HEALY THE DEAL MAKER

Business broker David Healy prides himself on getting the best possible deal for his clients. Healy, director of Diaction Business Brokers, has been selling businesses for years and knows how to close a fair deal between an eager buyer and a genuine seller. A favourable outcome usually emerges between parties if the price gap is reasonably narrow.  Healy says he can sell a business reasonably quickly if the vendor has realistic expectations. It may be human nature, but Healy is only too aware that most vendors possess an unrealistic belief about how much their business is worth. Sellers may have to temper expectations to get the deal done. Equally, Healy’s experience tells him when a bid is falling well short of the mark, and he will advise against selling, knowing a far better deal for his client is just around the corner. “What I do is match price with the quality of the business,” Healy says. “And I make a point of constantly updating my clients on the latest developments.”  

They say you make your own luck and Healy’s high strike rate is mostly by design as opposed to accident. He’s only really interested in listing quality businesses from genuine sellers, preferring to leave unrealistic vendors, needing a reality check, to other brokers. “You’ll make more money from the businesses you walk way from than the ones you list,” Healy says. “That means list quality businesses and you’ll make money.” Healy refuses to sacrifice integrity and credibility for a fast buck. He believes in his clients and expects the same in return. And there’s no shortage of praise from satisfied vendors, such as Sharryn Nish, who recently hired Healy to sell her bookkeeping business because she was moving to Queensland. Sharryn wrote: “I needed a quick sale as we are moving interstate and I wanted the highest price you thought I could get for my bookkeeping business - you achieved both for me. Your list of people looking for a business was ample for my sale and you knew exactly what the market was and what was possible, so I wasn't mislead. And what you offered actually happened, much to my delight. Your down-to-earth, honest, professional and experienced handling of everything enabled me to feel support and comfort throughout the process. This was a much easier experience than I thought it would be, with a much better and quicker result than I thought possible, and I know it’s due to your efforts. Thank-you tremendously.” 

Healy advises vendors to work their businesses hard because revenue and profit growth are going to determine the selling price. The value of a business doesn’t necessarily rise over time like residential property. Indeed, Healy says vendors can struggle to recover the initial purchase price unless they can show solid revenue and profit growth. “Besides plant and equipment, what a vendor is essentially selling when exiting a business is a profit stream,” Healy says. “The bigger the profit, the higher the selling price.”  Many vendors also look for a value to be placed on goodwill, but there’s no magic formula for determining this. Healy says the price of goodwill varies markedly depending on a myriad of factors, such as the nature of the business, its sector, income predictability and the number of clients. Healy says in his experience, the first offer for a business is usually the best. It becomes more difficult to sell a business the longer it’s on the market. “Potential buyers start questioning if there’s something wrong with a business that can’t sell within a reasonable time frame,” he says. While the Australian economy is reasonably strong, Healy says credit is harder to obtain so sellers may have to offer vendor terms to do a deal.  Businesses cushioned against economic downturns, or what Healy terms as “recession proof”, appeal to buyers. These include body corporate, bookkeeping and recurring income businesses if sellers can show good figures. 

Healy, who has owned a body corporate business, a video distribution company, a soft furnishing business and was an executive with the Professional Golfers’ Association, sells a select number of businesses year. Outside office hours, he is the incoming president of the Chelsea Rotary Club and a board member of the Patterson River Country Club. “You only get back what you put in and that applies to business and life,” Healy says. For listings: www.diaction.com.au

ABOUT THE AUTHOR

Anthony Black is a long standing journalist, having worked in newspapers for more than 20 years. He was finance editor of the Sunday Herald Sun for eight years and his work was published in News Limited newspapers across Australia. As a freelance writer, Black has interviewed and written exclusive and extensive stories on Gerry Harvey, of Harvey Norman, NAB and Woodside Petroleum chairman Michael Chaney, Aussie Home Loans founder John Symond, Boost Juice founder Janine Allis, tyre magnate Bob Jane and Wesfarmers managing director Richard Goyder. His reports can be read on finance website thebull.com.au and in business magazine, INTHEBLACK, a trademark of CPA Australia, which is also online.    Anthony has previously written on David Healy in the November issue of INTHEBLACK titled In The Trenches.