Saturday, 17 December 2011

Preparing your business for investors

Business owners often view investors as an alternative to bank finance. In most cases entrepreneurs would seek to raise external equity because they are running out of cash and were turned down by a bank. The only message that investors would receive is that the entrepreneur lost control of their business regardless of how you dress the situation up. If you were an investor, would you want to put your hard-earned cash and invest significant amount of time in such a venture?

So, when is the right time to start raising external equity? And what can one do to ensure that the business is ready to attract and secure investors?

Thursday, 3 November 2011

Succession Planning: Business owners favour MBO as means of selling business

Whilst the economy continues to wobble with an increasing number of vendors struggling to find trade buyers for their ventures, more and more business owners are considering management buyouts (MBOs) as an option of selling their businesses.

Tuesday, 27 September 2011

How can businesses survive in today's economic climate?

In the article “Has Western capitalism failed?” the BBC World Service’s Business Daily programme asked a number of leading figures if they thought whether the Western-style capitalism failed. The answers (and some of the comments) are worth a read. It would appear that those interviewed by the BBC are unanimous in their comments that the system itself hasn’t failed, but rather its interpretation by those who use it.

Monday, 6 June 2011

Breeze Blog by Breeze & Wyles Solicitors LLP: Can't Pay, Won't Pay - How to get results

Breeze Blog by Breeze & Wyles Solicitors LLP: Can't Pay, Won't Pay - How to get results: Cash flow to most businesses in these difficult times is a key business objective. If your business is suffering through slow or non-payers, what options do you have?

You might find some answers on this Breeze & Wyles' blog article regarding debt recovery. One thing to consider when dealing with slow and non-payers is how to prevent this from happening in the future...

Breeze Blog by Breeze & Wyles Solicitors LLP: Business must keep a Close Eye on Web Law

Breeze Blog by Breeze & Wyles Solicitors LLP: Business must keep a Close Eye on Web Law: If you own a website, then you'd be wise to keep an eye on what changes in Web Law might be introduced. Read this article to find out more...

Tuesday, 3 May 2011

Retiring Business Owners Need Not Struggle to Sell Their Ventures

In the article, Shortage of Buyers for Retiring Vendors, in The Telegraph of 13th December 2010, Richard Tyler talks about difficulties that business owners encounter when they are looking to sell their businesses and retire.

He says that vendors struggle to find buyers for their ventures due to the uncertain economic environment and face closing their businesses instead or continue running their firms into their late 60s. Staff may also find it difficult to raise the necessary finance to buy owners out because of bank lending policies.

Although potential investors might not pay the multiples that we saw only 3 or so years ago, there are a few things that baby boomers can do to ensure their comfortable retirement:
  • Business owners ought to start looking at Exit Strategies early in the process. This will allow them to set their goals and targets and monitor their business's performance
  • Set realistic expectations in terms of the price they want for their businesses. When selling a business, most owners will engage the services of their accountants and business brokers. We often see overinflated prices whilst bidding wars commence; however, it is the seller that is left disappointed in the process as their business "sits on the shelf" for months or sometimes years
  • Get an independent valuation carried out early as it will give retiring business owners a better understanding of the areas they may need to improve
  • Vendors may want to consider selling their businesses to staff and should involve their existing management teams in advance to avoid a bitter disappointment when their staff cannot come up with the cash
  • Engage professional services: business disposal experts, such as M&A lawyers, corporate finance specialists and business advisers will add value and help owners to get closer to their target price
  • Review and streamline processes and systems in the business to make it more attractive to potential buyers. After all, investors would be more willing to pay the price closer to what the owners have in mind when the business is running "itself"
  • There is also another option available to retiring business owners: Deferred Consideration. It is often more beneficial and profitable when part of the money is deferred for 3-5 years. The sellers will get part cash up-front and the remainder at the end of the term. This will remove the pressure on the buyer to raise the whole amount up-front, raise more confidence in the business they are looking to buy and make the transaction much easier

Thursday, 31 March 2011

New Eden

I have received an interesting article from a friend and a colleague of mine, Dave Croydon, which I would like to share with you and hope you find it as interesting and thought-provoking as I did...

An acquaintance of mine recently expressed the opinion that anyone who showed any desire to become a politician should automatically be disbarred, as a result, from ever becoming one. It ranks alongside Groucho Marx's comment that he wouldn't want to join any club that would have him as a member.

This was brought back to me forcibly a week or three ago, when I heard interviewed on the Saturday morning Radio 4 programme, Saturday Live, Tim Smit, the man behind the Eden Project - and therefore someone for whom the word 'Vision' can be taken as built in.

He was asked for his recipe for getting the country out of the mire, as opposed to the current lot's recipe of cuts, cuts and more cuts. His reasoned and wholly reasonable response drew mountains of approving e-mails, even before the end of the show, with many exhortations that he be made Prime Minister immediately.

The problem with politicians - it's easy to state problems: less easy to suggest viable solutions - is that very, very few have done much in their lives outside the world of politics, and the exceptions have generally been associated with large corporate Britain. When it comes to the SME market, they may talk a good story, but really they haven't a clue. Even the sainted Vince.

So the sector that represents up to 95% of the British economy's economic output, and by common consent where any growth and recovery will gestate, is being hog-tied by rules and regulations designed with corporate Britain in mind. I've railed about this before (and will doubtless do so again), but the contrast between existing policy and Tim Smit's ideas could not be starker.

So what was he recommending?


Reproduced below is a more or less verbatim quotation of the Eden Project's Tim Smit's recipe for growth. Since I couldn't better it myself, I thought I'd share it with you. I took the precaution of re-visiting it on i-Player, to make sure it's accurate.

Interviewer: "Why is Britain such a risk averse nation?

Tim Smit: "1. Most of the politicians we've got in charge have never had a day job. [That's what I said - Ed]

"2. Most of the people in charge of distributing money have only ever made their money on the back of speculation, such as betting against their own currencies, and have given up the tradition of investing in people who make things with their hands.

"3. This country's wealth was built on the back of men and women who made things, and now it's actually the financial world, which does not trust the men and women who make things; they want to bet on currency.

"4. If you're ruled by an accountancy fear, where you know the cost of everything without understanding the cost of not doing things, you can bring yourself to your knees.

"5.You can kill a company in your desire to constrict access to money, because that's the prudent 'mumsy' way to do things."

Interviewer: "So what would you do?"

Tim Smit: "Blow a lot of money: I'd do exactly the opposite of what is being done now. I'd commit myself in a crash and burn style to transforming the technology and energy infra-structure of this country. By doing it, you will build on what's best in Britain, which is its engineering skill. If you give it that impetus, you'll become a world leader, and the market will then follow you, and the investment will be seen to be worthwhile."

In my next missive, I'm going to re-vist this theme with a few thoughts of my own on, in particular, the existing energy policy of successive governments, and the huge potential for massive structural change that is currently being missed by the usual suspects with little or no vision.

You can listen to the interview at:

Sometimes, the most effective response to any given situation is the exact opposite to the apparently obvious one. Many fortunes have been gained by buying shares or property when everyone else was selling. There are supporters of 'contrariness' who will assert that it is nearly always better to go against the grain of general public opinion. Why would that be? Answers to the e-mail address below.

David Croydon: 01844 238692 or e-mail:

Tuesday, 1 February 2011

Increase Your Margins by Managing Your Costs

In today's economic climate with budgets being cut across the board, the UK economy contracting in the last Quarter of 2010 and inflation rising, both Public and Private sectors are looking to maintain their financial stability. A decision to increase prices is a sensitive issue and could prove to be unpopular with customers. It is a gamble that all organisations face. Cutting costs could be a way forward. However, one must be careful how far and how deep those cuts go, as inevitably such cuts may cost an organisation a lot dearer than leaving things as they are.