+44 (0)1299 405999
john@strategic-business-exits.com

Author: johnk

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A new, professional M&A Advisory service for smaller SMEs:

Having just finished my gap year (actually it was a restrictive period after leaving the franchise I was with for 5 years but ‘gap year’ makes me sound younger), I am now back and open for M&A Advisory business.

A business asset is as important as a pension and I think selling businesses should be a regulated profession. However, it’s unlikely this will happen in my working lifetime so, the best I can do is offer SMEs an M&A Advisory run by business people, for business people.

Smaller SME business owners with sales of between say £1m and £5m, are often over-valued and under-serviced but here is what Strategic Business Exits Ltd and its associates will offer smaller SME-business owners from today:

  • A small M&A Advisory which will provide a professional service similar to that which larger businesses might expect from a Corporate Finance firm
  • A personal and bespoke service delivered by seasoned business people. We have been through 6 business exits and 8 acquisitions of our own, so can fully empathise with business owners in what can be an exciting but fraught process
  • Our clients won’t be handed down to back-office staff because we don’t have any – what you see is what you get
  • Professionally-produced, fully-researched and realistic valuations
  • We don’t publish a price, we invite offers
  • Researched and targeted off-market buyer search
  • Targeted marketing (if appropriate and combined with the above)
  • Quality, not glossy, marketing collateral with content aimed at what buyers need to see in order to quickly evaluate an opportunity
  • Checks on buyers, including access to funding
  • Exit planning advisory – concentrating on the twin pillars of value & preparation
  • Acquisitions advisory, helping clients grow through acquisition
  • Network of buyers, funding providers, wealth advisors, corporate lawyers, influencers and other professional associates
  • We make our living by completing business sales but can only handle a limited number. If we don’t think we can sell a business, we won’t take it on. Maximising up-front retainer fees is not the aim
  • Retainer fees will be spread over 6 to 12 monthly payments and credited back from success fees at sale
  • 12-month agreement but with a 6-month break clause so, if it’s not working for either party, we can simply part company

I’m pleased to say SBE will be bringing at least 5 sell-side mandates to market over the next few weeks, with more in the pipeline.

If you’d like to discuss any of the services above, or would like to be added to our buyers, funders, or associates lists, please email me: john@strategic-business-exits.com

Last but not least, many thanks to our network of associates for your help and support. We look forward to working with you to help as many SME business owners as we can over the next few years.

News

5 More Ways to Make Your Business Valuable

Following on from our earlier post on 5 Great Ways to Add Value to Your Business, here are 5 More Ways to Make Your Business Valuable.

But first, and to recap, the previous article mentioned 1) building repeat business 2) making the business less dependent on you 3) making your business cash-generative 4) building scalability and 5) taking care of the relationships that count. Clinton Lee, a business broker adviser, provides five more tips:

6. Pay lots of tax. Businesses try to construct their accounts to pay as little tax as possible. This is a mistake. As counter productive as it may seem to pay more tax than necessary, it’s a good idea to do so in the run up to selling a business. Declare an additional £1,000 in profit and you’ll pay £190 more in corporation tax but you’ll increase the value of your business by several multiples of £1,000. As an illustration, if a buyer has valued your business at 5x net profit, you’ve lost £190 in tax but gained £5,000 in value.  It’s a no brainer. Even if for several years you’ve been declaring “more profit than necessary”, you’ll still recover all of it and then some when you sell!

7. Keep immaculate records. Buyers love good records as good records usually indicate a well run business. Accounting records should be computerised and lend themselves to easy analysis and the extraction of intelligence / breakdowns / management data. Financials should ideally be supported by other documentation such as budgets, projections, a business plan, contingency plans, growth targets and strategies etc. Buyers also like to see bills being paid on time, banking covenants being met, debtors being followed up. Good control over legal, HR, tax, environmental and regulatory related records and documents is also key. Proper operation manuals, guidelines, company rules etc., say a lot about how your company is run.

8. Related to the very first tip about building repeat business is building recurring revenue. Having repeat customers is great. Having them signed up to a subscription payment plan is even better – it’s repeat customers on steroids and adds significant value to your business. Think recurring revenue is only for SaaS or tech businesses? You couldn’t be more wrong. Even many high street retailers can build some element of recurring revenue into their business model.

9. Remove risk. The higher the risk buyers perceive in your business, the lower the price they’ll be willing to pay. Identify areas of risk and deal with them. Is too much of your turnover coming from one (or a few) key client(s)? Are all your sales being driven by one sales person? Are you highly reliant on a particular supplier? These are all risks that buyers WILL identify when assessing your business. If these risks exist, they will damage value.

10. Use a professional to handle the sale of your business, and get them in as early as possible so they can advise on what needs to be fixed to ensure best price. The value that a good adviser can add to your business is generally several multiples of what you’ll pay them in fees. And the earlier you get them in, the better.

For a no obligation meeting to discuss maximising your business exit, please call me on 01299 405999;
or email: john@strategic-business-exits.com