet the various franchisers over the major event itself. It's worth going if you can make the effort.

We shall be providing some podcasts shortly with various franchisers in Asia and franchise consultants so stay tuned to listen to so interviews we will be doing on franchising in Asia.

At AsiaBusinessInvestor.com we are receiving a high number of requests for information about business brokers. Our website provides a listing service to connect entrepreneurs in Asia for those looking at buying or selling a business, franchising, investment partners or general business opportunities. Besides listing opportunities, we do not provide additional services that are typically provided by a full-service business broker.

Contact Us at info@asiabusinessinvestor.com if you are interested in listing on our site.

Are business brokers in Asia worth the fees they charge? If you are buying a business or selling a business, chances are you may be dealing with business brokers. Many buyers and sellers of businesses will use a business broker to assist with the business-for-sale transaction, and there are many good reasons why that's the case.

In simple terms, business brokers act as middlemen between business buyers and sellers. But they offer much more than that.
If you are buying a business or selling a business, it helps to understand the role of business brokers in the process. Here are some of the pros and cons of using a business broker.

Advantages of Using a Business Broker

• Assistance in Valuing a Business. Business brokers have extensive knowledge of what businesses are worth and can usually derive a business value that is fairly accurate. Without a business broker, it is tough for sellers to accurately place a realistic valuation on their business.

• Help in Presenting the Business. Business brokers are adept at packaging up a business to show it in its best light. Without a business broker, a seller may not be able to market their business in a way that is attractive to buyers.

• Confidentiality. Business brokers work in a confidential manner, keeping the sale of the business in confidence so that competitors, employees, suppliers and others are not informed that the business is for sale.

• Experience in Evaluating Buyer Intent. Business brokers are able to quickly ascertain whether a potential business buyer is serious or wasting valuable time. In contrast, a seller who is not using a business broker may invest considerable time in courting a potential buyer who turns out not to be serious or qualified.

• Ability to Convert Interest in Buying a Business into an Actual Sale. Business brokers know how to create competition among potential business buyers in a way that moves the sale of a business along. When sellers make an offer, the business broker can interpret the offer and even suggest changes to an offer that will make it more likely that the business sale will occur.

• Service as an Intermediary. Buyers and sellers generally don't trust each other. The business broker can serve as a middleman to interpret communications and lead the buyer and seller towards compromises whenever possible.

• Expertise in Business-for-Sale Transactions. Finally, the business broker knows all the minutiae required to close a business sale transaction. Typically, a buyer and seller may not understand all the nuances of getting the deal to closure, so it's good to have an experienced business broker involved who can facilitate the process.

Disadvantages of Using a Business Broker

• One-Sided Interests. Remember that the business broker usually represents the seller. If you are a business buyer, the broker's interests will not be aligned with your interests. While most brokers are very helpful to buyers, buyers must keep in mind that the broker is not on the buyer's side.

• The Broker Fee. Brokers will typically take 6-15% of the total business selling price as their commission. That's a hefty take, so many sellers may want to consider doing a FSBO (For Sale By Owner) sale and see whether they can sell their company without the assistance of a business broker.

• Varying Levels of Competency. Finding a good business broker can be a challenge. The field is largely unregulated so, in some cases, individuals with little experience or expertise can hang up their shingle and declare themselves to be business brokers. Be careful. If you engage an incompetent business broker, it can be a complete disaster.

• Incentive to Sell at Low Prices. A business broker gets paid when there is a sale, so they sometimes will underprice a business to sell it quickly. For business brokers, the difference between selling a business for $500,000 versus $600,000 is only 6% of $100,000 – or $6,000. For the seller, it's a $94,000 difference. By selling for $500,000, the broker walks away with $30,000, which he may be more than happy to do – even if it's at the expense of the seller.

• In Asia, you need to ensure that you are actually dealing with a qualified business broker that you can trust. Do you homework and make sure that the business broker you decide to work with has the experience and reputation. We will shortly be listing business brokers on the main AsiaBusinessInvestor.com website. This will be a searchable directory of business brokers from China, through to Vietnam, India and UAE.
  

When buying a business in Asia you are likely to find yourself inundated with advice from well meaning friends, family, neighbors – everyone is an expert and everyone has an opinion.

Who should you listen to when it comes time to make a decision that is going to be so fundamental as to how you spend your next few years? Perhaps it is necessary to rephrase the question to “Who should you not listen to?”

The process of buying a business can be slow, much time and energy will be exhausted in sourcing and researching suitable propositions. Whether you are looking at businesses for sale in Singapore or a business for sale in Thailand or Dubai the process takes time.

At AsiaBusinessInvestor.com we have a growing list of businesses and franchises available for sale that can serve as a starting point to allow you to connect with businesses for sale across Asia. Buyers benefit greatly from using professional advisors that have the appropriate skills, resources and experience relating to the particular industry that interests them. We will soon be providing links on the site to business brokers, lawyers and accountants that can ensure that the process of buying or selling a business is a success.

Two advisers that may be of particular assistance to a buyer of a business are your accountant and lawyer however it may be wrong to assume that the same accountant and lawyer that you have used previously have the necessary experience and expertise to guide you in this particular transaction. Making the right choice at this time is crucial as to how smoothly the transaction will proceed from this point forward.

Preferably you will be seeking advisers that have previous experience within commercial and business law, company transactions, possible tax consequences and how best to structure a business agreement. Someone who specializes will be able to add value to the deal, a true professional recognizes when advice outside their area of expertise is needed and they will know when to refer you to someone else.

Ideally you will have discussed your intention to buy a business with your accountant and lawyer prior to proceeding, and once having sourced what appears to be a suitable business it is prudent to listen to their recommendations prior to signing a conditional contract to purchase.

Your lawyer will help you understand exactly what is in the contract and what your responsibilities are should your offer be accepted by the seller. In all likelihood the conditional contract will be subject to a due diligence investigation which allows the buyer time to conduct more intensive research into the entity. It is during this process that your advisers need to be exceedingly proactive, assisting you in every way to ensure all necessary enquiries are made and answers are provided in an opportune manner.

Anyone can (and will) advise you on buying a business in Asia, nevertheless only a specialist with experience and familiarity within the industry and with the size of entity you are considering will be able to give you the expert advise you deserve. So if you are buying a business in Malaysia or buying a business in Thailand, or even buying a business in Singapore you should look beyond the well meaning opinions of friends and family, spending money on professional fees is a worthwhile investment.

As a prospective owner, you should establish the current worth of the business and its future prospects. Some important considerations are:

For advice and protection in buying a business we suggest that you seek the services of a lawyer, accountant or business advisor.

Very shortly, AsiaBusinessInvestor.com will provide a list of support service providers on the website. Buying a business in Asia is a great way to expand your fortunes, but you should work with experts to ensure that you make the best decisions for the future.