How often have you received an approach from a company proclaiming they can sell your business?
Perhaps it offered you a place at a seminar or a ‘free consultation’ with an expert in valuing your company.
Where did the letter or email go? Was it set aside because one day it may be useful, or put straight into the bin?
The business of selling businesses is, well, big business. The key point to recognise is the difference between being ready to sell and being ready to plan your exit. There is a big difference in timing and the steps you need to take.
As a business owner you face multiple decisions every day – some routine, some forced upon you and some because you want to change or improve an aspect of your business. Sometimes alone, sometimes with your team and sometimes with external advice you make many decisions to improve your business performance so that at some point you can reap the benefits when you exit.
What does it take to take on the ownership of the business you work in? Is prior experience essential? If you’ve not owned a business before, can you ‘learn on the job’?
If you are fortunate enough to have an opportunity to become the owner or part-owner of the business you work in, should you take it? What might the current owner consider in formulating their decision to sell to the management team?
From the germ of an idea into a twenty-year journey; in February 2003 Henchards was established. What did we plan, how did it turn out and what’s next?
Henchards’ Director, Ian Parker, tells the story, “I don’t come from a family of entrepreneurs, nor did I harbour grand plans of business ownership when I was a lot younger. I lacked a ‘guiding’ hand when it came to work and business. As a consequence, I had always made ‘what next?’ decisions as each opportunity or obstacle presented itself. Whether through luck, judgement or otherwise I started the business having just left Orange, where for four years I led the multi award-winning customer service team, with an itch to do something differently.
One of the first questions we ask business owners is, ‘Do you have a business plan?’ Most people think of a business plan as a document that’s written for an external audience, usually investors or a bank manager, with the aim of attracting investment or a business loan.
But it’s just as important to have a business plan for your own use, guidance and accountability. An internal plan provides focus and helps business owners to make better decisions. And, when shared with the wider internal team, it helps engage employees and give them an idea of where the business is heading.
In almost all exit scenarios the capability of your management team will play a part in how well you achieve your objectives. Apart from a situation where you are forced, or decide, to close the business an ownership transfer, in whole or part, will be influenced by the team you have built.
An article in The Economist* this week bemoans the lack of business management capability in Britain and highlights this shortfall as a material inhibitor of growth for the country.
One of the most satisfying and rewarding aspects of being an owner manager is seeing the development of your team. To know you have played a part in the progress of key individuals and the team overall is something of which to be proud.
In addition this team development can be a major driver of growth and improvement for your business.
In the realms of exit planning team development has a number of benefits. Three principal ones are explored in our latest article.
This year’s Henchards Christmas business lunch was a great success. A record attendance after over ten years of hosting these monthly events, great fun, people making new connections and money raised through two raffles for our nominated charity Woking & Sam...
Hopefully you enjoy owning your business; financially it works well, it provides work and life satisfaction, and you get additional benefits of creating jobs and being a positive presence in your local community. Furthermore, within the company you have aspiring future business owners and entrepreneurs who have benefitted from your guidance, who may one day take it over.
A question: if you have another five years before stepping back or selling up how would you use it?
It still comes as a surprise when I hear, “I’ll deal with my business exit it when I get there” and, “My business exit will all happen in one go.” But after many years and many thousands of conversations perhaps it shouldn’t. That’s the danger of being close to a subject – the assumption that everyone else sees the world as you do.
Yes, you can leave your business exit to the end, and it may all happen in one go! However, there is a very real possibility of you being disappointed if you take that approach.
We’ve written a number of guides on selected business subjects that will set you and your business in good stead for whatever future you may choose.
These are free for you to download and to make use of in your business, so please help yourself.