Covid-19 has had a huge impact on business owners and with the spectre of recession looming, many are now considering their futures. 3Sixty managing partner Brian Cremin, says the real work begins after you’ve made your decision.
There is no doubt that Covid-19, and the challenges in dealing with it, have left an indelible impression on all of us. In truth we won’t fully realise the psychological impacts it has had on us for years to come.
For many business owners though, it has been excruciatingly challenging and stressful. Plans for most businesses went out the window in early 2020 as owners and managers watched order books empty, projects cancel, doors close, customers not buying and so on. All these have forced many businesses to pivot (one of the most overused words in the business book during Covid) in order to survive.
The resilience and entrepreneurial style of business owners and managers were constantly being called upon. Self-doubt in the form of imposter syndrome seeped into daily life. And if all this wasn’t enough to be dealing with, the uncertainty and constantly shifting sands of Covid restrictions and lockdowns made it virtually impossible to stick to any sort of a plan.
But now we are well and truly on the road out of Covid so all is well again. But is it?
Energy prices, raw material price increases, supply chain, retaining key employees are all now the new focus. Talk about interest rate increases, inflation, and the dreaded R word, recession. And overlay all of these with the horrific war in Ukraine and is it any wonder an increasing number of business owners are asking themselves “what’s it all for?”.
Many business owners are now asking themselves if they have it in them to spend more years rebuilding their businesses? Have they the energy, the passion, the commitment, and in some cases, the time left to do all this?
Inevitably many are contemplating selling their business, getting out now and moving on. You might think that making the decision to sell is the toughest part but it’s not. Now is when the hard work happens. The big decision now needs to be made a reality.
There are so many questions:
- What is my business worth?
- How do I find a buyer?
- Who can run the business when I am gone?
- How long will this take?
- How do I make my business attractive to a buyer?
- What are my margins? What are my real margins?
- Are we as efficient as we need to be?
- Can I do all this alone, and at the pace that is needed while also making sure “business as usual” continues?
Do you recognise this? Is this how you (or someone you know) is feeling?
Only the very rare and tiny few can do all this on their own and they shouldn’t have to. Get the help you need and get the help you deserve to make this as successful as possible. Don’t necessarily look to your current advisers. Yes, you know them but have they got the right experience. It is vital now to make sure you have the right people around you with experience in preparing a business for sale.
Make sure they are people you get on with and people you can trust. In our experience all too often business owners, having agonised over making the decision to sell, jump straight into “sell mode”. Big mistake. As Roy Keane famously said “Fail to prepare, prepare to fail”.
So having gotten the best people on board, how do you prepare? What should you look at? How do you look at them? What help should you bring around you?
• How to start
The best place to start is with an unemotional, practical analysis of exactly where your business is at right now. Analyse your customers, suppliers, employees, processes, margins, equipment, and be honest with yourself about all of them. This is a challenge because emotion, bias, ego and objectivity-altering stuff like that will keep getting in your way. This is where the right people add their real value. They can give you an independent, objective analysis.
• Asses your own influence
Honestly ask yourself how much of an impact you leaving the business will have on its smooth day to day operation. If you are too valuable to the running of your business, then you need to change that. A potential purchaser will see this as a major showstopper. Ask who can you get to step up and take on the work you currently do? If you have one or more then you are lucky. If you don’t then you better start looking.
• Streamlining the operation
Are all your systems and processes efficient? Are all your customers profitable? If you are completely honest with yourself, you know there is a huge mix of margin across your customer base. This is where the independent, objective analysis of the people you gather around you really plays its part in adding real value to you and your business.
• The sale plan
Having carried out this overall operational review and analysis, the next step will then be to build out the plan to address all the areas which impact on the attractiveness and value of your business to a potential purchaser. And the last piece of guidance, and possibly the most critical piece in terms of the price you get for your business, please don’t start inviting potential purchasers into your world until this plan is implemented, getting traction, showing that it is working, and is adding to your bottom line.
At 3SIXTY we have a dedicated and hugely experienced team who can become part of your team, to give you that independent and objective review and analysis of your business. Our team will then help you build out the plan. We can even help you implement that plan. We love nothing more than helping our clients maximise the value of their business while taking the pain out of all this though working with them every step of the way!