For those wishing to sell your business in the future, the paramount guidance I can give is to plan way in advance. I developed my company into a market leader over a ten-year period and sold it in a seven figure deal. Planning really is the vital ingredient to a prosperous company sale. Almost from day one of launching your business you should be thinking about selling it.Every company is different but there is one overriding dynamic that will determine whether you will be able to sell your company in the future and that is “have you built your business to sell it?” If you haven’t, it will be that much tougher to find a suitor. Key items in the planning process include identifying the type of business that would acquire your organisation, ensuring that you have a profile in your sector, delivering sustainable 25 per cent profits year on year and retaining staff and clients. If you factor in these fundamental points in your exit strategy you will have a good chance of building a thriving company which will then be appealing to a buyer. It might sound bizarre but a really decent bit of advice is to start at the end before you begin. If you fail to contemplate the end game you will potentially lose value when you attempt to sell your business. Don’t fall into the trap of devoting all your time on the day to day running of your company. Instead, think five to ten years ahead and try and envisage what your sector is going to be demanding and how you can capitalise on it. Make certain that your service or product is a “must have”. Quite habitually acquisitive companies want to buy into either a new sector or buy a product or service that they have failed to develop and which they realise will add value to their own proposition. On a day to day basis you will be developing your business around your clients but don’t forget that there is an even bigger customer out there, someone with a cheque that has got your name written on it with a seven or eight figure sum. Always focus on that ultimate customer, the one that is going to enable you to retire early and walk away from your business. To accomplish this the prerequisite is to look after today’s clients as they will deliver you that final magical customer. Deliberate early on with your accountants how to maximise profits in your business and seek out people like me who have actually sold their companies and tap in to our advice. You can’t beat real experience when planning an eventual sale. Whilst theory is useful the best advice is always going to be from someone who has achieved the dream of selling their business. That is why, having sold my own business, I established Corporate Exit to help business owners sell their company by offering mentoring and creating personal action plans to attract the right buyer. The strategic fact to convey is that selling your company doesn’t just happen. It takes continuous preparation, often over several years. You should also concentrate on putting your business in the ‘shop window’. Quite often a suitor will be a larger rival organisation. So how do you get them to notice you? Phase one is pretty straight forward. You should start appearing in trade magazines, online publications, radio and TV programmes that prospective acquirers are going to be reading, listening to and viewing. To be candid there is little advantage in repeatedly appearing in the local media at the expense of trade and national publications and broadcasters. This is what I call vanity PR. Your neighbour might read about you but the CEO with the seven figure cheque with your name written on it probably won’t. Local media is incredibly important and is really useful for recruitment, staff morale and for your parochial clients. However, unless the acquiring business is located in the region, which invariably is not the case, you need to consider appearing in relevant national and international trade publications and start to become an opinion former in your sector. Similarly you should start to appear in the business sections of the national media both online and print. You also ought to become a commentator on radio and TV. This is less intimidating than it might appear and is actually quite easy. Therefore my first tip is that you seek out a PR company that can deliver national trade, broadsheet, online, social media, radio and TV for you. Ask to see what the PR company has accomplished nationally for other clients and if they can only produce a few local articles run a mile as they will never get your business in front of a suitor. It is essential to appoint a PR operator that can show you tangible national results and a PR organisation that has won national awards for its work. This brings me on to phase two; national awards, rankings and best companies to work for league tables. The guidance I convey to all my clients is that they should enter their businesses into as many relevant national trade awards as feasible. Even a national nomination will start to get your business noticed. When my company won a national award a number of suitors started to approach my business. By positioning your company as a national winner in your sector will get you recognised at the highest level in the right board rooms. It will also help you attract bigger contracts, which will mean larger profits and add more value to your business. There is nothing better than winning a national gong to get you recognised. Likewise, annual rankings in national and international trade publications and the best companies to work for league tables in the likes of the Sunday Times, also help position your business in front of acquisitive CEO’s. In summary, if you start to raise the profile of your company nationally you will find that the credibility and profits will follow. Remember the bigger the profits, the greater the value of your business. Nick Brown is Managing Director of Corporate Exit.
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