Travel & Education Abroad | Russia

The food and beverage industry has always been one of the most attractive for the would-be entrepreneur. When we consider fundamentals, something that each one of us must purchase to survive, food and drink of course comes in at the top of the list. This may very well be true, but so many interrelated complex issues arise when you look to buy a business, that you should remember that only one in 10 companies such as this will actually survive. It is very important to value the business correctly upfront and if you go about your due diligence correctly you will have a good chance of surviving against these awful odds.

One of the key skills that you can possess when you get ready to buy restaurant business assets is the ability to communicate and to decipher information. A number of meetings will be required with the seller and don’t be frustrated if the meetings don’t reveal some of the significant information. Normally, a seller will want to be just a little protective and will want to see how enthusiastic you are or whether you are really serious before any important data may be divulged.

Before you can start projecting a position in the future, you need to know some basic facts and figures. How many tables are there in the restaurant and what style of food does it focus on? You need to know how many meals are served per day, per week and by month and if the menu is somewhat specialized, are the supplier contracts strong enough and is the supply chain sufficient?

In any business, labor costs are significant. Find out how the costs breakdown and whether the strength of the entire business is based on the skills and strong personalities of key figures, notably the master chef. You may not expect to get a lot of the finer details during the early process, as a seller often wants to keep any news of a potential sale away from the employees until the appropriate moment.

When you start to compose a check-list of questions for the owner – and you might find you have hundreds, don’t be afraid to be as specific as you need to be and insist on appropriate answers. Before you even go there, however, understand that this kind of business involves very long hours and is typically a seven days per week concern. You will definitely be required to be good at managing people, dealing with significant problems and you might have to be patient before you can expect to see any profit from your endeavours.

Some of the challenges you may well face as a new owner include the ability to consummate new relationships with your suppliers. Some suppliers see a change of ownership as an opportunity to significantly “amend” their contracts, and prices. Don’t be surprised if you have to deal with distraught people who may be concerned because their table is not ready for them, although they booked it but still arrived past their scheduled time. You must be able to motivate your employees and be able to handle all situations immediately, resulting in praise or termination accordingly.

When you’re sure that you are cut out to buy business interests in the restaurant industry, have tabled the right questions and received the comprehensive answers, are happy with your interpretation of the financials and contracts, then you are ready to discuss the value. Always work with knowledgeable experts in the field who have experience in the restaurant industry and use their findings to backup your own thoughts. Find out what the bottom line is, how much the owner makes in terms of salary, net profits and benefits and then adjust this figure downward based on any capital expenditure you feel you may have to make.

With any restaurant for sale, the three major costs involved – labor, rent and food, should be no more than two thirds of total expenditure and always remember that you will have to have a superb marketing plan so that you can tell everyone about your new creation.

Richard Parker is the President and founder of the prestigious Diomo Corporation – The Business Buyer Resource Center. His celebrated materials, seminars and consulting have encouraged thousands of aspiring business buyers from around the World to pursue their dream to buy a business.

Do you see the prospect of buying an existing business for sale as being a leap in the dark, as this discourages many an enterprising individual? If they have never been involved in such a transaction before, it can seem to be very alien. Most of us are used to engaging in transactions where we buy a tangible product like vehicles or houses and in these cases “what we see is what we get.” To value a business correctly, you need to look at a number of different intangibles as well as assets that need to be inspected and you also need to consider goodwill in many situations. Goodwill certainly comes into the equation in a service related business, as does a good client list and as such your process of due diligence will require you to explore and reveal quite a lot as you inspect different documents accordingly.

Always remember that there are two different viewpoints here. The seller will have a clear indication of the worth that he or she places on the business. This may often be inflated by a natural enthusiasm and the sheer amount of hard work and dedication that may have been put into the business to this point. While you should always maintain an element of respect for the sellers’ point of view, you must look at all documentation and evidence in the hard light of day and understand that it is up to you to determine if you should buy business interests according to the specific value you set.

After you decide you need to move forward and you have really determined whether you want to buy a business of interest, get ready for a very lengthy process. During the entire process you must maintain a level of common sense and good humor and be prepared to cultivate a strong level of communication with the seller.

This is where expert advisers will come into their own and if you have no real experience with this kind of business, its related market or niche, utilize proven resources and get as much help as you can. This is not to say that you will simply hand off all the work to these advisers, barely looking at the documentation presented to you, as the decision-making must in the end be made by you and you alone. The financial documents and all of the paperwork must be reviewed by you first to be sure that you have a great feeling initially before you hand them over for further processing by your experts.

Always be wary if some of the financial documents are either missing or incomplete, or are not balanced and reconciled correctly. Certain precedents must be maintained and accounting procedures completed. You may be asked to sign some non-disclosure or non-compete documents before these are made available, but the financials are the rock upon which everything else is built.

Each and every operation is different in its own right and no two businesses are the same. So many external influences are involved and any number of different events can come to bear to create a variety of different situations. You will undoubtedly uncover some surprises and come across unusual figures and facts, but remember that while industry benchmarks are definitely of interest, you are focused on real-world information here.

Richard Parker is the author of the How to Buy a Good Business at a Great Price series. As President and founder of Diomo Corporation – The Business Buyer Resource Center, his materials, seminars and consulting have helped thousands of business buyers realize their dream to buy a business.

The secret behind the establishment of solid, long-lasting and productive relationships in the business world is the ability to exert influence without appearing to be trying to exert authority. Not surprisingly, key account management training should help to show you how you can exert influence in any relationship, but should definitely focus on the amount of time and effort that you need to put into preparing, before you set out to engage with the prospect. Pharmaceutical sales can be a particularly difficult industry to deal with, especially when the representative tries to convince an end-user about a particular product. Powerful forces can be at play and often a diverse set of emotions come to bear on any decision, so that the sales representative has to be armed with a lot of preparatory work before he or she can expect to attain success.

Many healthcare professionals, pharmacists and practitioners have become rather jaded, often as a consequence of saturation, overkill and poor sales and marketing techniques. It is safe to say that the average professional does not look forward to meetings with pharmaceutical reps, which can be all too frequent. This makes the pharmaceutical sales rep’s job a lot more difficult, as influence must be exerted without any posturing or undue articulation.

Consultants who provide pharma training to sales representatives must focus on building confidence and must ensure that the rep understands the importance of preparation. You have to know what your endgame is and what you want to achieve, very clearly. Every client is different of course, but the representative must know how to differentiate and approach from a different angle, even if the product is essentially the same. The professional may have many different ways of saying “no,” but the rep has to be prepared and be ready to assert the position without appearing to be dominant.

It takes a lot to build a foundation of influence, through a process of preparation and subtle action. Maybe the rep will have to work through gatekeepers within the target organisation along the way? It is very important to be proactive and to show that you understand the challenges that face the client. You have to take into account numerous factors, all around the periphery of the situation, some of which may not have a direct bearing on the ultimate goal, but may be necessary to help you achieve your outcome. All this work will pay off as you will end up making a position of trust, an essential prerequisite, as taught during key account management training.

If you have a good idea what your prospects will say to you when you meet with them, you can have your position prepared in advance and can field their questions and any possible objections. Put a clear and palatable solution to them, one that is likely to meet their ultimate needs, as well as satisfying your objective in closing the sale. If you have built plenty of flexibility into your position, you can afford to give way if needed, so that you create a joint feeling of collaboration between you both, as you cement the perfect relationship of the future.

Alan Gillies is the Managing Director of L2L Consulting, specialising in enabling pharmaceutical companies to achieve new heights of productivity and performance, throughout all levels of management and revenue generating activities.

To buy business assets can be a daunting prospect, especially if you have not done this before. In many respects, starting your own operation from scratch can be more difficult, but understand that here, you are taking on the liabilities of somebody who you do not know, essentially! To start off, you will be presented with many internal documents and will be able to look at the inner workings of the business for sale, but you must essentially be able to read between the lines and must not veer off-line, so a due diligence checklist is essential.

While a majority of business owners are enthusiastic and diligent people, have put a great deal of effort into their creation and would love nothing more than for the business to be continued and nurtured by a careful owner, you can never assume that this is the case. Please don’t think that this means you have to assume the worst in all cases, but it does unfortunately mean that you cannot take any statement at face value and you must look for proof in all cases to back up claims made. Expert analysis will come in very handy here as you get ready to buy a business and you should seek out business experts, accountants and financiers right now.

Here, your primary purpose is to set a value. Both parties concerned, the seller and the buyer, will undoubtedly have a different interpretation of the business’ value. You will not come to an agreement or deal unless both parties are happy, but always bear in mind that you have to set the specifics under which a deal is likely to be made.

If you buy a business, a number of steps have to be taken as you go through your due diligence checklist and as you proceed, all the inner workings of the business will be revealed to you. You may hear references made to industry benchmarks, and they may be useful for information gathering but you should not rely on them. In the majority of cases you will always want to rely on the most recent data and while there are many documents to check, the financials are of paramount importance. You may look at a particular business asset and think it is very interesting to you, but you should not skim over some of the less palatable figures that you are presented with under any circumstances.

When you’re looking at the value of a business for sale, some of the more important factors include the scale and the level of services available, the potential for business expansion, the age of the organization and the reputational impact in the marketplace. Calculate the level of competition, both industry-specific and geographically and in many cases the most important of all, its location. If the business you are considering is principally Internet-based, it may not even have a “bricks and mortar” location. Certainly, a physical location is not important in this situation, however you may have to undergo an even more thorough process of due diligence.

Time spent going through this process of revelation as you work your way through your due diligence checklist, will be well worthwhile. This entire process may take you weeks rather than days, especially if you need to analyse daily operations, client interaction and staff behaviour, for example. Be prepared for a lengthy process and you will not become overly anxious to consummate an early deal.

Richard Parker is the President and founder of the prestigious Diomo Corporation – The Business Buyer Resource Center. His celebrated materials, seminars and consulting have encouraged thousands of aspiring business buyers from around the World to pursue their dream to buy a business.

Some enterprising individuals are put off by the thought of buying an existing business for sale, as they see it as a veritable leap into the dark. The entire concept can be very alien if you’ve never been involved in these types of transaction before. After all, it is not like buying a more tangible product like a vehicle or a house, where in many respects “what you see is what you get.” A business valuation can be composed of several intangibles as well as inspectable assets and in many cases goodwill factors into the equation. Goodwill certainly comes into the equation in a service related business, as does a good client list and as such your process of due diligence will require you to explore and reveal quite a lot as you inspect different documents accordingly.

It’s important to remember that there are two distinct and different viewpoints. The seller will have a clear indication of the worth that he or she places on the business. This may often be inflated by a natural enthusiasm and the sheer amount of hard work and dedication that may have been put into the business to this point. While you should always maintain an element of respect for the sellers’ point of view, you must look at all documentation and evidence in the hard light of day and understand that it is up to you to determine if you should buy business interests according to the specific value you set.

When you decide that you want to move forward and investigate whether to buy a business of interest, understand that this may be a lengthy process. At this time, you had better have a good level of common sense and humor and be ready to communicate at length with the seller.

It is highly recommended that you bring in expert advisers and utilize proven resources, especially if you have no real experience of running a business in this line, or niche. This is not to say that you will simply hand off all the work to these advisers, barely looking at the documentation presented to you, as the decision-making must in the end be made by you and you alone. The financial documents and all of the paperwork must be reviewed by you first to be sure that you have a great feeling initially before you hand them over for further processing by your experts.

Always be wary if some of the financial documents are either missing or incomplete, or are not balanced and reconciled correctly. Certain precedents must be maintained and accounting procedures completed. You may be asked to sign some non-disclosure or non-compete documents before these are made available, but the financials are the rock upon which everything else is built.

Each and every operation is different in its own right and no two businesses are the same. There are so many different events that can come to bear to create such a variety of external influences and situations at any time. Expect to uncover some unusual facts and figures or surprises and remember that, while industry benchmarks are interesting, a lot of the information you discover here will be a function of real-world activities.

Richard Parker is the President and founder of the Diomo Corporation – The Business Buyer Resource Center. His inspiring materials, seminars and consulting have assisted thousands of business buyers with achieving their life long dream to buy a business.

Over the years, a gas station has been seen as a reliable investment, most especially when the price of gasoline was relatively stable and by world standards was seen as low in the United States. In the past, there wasn’t so much pressure to cut down on oil sales or to be selective in our energy use, due to carbon emissions and consequent global warming effects. Now, however, conspicuous energy consumption is seen as being very bad policy and as gas prices have forged ahead in recent times, we’ve even started to look at electric or hybrid vehicles as alternatives. Having said that, our society will continue to rely on gas powered vehicles for our transportation in the future and the typical gas station will develop into a destination for a variety of other products and services.

This business type is very reliant on its location, which you must bear in mind when looking for a gas station for sale. You might think that the value of the location is obvious, but if you talk to local authorities before you go too far, you will be able to see if events such as road construction would factor into your equation, or whether certain environmental issues need to be addressed including storage tank upgrades, or if there have been past issues with litigation. In certain circumstances, these could decimate your income!

There may not be a significant margin when it comes to a unit of gasoline sales, so often the value of a gas station when you buy a business will include ancillaries and other products or services. If the location you are looking at is not so advanced in these respects, consider the potential. Could you enlarge or install a convenience store, or license it out to another organization to handle it for you? Is it possible that you could build a very good quality car wash on the property and achieve revenues this way?

To buy gas station business assets successfully, note that operations that are known to be full service (gas, car wash and c-store) will generally command up to three times whatever the owner benefit figure is. Owner benefits are referred to as salary, profits plus any perks, adjusted for depreciation, interest and any capital expenditure you may be forced to make. A smaller or simpler establishment may be of interest to you, due to the additional potential and in this case you might only expect to pay one or maybe two times the owner benefit.

Be careful when you look at the business financials, refer to your supplier contracts and have a good conversation with the landlord in advance. Many deals trip up at the landlord/tenant stage, as the landlord often takes it upon him or herself to try and ensure that the incoming new owner is up to the job of making the business a success!

During the process of observation, you must be very aware as you observe what is going on at the gas station. Be careful if you see the owner working “hands-on” for considerable periods of time. Also make note of any family members putting in a lot of effort as they may be being paid under the table, or below market, or not at all and you may have to recruit paid staff to do their jobs when you take over. Make sure that you observe the busier time periods, counting traffic and people, so you can gauge the potential accurately and know how to create a good offer.

Richard Parker is the President and founder of the Diomo Corporation – The Business Buyer Resource Center. His inspiring materials, seminars and consulting have assisted thousands of business buyers with achieving their life long dream to buy a business.

It’s no longer acceptable for a pharmaceutical company to operate according to the mantra that “bigger is better,” based on the concept that the more people engaged in the marketplace, the better the return. There was a time when pharmaceutical companies used to challenge each other based on the size of their workforce and there was an assumption that such a volume would equal adequate revenue and a rate of return that would satisfy the corporate accountant. However, in many respects this approach has led to saturation in the market, even as the market itself changes its characteristics. Today, much more emphasis must be placed on marketability and the promotion of niche products, with an accompanying rise in demand for specific training, rather than the use of a ‘broad paintbrush’ to accomplish everything. Sales force effectiveness is coming under scrutiny like never before, as it is realised that an oversized sales force could not only be neutralising, it could be detrimental to the success of the company.

These days, pharmaceutical sales training falls into two definite categories — education relating to the product itself and technical training in the area of sales and marketing technique, with the emphasis on the latest cutting-edge approaches. The salesperson should not forget that the ultimate goal is to win, but it’s no good accepting a signature on a sales contract at whatever cost. The value of the new contract must be assessed in terms of its strategic goal and logistical impact, quite apart from its economic benefit. It’s quite possible that a profitable sale, when viewed narrowly, could be far from as beneficial when all the other factors are taken into consideration.

These days there is not so much difference between success and failure, as margins are so thin and therefore sales force effectiveness is a highly important metric. Experienced consultants should be engaged to help in this facet of pharmaceutical sales training, to increase productivity, cut expenditure and boost morale among the sales force. Motivation is a very delicate subject and is far from just the provision of relevant financial bonuses for the salesperson. Indeed, sometimes financial compensation is not a primary driver and the organisation must be able to determine what really pushes each individual on the sales force. More often than not, a goal must not be infinitely achievable, or the sales person could be subconsciously held back as progress is made.

Sales force effectiveness impacts sales volume, related expenditure and profit margins, so poor performance in any one area can have far-reaching implications within the others. An organisation can start by assessing its current situation, looking at the metrics used to determine success or otherwise and how these very metrics may, by themselves, be contributory to the problem. Size the sales force correctly, so the territories are adequately serviced and the company’s voice is heard to best effect. How many sales calls does the salesperson make on any given day and is an inordinate amount of time spent travelling or on other non-productive activities?

Whether engaged in detailing or not, every single moment that the salesperson spends with a professional should be optimised and this should be a cornerstone of key account management training.

Alan Gillies is the Director of L2L Consulting, an elite pharmaceutical consultancy firm which specialises in Strategy Development and Implementation Excellence for prestigious multi-national organisations.

Sales force deployment can be segmented into a number of different areas and should be analysed, category by category to see how effective the force actually is. Executive training is of primary importance to ensure that the individual is fully up to speed with details on the product, has great personal inter-communication skills and the company should always ensure that it has set up an effective territorial allocation as well. The sales force may not be as effective as they could be subject to poor designation of individual territories, bad alignment or excessive travel times. A sales executive must call on all his or her artistic skills to ensure that the interaction between the executive and the client is as effective as possible, but the “battlefield” needs to be established through technology and planning, first of all.

A pharmaceutical company must be fully in possession of all the information, the issues and constraints that could stand in its way when it comes to optimising its sales force. It should have clearly set objectives and goals and these should be established based on prior history, realism and the input of adequate intelligence. To gain as much targeted experience, first-hand knowledge and support as possible, the company should engage the services of the pharmaceutical consulting firm for best effect. Is the overall target realistic and have objectives and goals been fully audited before work is engaged? In addition to a realistic assessment of goals, how realistic is each individual’s potential within the sales force? Most sales executives in this situation will come with a track record and a prior history should be a good indication of how each individual person may perform. Once the very best individuals have been selected, territorial allocation should follow.

Sales force deployment requires those in control to look back into the past. Executives should be counselled as this assessment is being compiled and each should be required to contribute time management snapshots. It is rather difficult to come up with an optimal alignment and subtle changes are often necessary, but remember that even the smallest change can result in a big potential gain, whether in profits or otherwise.

Due to the sheer cost of running a sales force, it should always be optimised effectively, as needed, to maintain maximum productivity. In most cases, pharma consulting suggests how these levels should be set and these considerations are based on experience, prior knowledge and benchmarks, which may then be fine-tuned.

To maximise revenue potential and increase sales, effective sales force allocation is absolutely essential. Traditional ways of approaching this might simply be too costly and also may not produce the intended results reliably. The pressures evident in the modern pharmaceutical and healthcare industry are just too substantial to allow an organisation to overlook the underutilisation of its resources.

The goal should be to optimise the amount of face-to-face selling time that the sales force executive is able to spend with both existing clients and prospects. Within optimised territorial planning, individual time management skills will be stressed by pharmaceutical consultants and training in this area should be an ongoing process. By maximising individual time and minimising travel time, administrative burdens and other unproductive interferences, the sales executive will have every opportunity for achieving their goals.

Alan Gillies is the CEO of L2L Consulting, a cutting-edge pharma consultancy firm which specialises in optimising productivity and performance within international companies by applying tailored organisational strategies.

There is far too much at stake to take a passive approach to the organisation of a company’s sales force, and senior management should ensure that they are well aware of the effectiveness of the operation and are adequately placed to make changes as and when necessary to improve. It is said that the actual cost of a sales call is in the region of $400 or more and as there’s so much at stake, the sales executive must be fully efficient in everything they do, without question.

A good sales executive must be well trained when it comes to the intricacies of sales closure, should have high class communication skills, be a people person and self-starter, but if poor methodology is used by the pharmaceutical company employer, all these skills can be put to waste. In other words, poor deployment could make the difference between a company just surviving or pushing on ahead, celebrating the fruits of its labour.

The good news for the pharmaceutical company is that by leveraging existing assets, a significant difference could emerge. Indeed, it’s amazing how even small improvements, when made in significant areas, can reap amazing dividends. To the untrained eye, the sales force may appear to be effective, but highly skilled pharmaceutical consultants will be able to see how inefficient they really are and can advise the organisation in all the various areas necessary for improvement, helping it to move forward.

There are many different fundamental aspects to sales force effectiveness. For example, optimal sizing of the workforce, optimal allocation of individual efforts and optimal alignment of sales territories, all play the part. A pharmaceutical consulting firm knows through experience how important it is to optimise, drawing on experience gained in business over all the years, through case studies and by an ongoing review of policies, procedures and advancements. No longer is sales force optimisation an exercise to be conducted with pen and paper, but rather digital products and software solutions should be engaged with potentially powerful results. While plans are being incorporated, internal intelligence should be brought in and everything incorporated prior to the actual launch.

Looking back, workload allocation data from previous seasons and historical performance charts can help to reveal the optimum size of the sales force. This should be engaged with market conditions, both current and projected and also fine-tuned according to the company’s product mix and plans for expansion.

Generally, pharma consulting covers many different facets and, of particular interest to the company, should help to reveal the best time management practices for the freshly optimised sales force. Schedules must be optimised as keenly as possible and each individual within the sales force should be trained to ensure that they take advantage of every block of time available, while supervisory staff are able to track, compare and advise accordingly. After eliminating potential overlaps and unbalanced workloads, the focused sales team can be ready to get out and work, using their new-found skill set and internally produced intelligence to overcome the competition. The cost of a sales call is not going down by any means, so it makes sense to contain costs as best as possible.

Alan Gillies is the Managing Director of L2L Consulting, specialising in enabling pharmaceutical companies to achieve new heights of productivity and performance, throughout all levels of management and revenue generating activities.

To determine whether a sales force is truly effective takes a certain amount of skill, quite a lot of information and the ability to accurately determine potential. A market response matrix can be composed when you assess market potential and calculate the amount of selling time available, determined by realistic hourly allocation according to the number of people on the team. In the past, this was often a time consuming and error-prone process, conducted with a spreadsheet around the table, but there are far more productive ways to approach this issue these days.

It’s essential to align territories correctly if a sales force is to be effective at all. This will involve the definition of boundaries, bearing in mind balanced workloads, compact and contiguous territories and a minimisation of travel time. Even though this may sound fairly clear, it’s often not so, and unless the sales executive’s time is protected from waste and fully optimised, the company simply won’t achieve its full potential. Without proper territorial alignment, the sales executive could be faced with having to deal with far too many potential customers. This will undoubtedly result in a net loss in terms of productive time, as the high workload will result in ineffective interaction with individual clients. The opposite is also true, as if too few customers are allocated to the executive, potential can be wasted and this can be really unfortunate if the allocated executive is known to be a top-level and highly productive person.

Without a comprehensive roadmap showing it the way to go, the pharmaceutical company should not deploy its sales force. This is all well and good, but the business executive at the top level has so much on his or her plate anyway and this can be a great challenge. It goes without saying that the business chiefs are interested in sales force effectiveness, but they should get help from pharmaceutical consultants to help them prioritise effectively. The pharmaceutical consulting firm will show the business executives how to prepare adequately, how to plan and optimise the workload of the sales force. Invariably, pharma consulting draws on many years of experience, training, education, industry knowledge and front line “street smarts,” enabling the company to be ready to do battle from day one.

A company’s sales force should not be deployed unless a number of criteria have been met, including strategic alignment, both current and future, goal and objective auditing, data incorporation and resource deployment, human and otherwise. This is where an honest assessment should be made of the potential, along with the anticipated workload for each individual. Any current deployment of resources should be highly criticised to expose any inequities in territory alignment.

In an ideal world, members of the sales force should each have a excellent and very productive track record. The sales executive isn’t responsible for territorial alignment or necessarily to seek out new clients within. It’s up to the pharmaceutical company executives, in concert with pharmaceutical consultants, to set adequate goals and to make sure that they have laid out the matrix to take into account maximum potential gain.

Alan Gillies is the CEO of L2L Consulting, a cutting-edge pharma consultancy firm which specialises in optimising productivity and performance within international companies by applying tailored organisational strategies.