5 critical lessons I learned when I sold my business

Selling any business can be a lengthy and (sometimes) stressful experience, so it’s important to understand what is involved and be as prepared as possible for the process.

So, why not benefit from the experience of our head of strategic exits, Brian Hill? In this article, he shares the five critical lessons he learned when he sold his financial advice firm a few years ago.

He says: “Embarking on the journey of selling my business was an exhilarating yet quite unpredictable (you don’t know what you don’t know!) experience. So, I’m going to share my insights on five things I learned when I sold my business:

1. Embrace the unknown – prepare for the unexpected

“Selling my business required me to embrace the unknown and prepare for unforeseen challenges. I learned that maintaining a flexible mindset and being open to new possibilities were key to overcoming obstacles along the way.

“I didn’t want my exit to be a Kodak moment (if you know, you know!). One of the biggest obstacles was actually me, myself and I operating in our own echo chamber.”

2. Culture over cash – seek the (almost) perfect fit

“Throughout my journey, I discovered lots of buyers who didn’t align with our culture and values and some who said they did, but didn’t, and one or two who did align. I just couldn’t rely on the brokers to find the most suitable buyer for me!

“Prioritising cultural compatibility (the collective identity as seen and felt by clients, and the working environment for my team) would be more likely to preserve the essence of the business and its long-term success under new ownership. But don’t seek the perfect fit at any cost.”

3. Due diligence – the ultimate test of patience

“Delving into the extensive due diligence process was a true test of patience. I recognised it was important to provide thorough and accurate responses to inquiries, instilling confidence in potential buyers, and enhancing the credibility of my firm.

“If you can get hold of data quickly and easily, your business is probably easy to run, and if it’s easy to run, it’s probably easy to sell. This thorough examination of clients, operations, finances, and compliance required virtual reems of documentation and information, but it ultimately paved the way for a successful completion.”

4. The art of valuation

“Uncovering the value of my firm was a crucial aspect of the process. I had read too many spammy emails from “flash Harry” brokers promising the earth and then some, but it was all clickbait. To get to an offer, buyers need to go beyond the RMAR and annual accounts to consider opportunity vs risk, market conditions, growth potential, compliance, and goodwill.

“Armed with this knowledge, you can confidently go to market, start negotiations, and set realistic expectations. Remember, most offers are just opinions. As my father would say (he ran a public limited company), the real value of your business is realised only when the money is safely in a bank account of your choosing.”

5. Experts in your corner

“Navigating the complex world of mergers and acquisitions required assembling a team of experts in my corner. A specialist lawyer, a helpful accountant, a tax specialist, and an M&A adviser (like The Exit Partnership ?) all play a pivotal role in protecting the seller’s interests and providing invaluable advice at every stage of the sale process.”

Get in touch

If you’re looking to sell your business, it’s important to have a supportive team behind you that wants the best for you, not the buyer. So email hello@melo.co.uk or call 0113 4656 111.