Selling Your Business – It’s Not About Timing

Ernie the entrepreneur wants to retire. Ivor the investor offers him £5 million to buy his business. That’s a whole lot of money to Ernie but he decides to wait just in case he can get a better price from someone else. Next year, Ernie is offered £4 million by Connie the competitor. It’s still a lot of money to Ernie but he wishes he’d taken Ivor’s offer.

If you are trying to time the sale of your business so you get the highest possible price, you are likely to be left in one of two camps: either wondering if you could have got more if you’d waited longer or wishing you’d taken an earlier offer. A simple shift in mind-set could banish these musings.

If you went into the sale of your business knowing exactly how much you needed in order to live the personal lifestyle you desired, the decision would not only be much easier, it would follow the kind of logic on which sound business decisions are made.

When Chris Daniels received an unexpected offer to sell his £25 million turnover import and distribution business, his solicitor sent him to Freedom Financial Planning’s Andy Nevett.

“Over the years I’d had three or four different independent financial advisers but my experience and my feeling towards the whole industry was not very positive.” Said Chris. “I was looking for someone I could trust who would do more than a one off meeting, who would actively manage what would hopefully be some more significant investments.”

Andy and the team at Freedom Financial Planning take a different approach when it comes to managing wealth. Long before there any discussions about their unique approach to actively managing investments, Andy gets to know what is important to his clients, what their dreams are and how they like to live their lives. Knowing this he works out how much money his clients will need to keep this lifestyle for the rest of their lives. He calls this ‘knowing your number’.

Andy explained how he armed Chris with enough information to decide whether the offer he had received was worth taking:

“We worked out the cost of his lifestyle, not just for this year, but next year and the foreseeable future, so that Chris knew his number. Once he knew how much he needed for his lifestyle, for him and his family, he could confidently go away and negotiate the sale of his business.”

After almost 25 years spent building the business, Chris was keen to devote more time to his family, buy a yacht and travel the world. The sale of his business would allow him to do this. However, the decision to sell had to make financial sense too.

“Most business owners do it because they enjoy their business but it comes a point where you want to get away from the desk, want to not have to answer that email at 7 o’clock in the morning or take that call at 9 o’clock at night. But you’ve got to have the confidence that you’ve got the funds to do that and Freedom Financial Planning just gave us that confidence to make that decision.”

If you are looking to sell your business sometime in the next five years, ask Freedom Financial Planning to work out your number, as you never know when you will get an offer. Call Andy and the team on 01663 747000.