The administration of Barbeques Galore is a reminder that even iconic businesses can face challenges.
A company’s value is determined by current earnings and future outlook, not past success. For business owners, this highlights the importance of regularly reviewing your valuation, maintaining strong financial performance, and having a clear exit strategy.
Barbeques Galore was a household name. Founded in 1977, the barbecue and outdoor furniture retailer built itself into Australia’s largest in its category, operating 68 company-owned stores and 27 franchise locations across the nation. For decades, it represented stability, success, and market dominance. Yet recently, the business entered voluntary administration due to liquidity challenges, placing approximately 500 jobs at risk. This wasn’t a sudden collapse caused by external market shocks alone. It was a slow financial deterioration that nobody could ignore anymore. And it illustrates something critical that every business owner needs to understand: your company’s value isn’t determined by what it was, or what it could be. It’s determined by what it’s earning right now.
I’ve spent more than twenty years advising business owners on mergers, acquisitions, and valuations, and I’ve seen this pattern repeat countless times. A business can be iconic, profitable, and culturally significant, yet its market value can shift dramatically year to year. That’s because valuations are built almost entirely on recent financial performance, not historical glory or future potential. No buyer will pay a big premium because your business was thriving a decade ago, or because the industry looks promising next year. They’re buying current cash flows and realistic projections based on current trajectory. Most Australian business owners don’t realise they’re sitting on one of their most valuable assets, something that provides steady income that could attract genuine buyers willing to pay for that income stream. But here’s what concerns me: many owners assume that getting a sale is straightforward, and that their business value is stable. It’s not. If you’re worried about your financial performance, your industry headwinds, or where things are heading, waiting around hoping conditions improve is a gamble. The time to act is whilst you still have options, not when you’re forced into administration.
Here’s what I’d do if I were in your position. Here are the practical steps that can make a real difference:
- Get a professional valuation done every 12 months so you understand where your business stands in the eyes of a potential buyer
- Focus ruthlessly on improving your recent financial performance, because that’s what determines your asking price
- Build a contingency plan now: identify what your exit strategy looks like if conditions deteriorate further
- Consider shifting your equity into alternative investments if your industry is showing structural decline, rather than betting everything on a turnaround. This could mean selling your business, and buying a commercial property. The question is – where is your money best placed?
Beyond these essentials, I’d also recommend stress-testing your business against worst-case scenarios in your industry. What would happen if your margins compressed by 15 percent? How long would your cash reserves last? Finally, engage with advisors who specialise in your sector early, not in a crisis. The owners of Barbeques Galore may have waited until liquidity became critical. Don’t make that mistake. Your business might be performing well today, but is it positioned to outpace your industry’s trajectory over the next three years? And if it’s not, when will you act?