Business Partnership Corporate

Author: Chris Green

The true value of an independent valuation

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Located throughout the UK, Business Partnership’s experienced regional partners all offer an important service to business buyers and sellers alike – valuation.

It’s a straightforward enough process, you may think. After all, our over-riding objective is to provide impartial, professional and accurate advice to secure the best outcome for our clients, whether they have a leisurely retirement planned or are embarking on an exciting new business journey.

However, every so often the situations we are asked to get involved in are very different from ‘the norm’ and give our partners the chance to demonstrate their considerable mediation skills.

Business Partnership chairman Alistair Glaze explained: “Our independent valuation service is increasingly in demand across three areas: shareholder disputes, pre-nuptial agreements and divorces.

“Valuations for pre-nuptial agreements can relate to properties and businesses and usually come into play when both parties are getting married for the second time or are more mature. They may each own their own property so there may be a disparity.

“We can also help couples who are getting divorced and who have joint ownership of a business or, for example, when two people have been in business together but one has decided to pull out.

“An independent valuation, rather than one from someone who has links to either party, can take the heat out of a potentially difficult situation.”

If you require a valuation, you’re in safe hands with Business Partnership – our priority is providing honest advice with your best interests at heart.

Contact your local regional partner today to arrange a valuation.

Familiar face joins Business Partnership board

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Regional partner Paul Dodgshon has been appointed to the board of Business Partnership (Management) Limited.

Paul Dodgshon

Paul Dodgshon

In addition to his executive responsibilities, Paul who covers the Manchester Central, South Cheshire, Staffordshire, Shropshire and Mid Wales areas for Business Partnership and Business Partnership Corporate, also has an equity stake in the company.

Chairman Alistair Glaze said: “We look forward to working with Paul over the coming years. His appointment reinforces our collective desire to embrace the experience of our younger regional partners,  whilst providing a plan which will underpin the future of the business into the next generation and beyond.”

Ian Craig has left the board and will continue as a shareholder and regional partner responsible for the Nottinghamshire and North West Leicestershire areas.

Mr Glaze added: “The board and I would like to thank Ian for all his support and wise counsel over the past 16 years. He remains a cherished colleague and will continue to provide training and support for new regional partners joining us.”

Business groups call for post EU vote clarity

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If we had a pound for every time we heard the old wartime adage: “Keep calm and carry on” since last Thursday’s Brexit vote, we’d all be on our sun loungers in the Maldives by now.

Experts, along with people who have an opinion on pretty much everything, have been hogging the airwaves and social media and it is easy to be bamboozled by the sheer volume of claims, counter claims and statistics.

Business Partnership has collated post June 23 responses from four high profile membership organisations.

Our first commentator is Mike Cherry, national chairman of the Federation of Small Businesses, who called for clarity on “what these decisions now mean for business, including how businesses will have access to the single market and the free movement of people and trade”.

Mr Cherry continued: “Nearly a quarter of FSB members export, with the majority exporting to the single market, which means access to 500 million potential consumers, more than 26 million businesses and is worth 11 trillion euros.”

Clarity is also the watchword for Dr Adam Marshall, acting director general of The British Chambers of Commerce.

“The immediate priorities for UK business are market stability and political clarity,” he said.

“All companies will expect swift, decisive, and coordinated action from the government and the Bank of England to stabilise markets if trading conditions or the availability of capital change dramatically.

“Business will also want to see a detailed plan to support the economy during the coming transition period – as confidence, investment, hiring and growth would all be deeply affected by a prolonged period of uncertainty. If ever there were a time to ditch the straightjacket of fiscal rules for investment in a better business infrastructure, this is it.”

A “nervy time” ahead was predicted by Simon Walker, director general of the Institute of Directors:

“It is imperative that our political leaders manage the transition as smoothly as possible,” said Mr Walker.

“The weeks and months ahead are going to be a nervy time for business leaders, so they have to know that the Government is focused on maintaining stability while a new relationship with the EU is established.

“British businesses are resilient and, with their characteristic ingenuity, they will weather this storm. Even once we have left, the EU will continue to be our biggest trading partner, and the first destination for many companies when they start to export. One thing the Government must do immediately is to guarantee the right to remain of EU citizens currently in the UK. Companies do not want to have to worry about losing valued staff.”

Completing our round up is Pip Wilkins, chief executive of the British Franchise Association, who said: “We want to be clear that for us, and for franchising, it is very much ‘business as usual’.

“We will continue to work closely with the European Franchise Federation and reap the opportunities that it affords to guide and inform on franchising across Europe.”

As the political wrangling rumbles on, Business Partnership’s regional partners will continue to work hard for their clients, whether they are buying or selling a business. Find the partner for your area on our Offices page.

Train others and stop the plate spinning

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Many service businesses rely heavily on their devoted founder.

Clients are typically buying their expertise and buying into them as a person but the size of their business will always be limited by the number of available hours in the day.

One way to scale up a service business is to teach others what you know. That’s what Nancy Duarte did when she found herself run ragged trying to grow her design studio in the USA.

Duarte’s speciality was creating memorable presentations. She loved the business but hated the constant demands on her time and energy. Eventually, she documented her working day and created an internal training course.

Once she had taught her own staff to handle the development of the presentations, Duarte turned her philosophy into a book and launched her training division. This led to her being able to build up her service business and employ more staff.

As business owners, we should document our systems and processes for others to follow, but writing our business instruction manual always seems to take a backseat.

What we need to do is stop thinking of writing down our procedures as a chore and instead consider them as key to freeing up time so we can work on growing our business.

Hub and Spoke (Your Business Without You) is one of eight key drivers of your Value Builder Score.

The Value Builder Score is a survey of over 20,000 businesses measuring the finances, opportunities and risks associated with their business, and the offers they have received.

Business Partnership uses the Value Builder System to help business owners increase the value of their business by up to 67 per cent.

To find out what your Value Builder Score would be click here or for more information about our services, contact your local regional partner.

Avoiding the sales ‘superstar’ trap

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To build a valuable business that will one day be sellable, sales need to continue after you’re gone.

In most businesses, this responsibility lies with the business owner and they often replace themselves with a ‘superstar’ salesperson, but there are pitfalls.

If you replace yourself with one salesperson, you’re merely swapping a dependency on you for a dependence on a rep and as a result your business is no more sellable.

When Business Partnership analysed the users of the Value Builder Score – a simple self-assessment test business owners use to understand how to drive up the value of their company – we learned that businesses which could easily replace their leading salesperson are over twice as likely to get an offer to buy their business, compared to those reliant on a single salesperson.

Writ large, you need a sales team – and the faster the better. Here are Business Partnership’s top three tips for building a sales team on a budget:

Charge up front

Good sales reps can be expensive to recruit and train. Before they are fully operational, consider changing your terms to charge some or your entire invoice up front. Or, if you already stagger your billing, ask for a larger payment up front. You might also consider introducing a subscription or service contract model, as most people understand that subscriptions are paid up front.

Divide territory into manageable chunks

Sales territory is an asset of your business and, like any reward, it is easy to give and harder to take back. Consider carving up your market into territories that provide enough opportunity for each rep to make money.

Hire a second rep ASAP

Salespeople thrive on competition. If you can demonstrate to a buyer that your company has sales driven by a team you will have a much more sellable business.

Switzerland Structure (structural weaknesses) is one of eight key drivers of your Value Builder Score.

The Value Builder Score is a survey of over 20,000 businesses measuring the finances, opportunities and risks associated with their business, and the offers they have received. Business Partnership uses the Value Builder System to help business owners increase the value of their business by up to 67 per cent.

To find out what your Value Builder Score would be click here or for more information about our services, contact your local Business Partnership regional partner.

Loyalty bonus for customers can boost your business

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Asking people to pay to join an elite group of your best customers can increase your turnover, as it encourages them to buy new products and services and in turn provides a healthy cash flow boost.

Amazon Prime is a perfect example. When it started, for £49 a year, it gave customers free one day delivery, upgrades to express and evening delivery for a set rate and more than 350,000 free Kindle books to borrow.

More than ten million people worldwide have signed up for Amazon Prime programmes, which makes Prime a £500 million business. Like most memberships, payment was upfront which gave Amazon a massive cash injection.

Many businesses promote some sort of loyalty programme, e.g. buy nine coffees and get the ninth free. The difference with Amazon Prime is they are charging customers to sign up for their club and the fact that they do pay to join changes their buying behaviour in an effort to claw back their membership fee.

Do you have an elite club that your customers would pay to join?

If you take the time and effort to build it right, not only will the club itself make a profit, but it will also provide a boost to your cash flow and create a band of loyal customers, who buy more because they paid to become a member.

Recurring Revenue is one of eight key drivers of your Value Builder Score.

The Value Builder Score is a survey of more than 20,000 businesses, measuring the finances, opportunities and risks associated with their business, and the offers they have received.

Business Partnership uses the Value Builder System to help business owners increase the value of their business by up to 67 per cent.

To find out what your Value Builder Score would be click here or to find out more about our services contact your local Business Partnership regional partner.

Can your business run without you?

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Business owners are often wrapped up in its day-to-day running because it is something they have put their heart and soul into.

However, this devotion and dedication can be a disadvantage when it comes to selling a business.

Research from Business Partnership’s Value Builder Score survey reveals that companies able to perform well over a three month period, without the owner present, are 50 per cent more likely to receive an acquisition offer than companies which suffer when the owner is not there.

What should owners do to avoid this situation?  Firstly, they need to know why this is often the case.

Having an absent owner forces companies to develop processes and procedures which are in turn more likely to give staff the confidence to deal with issues on their own.

In short, it gives the business a self-sufficiency that is likely to be more attractive to potential buyers.

So how does a business owner start to relinquish direct control? Let’s consider the most pleasant option – a holiday.

A lengthy break without any company involvement will test how well the business runs without the owner’s involvement. In fact, the holiday might well be worth the fire-fighting afterwards because it can highlight weaknesses and potential strengths in the business structure which can then be worked on.

The key is to optimise sellability and making a company more independent of its owner is a major part of this.

Hub and Spoke (Your Business Without You) is one of eight key drivers of your Value Builder Score.

The Value Builder Score is a survey of more than 20,000 businesses measuring the finances, opportunities and risks associated with their business, and the offers they have received.

Business Partnership uses the Value Builder System to help you increase the value of your business by up to 67 per cent.

To find out what your Value Builder Score would be click here or for more information about our services contact your local Business Partnership regional partner.

Discover your niche and grow from there

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When you look to the future, do you consider where your growth will come from? Will you find new customers or sell more to those you already have?

The answers to both these questions can have a major impact on the value of your business.

Business Partnership studied the research from nearly 14,000 business owners who completed their Value Builder Score™ questionnaire. On average, those that had received an offer had their business valued at 3.5 times their pre-tax profit.

Delving further, we reviewed businesses with a historical growth rate of 20 per cent or greater and their multiple of profit improved to 4.3 times pre-tax profit.

The real improvement came when we took a closer look at companies offering a unique product or service. These niche companies received average offers of 5.4 times pre-tax profit – approximately 50 per cent more than average.

Growth companies often strive to build turnover by offering a wide range of products and services. However, when a strategic acquirer buys your business, they inherit something that is not easy to replicate.

Large acquirers will place less value on sales derived from products and services that you both sell – and will pay more to have access to a new product or service, which they can sell to their customers. Valuable companies find a way to deliver profit in the short term, while at the same time focusing on what drives up the value of the business.

Monopoly Control (the value of a USP) is one of eight key drivers of your Value Builder Score, a survey of more than 20,000 UK businesses measuring the finances, opportunities and risks associated with their business and the offers they have received.

Business Partnership uses the Value Builder System to help business owners increase the value of your business by up to 67 per cent. To discover your score, click here or for more information, contact our regional partners.

New regional partners join our team

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Business Partnership Corporate has appointed new regional partners to its nationwide network of business brokers.

Stephen Boyle

Stephen Boyle

Stephen Boyle will be responsible for the Surrey and North East Hampshire regions while John Knight will be covering Birmingham South, Wolverhampton and the West Midlands. Also joining our vastly experienced team is Raymond Blin, who will look after Scotland West.

After spending many years in the building products industry, Stephen studied for a Masters degree in business administration at De Montfort University in Leicester and moved into the sales and distribution sectors. He has also been a business mentor for the Prince’s Trust.

Appointed as managing director of a newly formed concrete company, he was tasked with generating sales from scratch. When the firm had grown significantly after five years, he decided it was time to strike out on his own.

Stephen’s first business in the recruitment sector turned over more than £250,000 in its first year. He went on to own and run other types of companies and fully appreciates the importance of having someone on your side when selling your business.

John Knight

John Knight

A serial entrepreneur, John has launched and developed several companies. After gaining a BA (Hons) degree in graphic design, he began a career in advertising, marketing and brand licensing and, over the past 30 years, has been instrumental in building and selling four of his own small businesses.

John, who is a member of the Institute of Directors, has a thorough understanding of all aspects of growing and developing a business.

“As well as being a creative and lateral thinker, I’m service-led and keen to use my experience to help clients achieve the maximum exit value for their business,” said John.

Raymond Blin

Raymond Blin.

Raymond was formerly national operations partner for two of the UK’s top ten accountancy and business services firms and has also operated in the business recovery and corporate finance sectors.

“My specialism is in strategic management with particular emphasis on assisting companies to grow and I can also help to formalise exit strategies and source potential buyers,” he said.

Working alongside Raymond on the administration and marketing side will be his partner Fiona Best, who has logistics, scheduling and planning experience having run her own fashion and events business for many years.

For full contact details for our new regional partners, please visit our Offices page.

A different approach to selling businesses

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It is all too easy to view the sale of a client’s business as the end of the road – but we all know that does not have to be the case.

Business Partnership can certainly vouch for that as we have had 30 years experience in fine-tuning our approach to the sale and purchase of businesses.

We are keen to build mutually beneficial relationships with accountants throughout the UK.

To start that conversation, we would like to share with you some of the key features we have found to smooth the way to a successful business sale.

With the advent of online trading and the volume and rate at which businesses are changing hands, you may think that the process would be simple and painless.

However, the motivations and emotions involved are strong and the path from making the decision to go to market to actually selling a business is often not without complications.

To address the many and varied issues involved, over the coming weeks we’ll be publishing a series of articles under the following headings: Professional, Hand holding, Support, Trust, Informed and Collaborate.

If you would like to contact a Business Partnership regional partner in your region, visit our Offices page.