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Asking Prices

We are often asked,

“Why are the asking prices all over the shop?” and

“Why are there so many for sale?”

Firstly, as a dedicated brokerage that only sells newsagencies, you will find a concentration of newsagency opportunities here, like no other place on the internet. So in reality, there have always been this sort of number for sale, it’s just looks more when it’s all in one place.

10-15% of most such industries are available for sale at any time, with flows in demands and transfers subject to a variety of influences. Consider the simple maths. Roughly 3500 newsagents in Australia with an average ownership of 5 years equals 700 movements each year, or 58 a month !

Whilst the average ownership is 5 years (coming, going and upgrading) there are many newsagents with more than 20 years ownership, testiment to the fact they make good money, and do not have a need to sell.

Spread across the broad geography, and given buyers affordability price points, at times there is very little on offer !  As buyers compete for good businesses as much as sellers compete to find a buyer, if you see a newsagency that suits you, don’t procrastinate; make an offer !  Business is all about making decisions.

If you are interested in a particular Newsagency that isn’t listed on our web page, ask us anyway, as we have some listings that aren’t advertised (for privacy reasons) and it could be one of them, or we can approach the owners and ask if they are interested in selling. Given the number of years we have been newsagency brokers, we would likely have past history on the business anyway.

Some Newsagencies at the right price rarely make it to the web. They are snapped up by our registered buyers from our regular update e-mailouts, so get on board our database by completing a Confidentiality Agreement and receive these regular alerts to catch the bargains.

ASKING PRICES

Post GFC, there has become a clear difference between “Buying a Job” and “Buying a Business”.  Loosely defined, if the shop requires staff additional to the 2 working owners to achieve that revenue, then it’s a “Business”.  If the shop only needs the 2 working owners, doing reasonable weekly hours, then it’s a “Job”

Buying a Job is not a bad thing. At times, an easy-to-manage business making good trade with some growth prospects may be just the ticket ! Most people tire after doing the same thing for many years; and quite often, that provides opportunity to inject a fresh approach.

How many jobs provide the opportunity to grow your wages by double digits yearly ? Operating a business can provide such rewards; and newsagencies with their diverse product & service offering are uniquely positioned to capitalise.

Financiers have fairly clear expectations for value on these definitions, but in general, the  greater the profit, the higher the acceptable sale value or price to profit ratio/multiple. It is unreasonable to expect a high quality business to accept the same price to profit value of a much smaller business.

Beyond that, like any asset, sellers will have a figure in mind they want, and at times, that has nothing to do with the comparative market. If you want that particular business, you have to accept there may be a very good reason why 2 businesses essentially making the same profit, may be twice the asking price of each other.

Asking prices are also effected by numerous influences. Trade stability, longer leases, newer infrastructure may not be evident on initial research; but can make a significant difference to acceptable value.

Lastly for now, vendors motivation to sell (health or personal issue) will also influence the asking price and level of accepted offer. That does not mean a similar business wants to give their shop away for a bargain. So researching the market and talking to a Specialist Newsagency Broker can help you recognise the bargain when it presents itself.