In March 2015, a listener of the Jeremy Vine show on BBC Radio 2 rang the programme to pose a question to Corporate Exit MD Nick Brown, who had landed a regular business spot on the show. He was asked for advice on how to build a business that could be sold in the future.
My number one piece of advice for entrepreneurs is to plan an exit three to five years in advance,” he said. It might sound obvious but you would be amazed at how many successful business owners neglect to consider what they are eventually going to do with their company.
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Indeed, there may come a point when you want to sell your business. While you may have planned for this as part of your grand plan, selling a business is not always a straightforward process. It is thus common to appoint a BTA a professional that would handle all the aspects of the sale.
David Broschomb, chairman of the Institution of Commercial and Business Agents, suggested there was a reason why SMEs should consider a BTA instead of doing it themselves.
“We typically find that a clients view of what their business is worth is very different from the market view,” he said. My advice to anyone wanting to buy or sell a small business would be to use a BTA who has either an ICBA or a Royal Institution of Chartered Surveyors (RICS) qualification, because those are a hallmark of professionalism.
As with any industry, he stressed, cowboys do exist. It is thus essential to always ask questions and check qualifications. But this should by no means take away from the benefits BTAs could provide SMEs.
BTAs are not just about valuing, buying and selling; they act as advisers too,” said Broschomb. We get involved close to the point that someone wants to sell the business, but planning ahead is always key. For example, if you aim to retire at 65 call us two years earlier, because what typically happens is people take their foot off the accelerator.
If someone doesnt want to run the business at full tilt, I advise them to promote or appoint someone else to do it for them, because it’s important to stay successful in order to maximise the profit and, therefore, the selling price.
Read on to find out how one businessman used a BTA to sell his company.