MBR Group and Hospitality – Advising a Rock Solid industry
What a relief it is for an industry specific public accountant to have his or her industry speciality in a field where proprietors interact with their customers in a relaxed and leisurely environment, the industry is financially secure presuming the specific business is correctly sourced and funded and its businesses are available to all prospective first time entrants irrespective of their knowledge background and qualifications. Try and name one other industry which has all of these characteristics!
MBR Group have been through two recessions, including Mr Keating’s “the recession we had to have” in the early 1990’s, and have never had a client in the hospitality industry go broke or indeed experience great financial distress from their business. Now, we would like to tell you that this resulted from our great advice and dedication to the cause however in reality most of the credit for these results can be credited back to the industry itself and the people that it attracts to join the ranks of hospitality proprietors.
Hospitality traditionally, in industry speak, included hotels motels and caravan parks. From MBR’s point of view however, hospitality certainly includes motels and caravan parks and also now incorporates a phenomenon to the southern states of Australia (previously only the domain of Queensland and coastal northern New South Wales) called management rights. Hotels, being the regular corner pub, country watering hole and the more upmarket food orientated bistros and restaurants, we believe generally require a proprietor with some industry experience in food and beverage and a knowledge of the industry to have a better chance of survival. Not so the case for prospective purchasers of management rights, motels, and caravan parks. The ability to relate well to people and to maintain a clean and hospitable destination for customers is 90% of the future success of the business. Sure, as in all businesses, it is always helpful to have some financial, marketing and networking acumen, but people skills and a good work ethic are in most cases absolutely pivotal to success in the hospitality industry.
Clearly, other elements come into play when entering the hospitality industry. You need to be able to find a range of appropriate businesses from which to select your business. It was once very wisely written that you only ever buy one bad business! So, you need a reliable and experienced business broker to organise the right introductions in the right locations and to match these with your financial position, lifestyle requirements and family considerations such as nearby schools family support, etc. The financial accounts provided by the vendor must be assessed by an accountant who possesses considerable experience in the industry. The business must be correctly funded in order that the debt can be repaid in no more than a 10 year period with a minimum of personal assets used as security. Finally, you need a solicitor who has experience in the industry and understands hospitality-based commercial leasing. An experienced hospitality broker can assist you with all of these introductions.
Apart from this, the success of the business is in 99% of cases determined by the efforts of the proprietor. It is a wonderful industry for families specifically those with children, young or old, and can achieve financial security for people within a relatively short period of time. This comes with minimal chance of failure given that the above steps are carried out thoroughly using professional experienced in the hospitality field.
MBR Group specialise in the hospitality industry and have clients and contacts to solicitors and finance Australia-wide. We always provide an initial free consultation to all new clients. From an accounting point of view, we could not more highly recommend management rights, motels and caravan parks as rock solid industries in which to be involved. We spend considerable efforts in assisting our clients to purchase the right business in the right location for the right price. Most of our clients only have happy memories of their time in the industry and, almost without exception, our clients stay in these industries often buying and selling into bigger and better businesses and, in many cases, achieve their long-term security by purchasing their freehold premises.
As reputable accountants we feel the suffering of our clients should they experience financial distress – it really hurts. This is something we protect our clients from at all costs. Being so involved in the hospitality industry protects us considerably from clients suffering financial woes and provides our clients with a wonderful opportunity to have the freedom of running their own business at the same time achieving the financial and personal goals which we all crave during our working lives.