Video 9 – How To Know If Your Business Is Saleable

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Mike Whittle:

Short answer to that one, talk to us. We will spend typically on average an hour with an initial acquirer consultation, going through a number of key areas around their business. And again, within our presentation in the master class, we make a big point of us choosing our clients in the same way that they would choose us. We have to know, essentially, that the business is saleable and the business owner is ready to go to market and that they’re realistic before we take them to market, otherwise we’re unlikely to get them a result.

Mike Whittle:

And in our world, because of the way we work and because we invert the funnel, there’s no point in taking a business to market and wasting their money and time if we don’t believe we can get them the result. When we sit down in that initial consultation, either physically, or in the current world, may be slightly more virtually, what we’d be looking to do is explore the structure of that business. And we’ll typically look in three areas.

Mike Whittle:

We’ll look in the commercial space. Steve talks about website, we look at contracts, we look at construct and the business in terms of their staffing, we’ll look at whether or not there’s a management team in place and whether when the business is sold and the owners step out, there’s still a business there. We’ll look at the finances, we’ll look at the trends, we’ll look at the forecast, we’ll look up any reliance on any particular clients, and we’ll also look at the legal construct, share ownership and distribution.

Mike Whittle:

From all of that, along with a good understanding about their proposition and the narrative that underpins their business, we’ll be able to tell if that business is ready to go to market. And if it’s not [inaudible 00:01:46], we would recommend that person spends their time addressing the issues we identify for them before they go to market.

Rob Goddard:

And we can help with that.

Mike Whittle:

We absolutely can.

Rob Goddard:

Steve.

Steve Barry:

Yeah, it’s an interesting one. Again, I’d say all businesses are salable, but at what price? And for me, the critical piece is not whether a business can be sold, it’s whether the owner’s aspirations are correct, are realistic in terms of what they’re doing. The occasions when I know I’ve walked away from requests for us to take the client’s business, or potential client’s business to market, it’s when their aspirations are way out or where they know there’s a fundamental fault or weakness in the business that they’re not prepared to do anything about fixing. And they sort of want to glaze over it, gloss over it, to try and take them to market. My view would be, no, it’ll come out under DD. You’re better off, in that situation, fixing it first. And if they’re not going to do that, we’d rather walk away.

Rob Goddard:

Yeah. And statistic in the industry, in the UK, less than one in five businesses sell first time. One in five. Four and five failure rate. We’ve inverted it. We’ve reversed it. We’re the other way around, but that’s because we’re highly selective and very honest about what a business is worth and what it’s not worth. And whether it’s salable. But you’re right, Steve, any business is saleable, a low enough price, but I’ve never met a seller who wants to sell cheap, certainly not for a pound.

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Alternatively, If you would like to discuss a potential business sale with one of our Client Directors, please either call Amanda on 0118 959 8224, email agale@evolutioncbs.co.uk or Make An Online Enquiry.

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