In 2021, Go Proposal, the company that Woodville Accountancy uses use to produce its proposals was sold to a FTSE100 company (Sage) for £13.3m. Considering the company has only been trading for just under 5 years, this is a great achievement.
When they sold their business, they recorded an interview about what it was like going through the process of being investigated by not one, but two top four accounting firms.
You can see the interview here.
Selling your business may be something that is far into the future, or maybe just around the corner. Either way, it’s a great idea to start thinking and planning for a sale. It will mean that if/when an opportunity does come along, you’ll have already put in the groundwork and built a more attractive business to potential buyers.
To help you on your way, we have summarised some of the key points from the GoProposal interview.
Have the option to sell as soon as possible.
We all have different ideal retirement timelines, most of them set around ideal circumstances. But what happens when something changes meaning you need to look at your options sooner than you thought you would. Or an amazing offer comes along, but you’re not ready.
By doing the right things now and being ready to sell at any point, you put yourself in a much stronger position than you otherwise would be.
Plan in advanced of where you want to get to – and tracking progress against it.
What is ideal growth? What are the KPI’s / measures which are important to you and your competitors? Do you have an up to date forecast and way to measure your progress against it?
Getting clarity on these answers will help your business to grow and be ready if you come to sell your business.
What’s your ideal structure?
The founder of Go Proposal said that for the 8 months prior to the sale he played no operational part in the business. He said it was the hardest thing he’s ever done, answering hundreds of questions about his business. He said he couldn’t have done this without the structure in place which enabled the company to carry on growing whilst he was focused on selling the business and securing his teams future.
Records of board meetings
One of the questions asked in the due diligence was around a particular metric dropping between two months about 3.5 years ago. The founders said that whilst they couldn’t answer the question in the meeting, they could go back to their notes and go back to them. This is why it’s important to keep good records.
This is probably the most important part of the deal, what are you going to do next? I know we talk about lying on a beach etc, but you’ll soon get bored. You want / need the next challenge.
Selling at the bottom of the hockey stick
It’s a common idea to sell at the top isn’t it? We all want to do that, get maximum value etc. But if you can sell at the bottom of the hockey stick with room for growth above, you are giving your buyers another reason to buy. Plus, as the founders talk about in the video, that whilst they were a decent small company, they were struggling to get into the bigger accountancy firms because they were too small. Now with a huge owner, they’ll be getting walked into the bigger businesses they wanted to target. Plus, they have the finances to grow quicker.
Whilst a number of these may never apply to your business, we can all learn something from the process they have gone through.
It’s about making sure you’re as ready to sell as you can be as soon as possible. It doesn’t mean you have to or will do. But it will mean you have a well-run business, measuring the right things which are (hopefully) tracking an upward curve.
As always, please feel free to get in touch if you have any questions or want any help.