'Understand numbers': How to pull a business from abyss
THERE are entrepreneurial opportunities out there but it's not a game of luck, its about numbers, says Neville Hughes.
"What do I need to sell to cover my costs?" is the driving question GTC Financial managing director Neville Hughes said potential business owners should be asking themselves.
"It's very important to understand the numbers," he said.
"What is it going to take to make the business at least break even? How many customers do I need every day and what's their average spend and the margins on that."
Neville said some new business would be better suited to the current local economy more than others.
"You want to be very careful what business you're opening," he said.
"If it's service and maintenance relying on servicing big industry I think you might struggle because there are already some big players in that market at the moment.
"There will be a niches, something people are going out of town and buying."
He said he was surprised to see the new fish and chip shop open on J Hickey Dr.
"I was always surprised the previous fish and chip shop didn't do well," he said.
"Seaview is a large area and if (the previous owners) had a good product I would have thought people would go there."
Mr Hughes said many of his business owning clients were diversifying their portfolios.
"I've helped several clients in the last six months buy new businesses or expand into different lines," he said.
"People were looking to close and they saw it as an opportunity to buy something quickly and diversifying and getting vertical integration.
"Some suppliers were closing local branches and all (my clients) had to do to take their position was to buy the branches' stock."
He said out of the owners who were closing their doors, many of them were just tired of being in business.
"Some have tried to sell their business but haven't. Instead of continuing on and becoming stale and being in a worse position they have just closed," he said.
"Some of the businesses that have closed have not necessarily closed because they have gone broke."
Neville Hughes will be hosting an information night on June 2 on the Boom, Bust and Reset Survey.