Tatts Group is in a powerful position when a newsagency business with a Tatts agency is for sale as they have to approve the purchaser.
From what I see and hear, the Tatts approval process is opaque. I hear of people approved who are dreadful retailers with few skills and no plan and I hear of people rejected with good retail skills and a good plan.
There does not seem to be a consistent approach by Tatts to people approving. Worse still is that there is no independent review process. Tatts is in the box seat. They can make or break the sale of you’re business. You better not upset them is what many tatts retailers think I suspect. tatts folk are a fragile group as we have seen.
The biggest challenge is for the vendor who is in the situation of completing the hard work to find a purchaser with the money and then being confronted by a rejection by Tatts, from what I hear a rejection often without clear advice as to the reasons for the rejection.
My advice for the best possible outcome is that the vendor and the purchaser work together on the application and the accompanying business plan, and that this is reviewed by a professional third party with experience – not an accountant and not a solicitor as in my experience they are clueless about these matters.
Put in the work on your submission prior to the first submission and you could save month, even a year, of delays.
The application quality demonstrates how much both parties want the transaction to proceed. A good application also provides the best basis for appeal should the inconsistent and fractured processes used by tatts result in a rejection.
Mark,
I am certainly not a fan of Tatts, but when it comes to the vetting of new owners, I have some sympathy and understanding for the position they are in.
The process of selling newsagency businesses has many faults.
It starts with the vendors, who might put some hard work into finding a buyer, but do not put hard work in preparing the business for sale.
It continues with the brokers, too many of whom do not challenge numbers and are happy to sell at any price the vendor suggests to get a fee. Buyer beware is their creed.
It is the same with the banks who may be asked to lend. Their primary concern is security and internal compliance. Meeting targets, gaining new customers and fees is their game. They do not perform a critical review of the business plan.
So, Tatts is often the only person in the chain who have an interest in checking the buyer, the business plan and the viability of the business. And, because of the process, they do this knowing nobody else subjected the buyer and the business to real scrutiny. Plus they are aware the market is full of failing businesses, dodgy agents and dubious buyers, they see the true numbers for the business, they see the false assumptions the conclusions leads to.
Tatts are a shocking organisation and responsible for many bad things. But in vetting new business owners, they to are a victim of the process.
When I bought my business, I did my own due diligence. I prepared a business plan for the bank. I used the same plan for Tatts and received clearance with 72 hours of interview. But what do I know, I’m an accountant !!
Colin from what I hear your experience is not the common experience. Sure they are the only party vetting applications, but to what standard and with what independent oversight? Instances of dreadful operators getting through and good ones being rejected challenge Tatts.
If more vendors did as Colin suggests he’s done, perhaps Mark would’ve had no reason or need to compile this article.
Take responsibility for your own business to achieve it’s success, or you take responsibility for its failure.