Don’t sell out when you sell your business
Selling your business will seem like a daunting prospect, particularly if you want a quick sale. But that should not mean that you sell your business to just anyone. Neal Harper, MD of Sustainium Group, a holding company set up to acquire local home improvement companies in the UK, discusses why it’s vital that you leave your business in the best hands.
The hardest thing for a business owner to do is sell their business. It doesn’t matter if you’ve made up your mind, chances are you will bounce from wanting to sell one minute to having doubts about letting it go the next.
And it’s easy to see why. You will have grown it from nothing, and you will care about it and the people involved in it.
Historically, the motivation to sell up ranged from a cash exit, family reasons, health reasons, or the desire to go and do other things. But the coronavirus pandemic and lockdown will have seen the past few months take a huge toll on business owners.
And having the stuffing knocked out of you, whether it’s seeing customers fall by the wayside or having to see your employees struggle to deal with working remotely, is proving to be a big reason to sell up.
But while you may want to exit with as limited amount of fuss as possible, that doesn’t mean you should sell your business to the first company that expresses an interest. In fact, you should put as much time and energy into finding the right buyer as you would have done for any important business decision that has gone before it.
When you want to exit your business, the danger is for potential acquisitions to be undertaken by people who may not have the best wishes of your business at heart. As you will be attached to your business, and you will want your employees to have nothing to worry about in any sale, understanding a buyer’s intentions is vital.
When businesses look to make acquisitions they’re essentially taking a bet on the growth of the business or the ability of the business to grow, and they’re more likely to take a risk on that if they know the industry inside out. So, selling to a business that knows your industry is equally important.
Over the years I’ve met many owners of window companies who want to sell or retire, but domestic double glazing companies are notoriously difficult to sell. They invariably have huge liabilities which any new owner will have to take on, while most are completely dependent on fresh leads which means they are inherently high risk.
Buyers with experience in the double glazing industry, who have been there and worn the t-shirt, will know exactly what they are buying, and will have experience in how to build and drive businesses like yours forward.
For any investor, the potential of the brand value is essential to any sale and the importance of your brand, and the trust in it is likely to be a big motivator for a buyer.
Your brand should always come first; whether you are torn between your employees, your directors/investors, or your customers, if you do what’s best for the brand then there will be no losers.
Again, engaging with a buyer who knows the industry, and has built and maintained brands in the double glazing industry, will mean your brand (and your business) is in the safest possible hands.
The management team at Sustainium Group have decades of experience in the home improvement industry and can move quickly for any sale, making the process as straightforward as possible. They ensure each business will continue to thrive with the commitment the original owners had. The company acquires businesses that have a good reputation locally with an annual turnover between £750,000 and £10 million, and at least three years trading history.
The business will continue to operate under its own name. They also aim to retain the existing staff, while owners can often be retained on a consultancy basis or even in a key role within the business by agreement.