Founded in 2012 by Paul Herman and James Caan, one of the UK’s leading entrepreneurs, Bluebox provides expert advice and quality services for business owners on their journey towards the sale of their business and at the point of exit.
We hope you enjoyed our previous blog on Bluebox’s ‘3 great sectors to invest in’ and look out for our blogs over the coming months on other various subjects that are relevant to the world of M&A!
At Bluebox we often ask what percentage of sale processes collapse and the fact that a staggering 80% of company sale processes collapse before they reach legal completion (according to a recent study by Harvard which is further supported by independent Bluebox surveys), provides evidence that advisers are getting something wrong when they are trying to sell businesses.
A lack of focused planning means that many sales processes are doomed for failure even before they start. The financial and emotional costs, resulting from an aborted sale process, can be significant and everything possible should be done to maximize your chances of a successful sale.
However, as well as mitigating the risks of a collapsed sale process by addressing (well in advance) the matters that will inevitably attract the attention of some due diligence, there are several things that business owners can do to actually increase the price at which they will ultimately be able to ‘sell up’.
Enhancing the value of a business is not only about boosting profitability in an actual year of sale, far from it in fact! In our team’s experience of selling more than 110 private businesses over the past decade, we firmly believe that buyers will almost always attribute value to a wide range of other factors above and beyond profitability; such as the visibility of future earnings, the breadth and stability of your customer base, the strength of your management team, and also, critically, the size and credibility of your opportunity map.
Bluebox advise almost all our clients, who are contemplating a sale of their business within the next 36 months, to consider at length the way in which they will present their “opportunity map” to buyers i.e. what does the next 36 months look like AFTER a sale. After all, it is the future that an acquirer is buying and that which incoming investors are likely to be interested in.
Creating an opportunity map however, is not just about putting down on paper a list of the great ideas that you have had for developing a business under someone else’s ownership. Critical in any opportunity map is the way in which it can be presented to be credible. Credibility is vital and presenting growth opportunities that are ‘unproven’ (and no more than just high-level strategic thinking) may do more harm than good.
Start thinking about how you will depict your opportunity map well in advance of a sale and do ensure that the opportunities presented are reliable and ‘tested’, at least to some degree, in advance of going to market. In doing so, an opportunity map will stand the test of credibility and the price you achieve on a sale will be far greater as a result.
To conclude, we would also like to take this opportunity to invite you to our breakfast event which delves into how to prepare a business for sale to maximise value and achieve the highest possible return.
We will be discussing the key stages involved in a sale process, with guest speaker, FD Melissa Foux, who has sat on various boards including Gü, during the sale process. Please see below:
• Is your Board ready to sell?
• Why do most business sale processes collapse?
• What will an acquirer attribute value to?
• How will acquirers value the business?
• What is due diligence and how can you help a Board to prepare?
• Key stages in a sale process
• Expert’s view from an FD Perspective: hear from Melissa Foux
Date: Wednesday 28th November
Time: 8:30am – 11:30am
Venue: Goodman Derrick, 10 St Bride St, London EC4A 4AD
Click here to register
The event will be hosted by Paul Herman, Founder of Bluebox Corporate Finance. Paul has sold over 70 private businesses during his career, with values ranging between £2m and £200m, and across a wide range of sectors. This includes a number of well-respected UK businesses such as Models Own, Gü, Princess Yachts, Mappin & Webb, Smythson, Watches of Switzerland, TXM Plant and The British Retail Consortium.
We do hope to see you there.
The Bluebox Corporate Finance Team