Beer Mergers
Business Sales : Mergers & Acquisitions : Corporate Consultancy

Beer Mergers Limited is an independent, specialist corporate advisory firm, a "boutique" operation focusing specifically on sales and acquisitions in the small business sector.

Welcome to Beer Mergers

URBAN DESIGN LANDSCAPE AND ARCHITECTURAL BUSINESS Ref: 2002

Very long-established business with a strong market position and reputation. Core business is master-planning, urban design, landscape and development planning. The business works on high quality residential and commercial projects for a range of prestigious clients. Highly qualified and experienced team of professionals in place. Currently based in the South East. T/O circa £650k, EBITDA comfortably in excess of £100k.
Contact: Lucy Roy - Tel: 01959 565191 Email: mjh@beermerger.com

NICHE ENGINEERING CONSULTANCY Ref: 2021

Well established business with a strong market position and reputation. A niche business focusing mainly on structural engineering and related services. Operates in both residential and commercial sectors, predominately in London and the South East. Based in the South East, but relocatable subject to usual considerations. Good known opportunities for growth. T/O exceeds £500k, EBITDA comfortably approaching £100k.
Contact: Lucy Roy - Tel: 01959 565191 Email: mjh@beermerger.com

NICHE BIO-LUBRICANTS SUPPLIER Ref: 2924

Very well-established business in operation for over 30 years. Trademarked brand - particularly relevant to current environmental agenda. Core business is the supply of biodegradable lubricants mainly used by UK Arborists, Foresters and Sawmillers. The business is currently fun remotely and is therefore easily relocatable. Because of the nature of the product and the sector, the business is believed to have very considerable growth potential. T/O is circa £100k.
Contact: Lucy Roy - Tel: 01959 565191 Email: mjh@beermerger.com

SPECIALIST HOME IMPROVEMENT BUSINESS Ref: 2005

Very well-established business, in operation for over 40 years. Core business is the supply and installation of quality windows, doors, conservatories & orangeries. Highly experienced, skilled and FENSA qualified team in place. Well located in the South East in excellent premises. T/O approaching £800k.
Contact: Lucy Roy - Tel: 01959 565191 Email: mjh@beermerger.com

SPECIALIST COATINGS BUSINESS Ref: 2007

Retirement sale of well-established successful and profitable coatings supplier. The core business is the supply of high quality varnishes and lacquers. The business serves commercial customers across a wide range of sectors. The business also has exclusive distribution rights for the UK for a specialist range of coatings products. Currently based in Southern England. T/O comfortably exceeds £900k, gross profit comfortably exceeds £250k.
Contact: Lucy Roy - Tel: 01959 565191 Email: mjh@beermerger.com

Entrepreneurs Relief

Posted on by Mike Halls

Capital Gains Tax (CGT) is a tax levied on the disposal of all assets, including the sale of a business. The tax is payable on the actual gain made from the sale, not the actual sale amount. Entrepreneurs’ relief is a tax relief on CGT that lets you sell all or part of your business and pay only 10 per cent capitals gains tax (CGT) on the profits you’ve made, as opposed to the normal rate of 20%.  

Not unexpectedly, in the very recent Spring Budget there were major changes to Entrepreneurs Relief on Capital Gains charged on the sale of a business.

Principally, the lifetime limit previously set at £10m per entrepreneur, was cut significantly to £1m.

The new lower limit applies to all gains during a persons lifetime, and once the £1m threshold is breached, higher rate taxpayers will pay 20% CGT on any further gains over that limit.

This also took immediate effect as from 11th March, meaning that any sales not completed by that date will now benefit only from the reduced relief.

We could argue for ever on whether this change is right or wrong, but the impetus was mainly for the government to save very significant amounts of tax relief to assist with their spending plans.

The previous relief has also been criticised for several years for disproportionately rewarding a small number of people, and the cut is designed to rebalance that, whilst continuing to offer an incentive for new entrepreneurs and small businesses. 

Otherwise, the tax remains largely unchanged, the principal qualifications being as follows.

Both of the following must apply for at least 2 years up to the date you sell your business:

  • you’re a sole trader or business partner
  • you’ve owned the business for at least 2 years.

Both of the following must also apply for at least 2 years up to the date you sell:

  • you’re an employee or office holder of the company (or one in the same group)
  • the company’s main activities are in trading (not non-trading) – or it’s the holding company of a trading group.

Additionally, for at least 2 years before you sell your shares, the business must be a ‘personal company’, meaning that you have at least 5% of both:

  • the shares
  • voting rights

You must also be entitled to at least 5% of either:

  • profits that are available for distribution and assets on winding up the company
  • disposal proceeds if the company is sold

Finally, the business must be a going concern, in other words commercially trading and viable.

There are many other rules governing Entrepreneurs Relief, some of which are complex depending on individual circumstances, so it is as always essential to seek specialist tax advice as part of planning your sale.

COMMERCIAL VEHICLE WORKSHOP BUSINESS Ref: 2922

A very successful and profitable vehicle maintenance and repair business. Core services include a full "one-stop-shop" fleet management service. The business services principally commercial customers including a number of high-profile fleet customers, but also serves private customers. The business operates from substantial leased premises, well located in the South of England. There are good known opportunities for growth. Turnover comfortably exceeds £3m, with adjusted EBDITA circa £300k.
Contact: Lucy Roy - Tel: 01959 565191 Email: mjh@beermerger.com

SPECIALIST LABORATORY Ref: 2006

Long-established privately-owned laboratory in operation for over 25 years. Core business is Microbiological and Chemical Analysis of Water, Trade Effluent and Air Monitoring. Services include testing for Legionella and BSRIA analysis. Very well located in excellent purpose built, UKAS accredited and recently expanded premises in the South East, close to London with good transport links. Long-established customer base across a variety of sectors, with high repeat business, many with very long-term relationships. T/O comfortably exceeds £900k with average 50% gross margin.
Contact: Lucy Roy - Tel: 01959 565191 Email: mjh@beermerger.com

EXTERNAL SCREENS SUPPLIER Ref: 2015

Well established family business, trading in excess of 17 years. Core business is the supply of glass and metal screens, mainly external, with a wide range of uses. More recently they supply a range of internal glass screes, specifically Hygiene Screens for Social Distancing. Exclusive distributorship with an international manufacturer. Operates in both residential and commercial sectors within the UK. Currently based in the South East but easily relocatable. Can be operated from small premises, as goods go direct from the factory to the client. T/O comfortably in excess of £150k pa, with commensurate EBITDA.
Contact: Lucy Roy - Tel: 01959 565191 Email: mjh@beermerger.com

NICHE HEATING EQUIPMENT SUPPLIER Ref: 2014

Well established family business, comprised of two companies, trading in excess of 19 years. Core business is the supply of Infrared heaters, controls and related products to industry and residential markets. A separate sister company offers a range of solariums and heaters for the Equine and Zoological sectors. Exclusive distributorship with an international manufacturer. Operates in both residential and commercial sectors, mainly UK market but also worldwide. Currently based in the South East but easily relocatable. Joint T/O comfortably exceeds £300 pa, with commensurate EBITDA.
Contact: Lucy Roy - Tel: 01959 565191 Email: mjh@beermerger.com

STRUCTURAL ENGINEERING BUSINESS Ref: 2920

Long standing and successful business based in the South East of England with a very strong reputation built over many years. Core activities include structural alterations and repairs, basement creation, specialist foundations. Main focus is on commercial and residential properties mainly in the Greater London and the Home Counties, but the company has the capability to work further afield. Very experienced, skilled and loyal workforce. Substantial level of repeat business and excellent further growth opportunities. Genuine retirement sale, one of the two owners will continue working during a transition period. Turnover comfortably c £1.5 with commensurate profitability.
Contact: Mike Halls - Tel: 01959 595191 Email: mjh@beermerger.com

ANALYTICAL INSTRUMENT SUPPLIER Ref: 2013

Core business is the supply of specialist process equipment for gas and moisture analysis. Additional significant services include the supply of spares plus servicing and commissioning. Serves a wide range of sectors including Offshore and Onshore Gas Plants and Power Generation. Well established business, good market position and reputation, and operationally simply run. Well located in the South East, and easily relocatable. T/O comfortably in excess of £500k.
Contact: Lucy Roy - Tel: 01959 565191 Email: mjh@beermerger.com

HEALTH AND BEAUTY SPA Ref: 2902

A well-established private business, which has been successfully trading (10 years +) with sales growth year on year. This luxury, boutique spa has a highly trained and long serving team. They provide high quality spa days and a wide variety of holistic and beauty treatments. Their premises includes multiple treatment rooms, a large heat facility comprising of steam room, sauna, Jacuzzi and a separate relax suite. There is a very strong, loyal client base with a high proportion of repeat business; 541 appointments per month (on average); 200 new client visits each month (on average); 10,000 paying clients on the company's database. The business is based in leasehold premises in a unique property, in a very popular area of West Yorkshire. There is easy access from the whole of the West Riding conurbation. This is a genuine retirement sale, but the Owner will be willing to remain for a suitable transition period to ensure a smooth handover. Turnover forecast to exceed £200k, with EBITDA forecast to reach in excess of £50k within the next 12 months. There is definite known growth potential.
Contact: Andrew Wilson - Tel: 07815 735544 Email: a.wilson@beermerger.co.uk

AIRCRAFT PARTS DESIGN, PRODUCTION AND MAINTENANCE SERVICES Ref: 2926

Retirement sale of an exciting niche business providing design approval, parts production and maintenance and consultancy services to aircraft owners, MRO's and operators around the world. Based in the UK with a facility in Asia, the Company holds Design Approval EASA Part-21.J, Production Approval EASA Part-21.G and maintenance Approval EASA Part-145. Core product areas: interiors, structural modifications, avionics, seat dress covers, curtains, wire harnesses, soft furnishings, carpets, labels, metal brackets and interior trim items. Strong customer base with roughly 75% repeat business and a highly experienced team, 40 full time employees. YE January 2020 Est: Turnover £1.4m, GP 50% and Adjusted EBIT £327k.
Contact: Miki Dan - Tel: 07941 332170 Email: m.dan@beermerger.co.uk

Selling a Privately Owned Business – Briefing 19 – Selling to a Trade Buyer

Posted on by Mike Halls

In this final blog in our current series about different types of buyer, we look at “Trade” buyers, which essentially means any other trading business.

Trade buyers are often referred to as “Strategic” buyers, because they are seeking growth by acquisition, with businesses that have synergies with their existing operations.

Often a trade sale is the obvious choice where there is no family or management succession.

Trade buyers are the most common buyers for smaller privately – owned businesses and often are the best buyers for a number of reasons:

  • A trade sale is often a natural development in the life of a business, particularly for owner managed businesses, founded and developed in an entrepreneurial way by you as owner, and at the right point to move to the next stage of more formal corporate ownership.
  • An understanding of your market and your type of business is essential for a successful merger, and Trade buyers will have a deeper understanding of the business which assists in unlocking full value.
  • Usually there is a clear synergy between a buyer’s own operations and your business, leading to greater potential future growth and thus value. 
  • Generally with a trade sale, you as seller are able to exit your business taking at least the majority of the value on sale, giving greater certainty and ability to plan your future.

You will rightly be proud of your business and will have some kind of feel for what it’s worth to you, but that’s not the same as its worth to the market.  Ultimately your objective is to achieve full value, not just any value on sale, and in this planning is essential.

To achieve the best value you will need to look at the business from outside, as it were, and clinically assess its strengths and weaknesses, and to be able to anticipate what external buyers may feel about it.

Typically, a trade buyer will be planning a “vertical” expansion, for example into a different part of the whole supply / service chain, or a “horizontal” expansion, for example, into new geographic markets or product lines. The trade buyer is often willing to pay for readily realisable synergies, and will often also pay for speculative synergies. 

In summary, a trade buyer is more likely to evaluate your company on a holistic basis, and  therefore also more likely to pay a premium for it. They will get more benefit from owning your business than what it will cost; it will add additional subjective and objective value to their existing operations. 

Experience shows the best way to achieve a successful exit at full value, and particularly to evaluate the market and possible strategic buyers, is to assemble a strong team of advisors with the right experience to advise and guide you through the whole process.

Selling a Privately Owned Business – Briefing 18 – Selling to a Financial Buyer

Posted on by Mike Halls

In this next in our current series of blogs about different types of buyer, we look at “financial buyers”, which in the small business market generally means Private Equity firms, or potentially Individual Investors.

Private Equity is essentially capital that is not noted on a public exchange, and is usually comprised of funds and investors that directly invest in private companies for a variety of investment objectives, principally to facilitate growth and value.  Private Equity firms generally buy 100% or almost always the majority stake in a business thus remaining in full control of the business.

Set out below are some key points relevant to you in considering selling to a Private Equity buyer.

  • Private Equity firms need to deliver capital gain to their investors, and look for healthy returns as a reward for the (theoretical) higher risk in their transactions.
  • The return on the Private Equity investment is measured through an internal rate of return (IRR) which would generally be around or in excess of some 30% on the capital invested.
  • Generally speaking, a Private Equity investment is a shorter-term timescale rather than a longer-term and typically this would be around 3 – 5 years before subsequent exit.  However, some firms do specialise in longer-term investments.
  • For a successful Private Equity sale, the business must have a strong credible growth story and future plans must be robust and substantiable.
  • An absolutely key element is building a strong management team which can demonstrate the ability (and real desire) to take the business forward.  Fundamentally, the Private Equity buyer is backing the management team, more so even than the business itself. A good business and growth potential will not succeed with weak management, whereas good management can turn around a weak business.
  • It is also necessary to properly demonstrate that the business can continue and genuinely progress without you as the outgoing owner.

When selling to a Private Equity buyer, more than for other circumstances a strong, clear business plan must be in place, demonstrating the business’ key strengths, its differentiation from competition, a known or clearly identified pipeline of potential new business and how future growth can be achieved.

  • A sale to Private Equity will require a close partnership between the ongoing management and the Private Equity firm for the duration of the investment, and a clear exit path will need to be identified right from the outset, with a clear plan for achieving that exit agreed and in place.

As can be seen from the above points, Private Equity buyers are somewhat specialist and not every business will be suitable.  Hard work, dedication and a clear business strategy will all be required to achieve the growth and return required for Private Equity investors, but the rewards can equally be substantial.  Specialist professional help from the outset will assist greatly in achieving a successful Private Equity sale.

Selling a Privately Owned Business – Briefing 17 – Selling to an Unsolicited Buyer

Posted on by Mike Halls

In this last series of blogs we’re looking at selling to different types of buyer. In this second blog, we look at “unsolicited” approaches.

These essentially are any external expression of interest, or indeed an actual offer received unexpectedly. Here are some thoughts on how to deal with them.

  • By their very nature you won’t have been expecting the approach, and may well not know the interested party, so dealing with it may feel both strange and indeed unwelcome – but it shouldn’t necessarily be.  It does mean that you have been doing sufficiently well so that someone has noticed and is interested in your business.
  • You need to look at this in a logical and methodical manner. Firstly, you need to think carefully and clinically about whether your business may indeed be for sale.
  • If the timing just isn’t right and you are simply not for sale, then clearly you turn the approach away, but in a positive manner, you never know when the time might be right and you may wish to resume discussions.
  • If you weren’t thinking of selling, but the time may well be right both for you and the business, then clearly you can progress matters, bearing in mind the key points below.
  • However, it’s unwise to progress any kind of discussions with an unsolicited approach if you really don’t wish to sell, or if you’re only looking for that irresistible Offer, as with an unsolicited approach this rarely happens.  Doing so will take up significant time and effort with a very low likelihood of a successful outcome.

If however your careful consideration confirms that you would countenance a sale, then you must proceed carefully and methodically.  Here are some key points to bear in mind:

  • Whilst you should remain positive, experience shows that the odds of closing a deal from an unsolicited approach are generally pretty slim, partly because that kind of approach is opportunistic rather than strategic.
  • So the first thing is to determine how much you know about the potential buyer, not only their actual ability to complete an acquisition but the kind of business they are, how the businesses might fit together in future and other practical aspects.
  • You always need to be careful that this isn’t simply a “fishing expedition” and that you are not just one of a number of businesses which are similarly contacted in the hope of one achieving a quick and cheap deal for the buyer.
  • You must certainly be extremely careful about confidentiality, one of the first things to do is to get a full non-disclosure agreement (NDA) before you part with any meaningful information.
  • A further key issue is the question of value.  It is axiomatic that offers from unsolicited buyers reflect their own agenda, and not the market worth of your business.  The nest key step for you is to determine what your business is worth to you, both in terms of ongoing future income and also on sale.
  • It may well be that the approach is genuine and worthwhile, but nevertheless, proceed with caution. The key issue remains to achieve the proper value for your business and not a value based on the unsolicited buyer’s views.  Some form of even limited marketing to establish at least in some measure the market value of the business is really essential.
  • At this point, normal professional advice is always to seek specialist help to determine potential market value, not least so that you can then enter negotiations with the unsolicited buyer from a position of strength. You will clearly have been sufficiently successful as business owner to have reached a point where a potential buyer is interested in you, but when it comes to a sale, basically you don’t know what you don’t know! 
  • As negotiations progress you need to be clear about what the buyer wants from the business, and in particular from you as owner.  For example, one key issue for most entrepreneurial owners is the concept of working for somebody else, after so many years of working for yourself.
  • Finally, don’t do anything or divulge material or detailed information until you have a formal written Offer and a signed confidentiality agreement.  You, not the buyer, must control the process, and remember that it’s easier to walk away early than allow things to progress until it’s too late.

As always, assembling an experienced team to assist with serious negotiations is massively helpful to achieving a successful outcome.

Selling a Privately Owned Business – Briefing 16 – Selling to a Management Team

Posted on by Mike Halls

Our recent serios of blogs have taken us through the key elements of the sale process, this last few blogs look at different types of buyer.

One of the first options open to many small business owners is to sell to the management team, though a “management buy – out” or “MBO”. This can often have a strong emotional pull, as well as potentially seeing an easier option than a full market sale. But it’s surprising how many MBO’s fail through not getting the basics in place right from the start.  Here are ten key points to consider:

  1. Will you consider an MBO?
    Maybe a most obvious question, but approaching this wrongly may give the management team cause for concern, and even raise problems if for whatever reason the answer is “no”.
  2. Do the Management have the Right Team?

    A properly balanced team is critical to success; management must be able to demonstrate a good blend of strategic and practical skills, financial sales and operational expertise, and above all leadership.

  3. What is for Sale?
    You need to be absolutely clear on this. Is it the whole business as they know it? And how much do they actually know about it, and importantly, will they be able to trade successfully independently after a buy-out?
  4. How to Negotiate the Best Deal.
    There is no prescriptive answer, individual circumstances can vary considerably. The team should have a strong leader and a clear strategy for discussions. Always remember that the deal must work both for you and the MBO team.
  5. What Problems are Likely to Arise?
    As Managers the MBO team should know the business well, and should be able to judge which issues are likely to prove contentious. Preparation is critical, as is anticipating the team’s position.
  6. What is the MBO Team’s Likely Strategy?
    You may well be favourably disposed to an MBO, but you should also be considering alternatives such as a trade sale.  It may be that price is your key consideration, but this is not always the case, other elements can also tip the balance in an MBO team’s favour, as long as the gap in price is not too wide.
  7. What is the Right Funding Structure?
    One of the key issues is often that the MBO team are not well funded, and so a buy – out is often a leveraged deal, so the business must be able to support the MBO to the degree required, but without placing new or undue financial strain on it. The MBO funding will almost certainly be a blend of basic lending, definitely some investment by the team itself, and possibly external investment/equity funding.
  8. What Happens Once the Deal is Agreed?
    Just as with any buyer, the MBO team must carry out proper due diligence, albeit that their knowledge of the business will assist in focusing on key aspects. External assistance with that diligence is vital, as a clinical and impartial assessment of the business is vital, so that desire and emotion do not cloud judgement.
  9. How will the Sale be Completed?
    A full Sale and Purchase Agreement will be required, as with any deal and properly compiled by good lawyers, to ensure that the team’s future position is protected and that no unforeseen circumstances can arise to adversely affect the deal that’s been agreed.
  10. How do you Exit the Business?
    This is not the strange question it may appear. The MBO team’s plans for the business will be crucial to both investors and funders, and to taking the business forward successfully. A full business plan should have been prepared showing how the MBO team will drive the business and at what stage, broadly, your exit is realistic and envisaged.

As can be seen from the above points, various advisors are required at all stages, and perhaps none more so right from the start, as external, impartial experience and perspective will help guide you and the MBO team through the whole process.

Selling a Privately Owned Business – Briefing 15 – Legal Completion

Posted on by Mike Halls

So, the deal has been agreed, the Heads of Terms has been signed and due diligence is underway.  You’re in the completion phase of the sale!

Your solicitors will now be drafting the legal documentation which governs the sale, the fundamental document being the legally binding Sale & Purchase Agreement (SPA).

Here are ten pointers to assist in guiding you through the completion phase of your sale.

  1. The SPA fully defines the structure and terms of the deal.  The main purpose of this document is to protect each party against unforeseen events occurring after sale completion, and to define the consequences of any such occurrences.
  2. The SPA will be driven mainly by the buyer, who is taking the risk in purchasing the business.  The buyer will include in the SPA clauses referred to as warranties, which are declarations of fact given by you as seller about the business. The SPA defines the protection given to the buyer if any such warranty is subsequently breached by being found to be incorrect or untrue.  Warranties are always the most heavily negotiated aspects of the SPA.
  3. The SPA will also include indemnity clauses. These provide guaranteed protection for the buyer against a specific liability.  Typically indemnities involve a payment by the seller to the buyer to compensate for losses caused by breaches in an agreed provision.  Generally any payments under an indemnity clause will be made on a “£ for £” basis.
  4. A key aspect of the legal completion process is “disclosure”.  This is a process whereby you as seller make known to the buyer any appropriate matters about the business, which, being declared during due diligence, are then excluded from the warranties.  These disclosures are usually collated into a formal “disclosure letter” supported by appropriate documents.  One effect of disclosure is that you as seller are able to discuss any matters arising directly with the buyer, which you can then address together as appropriate before completion.
  5. Other key clauses in the SPA are known as “exclusion provisions”.  These collectively outline the basis on which you, as seller, will transfer the business to the buyer.  These will include how the consideration for the business will be paid, including any deferred consideration, earn outs and the basis on which price adjustments may take place.
  6. Finally, there are other types of clause, referred to as “covenants”.  Covenants regulate the actions of both buyer and seller, including agreements to take (or not to take) certain actions.  Covenants also form the basis for closing conditions and termination provisions.
  7. The SPA is not only about the buyer. It will also give you, as seller, protection against future unreasonable claims by the buyer.  It is essential that these clauses are drafted carefully, as effectively when you sell, you will be “swapping” the limited liability of your company for personal liability under the SPA.
  8. There will also be another document, concurrent with (or sometimes an addendum to) the SPA, which is the Tax Deed.  When acquiring a company, the buyer will inherit the tax liabilities of that company. The tax deed protects the buyer, as you as seller effectively promise to pay the buyer an amount equal to any pre-completion tax liabilities. One purpose of the Tax Deed is to allow the buyer to recover any such tax liabilities without having to prove fault.
  9. Depending on the size and complexity of the sale, there may be other documents running alongside the SPA.  For example, in almost all cases there will be a Service Contract, which is a formal contract defining the basis on which you as seller will work with the buyer during a handover period during post sale.
  10. When the completion phase is coming to an end, and the SPA and attendant documents have been prepared and agreed, a date will be set for formal completion.  This may involve an actual meeting between all parties, or increasingly commonly now, this is done remotely, with each party attending at their respective solicitor’s offices, with completion taking place electronically.  Either way there will be a number of ancillary but important practical documents to sign, for example director’s resignations, the actual share transfer forms, and board minutes.

This final completion phase is vitally important to you as seller, and you should always be advised by specialist M&A solicitors.  However amicable the deal with the buyer may be, your interests should always be fully and properly protected in the event that something unforeseen goes wrong at some point after sale. A weak SPA can cause significant problems at any future date should things not go as expected. Expect the unexpected!

Selling a Privately Owned Business – Briefing 14 – Due Diligence

Posted on by Mike Halls

When you’ve agreed a deal with your preferred buyer, this will probably be enshrined in a Heads of Terms (see previous briefing) which will trigger a period of “exclusivity” for that buyer, and the start of what is called “due diligence”.

Due Diligence is, in essence, an investigation of your business by the buyer to ensure that the assumptions underlying their offer for the business are correct. This should not be of concern, buyers will quite properly use due diligence as a checking mechanism for the acquisition. However, it’s important that you as vendor are properly organised for this process. 

Set out below are ten key points to help you navigate through the due diligence process.

  1. There is no need to fear the due diligence process. Provided all information has been fully and accurately supplied, and no unexpected changes in business circumstances arise, then the diligence process should be routine.
  2. From a practical viewpoint, the business must always come first, and as vendor you should avoid an (understandable) preoccupation with the deal, or becoming deflected from the normal running of the business, which may itself lead to problems. You may therefore wish to consider increasing your own support to deal with the extra demands of due diligence so that you continue to focus fully on the business right until the end.
  3. The main parts of due diligence are financial, legal and commercial.  Other specialist types of due diligence can, for example, be environmental diligence, property diligence, and other specialist reviews of areas such as Intellectual Property and Pensions.
  4. Financial due diligence involves a detailed examination of the financial affairs of the business, with particular focus on historic, current and projected performance. The buyer will test the assumptions behind the trading and profit projections, as those will have formed the main basis for his offer.
  5. Legal due diligence is undertaken by the buyer’s solicitors, and will focus on key contracts and other legal documentation.  Issues such as ownership of assets, exposure to litigation, contingent liabilities and intellectual property rights will also be reviewed.
  6. Commercial due diligence effectively encompasses all other investigation by the buyer, generally undertaken by the buyer themselves in collaboration with you as vendor.  In simple terms this is “getting under the skin” of the business and understanding the key factors which “make it tick”.
  7. Often an important part of that commercial diligence is customer diligence, where purchasers may often wish to contact (at least) the company’s major customers to judge relationships and customer satisfaction.  Clearly there are considerable commercial sensitivities in this, and in many cases this may not be appropriate, in which case other ways of achieving that feedback must be found.
  8. Another important element of commercial due diligence is management and employee diligence, where the buyer will wish to meet with key members of the management and support team, assessing the practical and cultural fit post acquisition.
  9. Your lawyers will guide you through the practicalities, but one important thing is for you to be well organised throughout the whole diligence process, and to keep full records of all information that has been handed over or discussed, as that will be part of the legal completion process.
  10. Due Diligence may often throw up queries and observations which will require further discussion between you and the buyer, which may genuinely not have been known before Heads of Terms were agreed. This should not be seen as attempts to “chisel down” the price, but part of the normal process and these can almost always be addressed through proper co-operation and discussion.

Once the due diligence process has been completed and all issues have been dealt with, the lawyers can progress with the finalisation of the sale contracts and the final phase of the completion process and the legal Sale & Purchase Agreement.  This is covered in our forthcoming briefing.

Selling a Privately Owned Business – Briefing 13 – Heads of Agreement

Posted on by Mike Halls

Once you’ve successfully negotiated a deal with your preferred buyer, that final offer is usually confirmed in a “Heads of Agreement” document (sometimes also referred to as a “Heads of Terms”).

Here are ten key points to consider in relation to the Heads of Agreement:

1. The Heads is essentially a “layman’s” document, which has one overriding objective, which is to fully and accurately outline the deal that has been agreed, so that there are no misunderstandings. Both you as vendor and the buyer will sign to confirm agreement.

2. As it isn’t a legal document (though some clauses may be legally binding) it’s not usually necessary for lawyers to be involved, as their main focus will be on the subsequent legal contract for sale, the “Sale and Purchase Agreement”. Nevertheless the Heads is an important document which should be carefully prepared.

3. A key issue for you as vendor at this point is to ensure the completion timetable doesn’t slip, and this should be made clear in the Heads. At this stage your negotiating position is at its strongest as you will usually still have other interested parties, and even competing offers for your business, but these will inevitably begin to dissipate as time progresses.

4. Clearly the Heads must include all the essential elements of the offer that has been agreed. No material issues should be left for subsequent discussion, as this creates uncertainty and potential for subsequent renegotiation. All key aspects, and in particular arrangements for and timing of all payments should be clearly and unambiguously defined, if possible with specific dates rather than general references to future events.

5. On signing the Heads you as vendor will give a period of “exclusivity” to the buyer, during which both parties agree to commit exclusively to the deal and not to continue negotiations with anyone else. The length of the exclusivity period will vary depending on individual circumstances, but it should be as short as possible. Generally in the small business market, a period of six to eight weeks should be sufficient.

6. Controlling the timescale at this stage is also vital because the longer the transaction goes on, the greater the potential for unexpected external, or even internal circumstances to occur, which will be outside your control as vendor, and which may damage the agreed deal.

7. From the Heads stage onwards, material costs will start to be incurred by both parties, and it is therefore important that a detailed completion timetable is agreed, and set out clearly in the Heads.

8. As vendor it is desirable to include a clause in the Heads that if the buyer fails to meet key deadlines in that timetable, their exclusivity will lapse. If the buyer attempts to renegotiate a key element of the transaction, then exclusivity should also lapse as a matter of course, and this should be stated as a specific term in the Heads.

9. Always remember that once Heads are signed, the deal is not yet done. The period between Heads and ultimate completion can be one of the most difficult in the sale process. A whole new group of advisors become involved on both sides, some of whom will not have been party to original negotiations, with the resultant potential for delay.

10. Finally, as vendor it is also important that particularly during this crucial time you and your management team do not “take your eye off the ball” at the business because of involvement in the sale process.

During the period of exclusivity the buyer will need to undertake their “due diligence”. This in essence is an investigation of the business by the buyer to ensure that the assumptions underlying their offer are correct. This topic is covered in our next briefing.

Selling a Privately Owned Business – Briefing 12 – Negotiations and Offers

Posted on by Mike Halls

As your sale proceeds, your contact with buyers will progress from exploratory discussions, through serious interest to negotiating a deal and agreeing an offer.

Each potential buyer will have differing circumstances, will take differing views on, and will make individual offers for your business.

When assessing any offer its crucial to determine the true value of each element of the offer, making adequate allowance for risk.  This process will gradually whittle down offers to the one which ultimately meets your prime objectives as vendor.

Whilst important, price is not your only concern.  Other terms of an offer, such as the structure, your ongoing involvement, and other elements will also be important in ultimately choosing the best offer for you.

Here are ten tips about discussing a sale with buyers and negotiating offers for your business.

  1. It’s vital for you as vendor to understand each buyer’s perspective and what they are seeking to achieve from the deal.  Acquisitions are often driven by emotional as well as strategic or financial reasons, and understanding these is key to negotiating the best deal.
  2. The manner in which you discuss any points with buyers is also important to progressing serious interest.  You need to be open, but firm, and be prepared for key questions so that you present your business positively. Experience shows that buyers are often driven by the “feel” of a deal as well as factual matters.  
  3. Ultimately what’s important to each buyer are the benefits they will derive from acquiring your business, so it is important to identify these when discussing with buyers.  Operational and financial benefits from cost savings or revenue enhancements can be factored into the value of a business.  Buyers will generally insist that future synergies are their reward for the risk in acquiring, but in a competitive situation buyers may need to share a proportion of that future value to secure the deal.
  4. Frequent and open communication between you and all buyers is always important, and efficiency in providing information to potential buyers is also crucial, and generates a good feel for the buyer.
  5. Once a deal is on the table, it should be progressed as quickly as possible and proactively to agreement.  Lengthy negotiation periods and endless too-ing and froo-ing are unhelpful in concluding successfully.
  6. For you as vendor, deliverability of an offer is of paramount importance.  By this stage you and your advisors will have thoroughly vetted each buyer and should have received confirmation of their financial ability to complete.  Undue reliance on funding for the acquisition can be a key factor in selecting the eventual buyer.
  7. Negotiating is about “give and take”.  Be willing to make concessions but always try to barter these for something in return.  Don’t give them away cheaply, and try to trade small concessions rather than one large one.
  8. There will always be differences in price expectations and value.  These are not necessarily terminal and can often be bridged in a number of ways, often through deal structure.  The structure of a deal is limited only by your flexibility as vendor, and the more you can exercise the greater the chance of success.
  9. The ability to listen properly and assess what a buyer is saying is crucial to good negotiating, as is observing body language.  This is precisely where working with an advisor can be important, not least because two pairs of ears are better than one.  Focusing on hearing exactly what the buyer is saying, what this actually means and what really lies behind the discussion is crucial. 
  10. In summary, be prepared, be professional, be positive and engender a really good feel about your business.  Always consider the other side’s viewpoint but never lose sight of your original objectives.

When you have successfully negotiated to an acceptable deal with that right buyer, to ensure full clarity and no misunderstandings, that agreement should immediately be confirmed in writing, usually in a Heads of Agreement (Heads of Terms).  This next stage will be covered in a following Blog.

Selling a Privately Owned Business – Briefing 11 – Finding a Buyer

Posted on by Mike Halls

Any business can be sold in some way or other in the market, even if it is underperforming or deemed unattractive.

The key objective is always to maximise the value on sale and achieve the best price, and so finding the right buyer – not just any buyer – is critical to achieving this.

Set out below therefore are ten helpful tips to finding the right buyer for your business.

  1. Your personal objectives will help determine who might be the best buyer. Those objectives will usually be a balance between financial issues, such as achieving a particular price and human factors, for example securing the future of the business.
  2. The ideal buyer will normally be a combination of one who will pay a good price, who will add value to the business and to the management and employees.
  3. The shape and structure of a deal will also influence your choice of buyer.  You will want a fair balance between cash on completion of the sale, any deferred consideration and potential additional performance-based payments.
  4. In the small business market there are basically four types of buyer: internal buyers; individual / entrepreneurs; trade buyers; and financial buyers.
  5. Internal buyers usually comprise some form of management buyout (MBO), with or without additional external management (MBI) or a combination of the two (BIMBO).  This can be attractive to you as vendor, in particular dealing with known parties and the relative simplicity of the process. Those advantages can often however be outweighed by difficulties in funding.
  6. Individual buyers will mainly be entrepreneurs, or possibly investors, seeking a suitable business opportunity to satisfy their own objectives.  These buyers will often conclude a deal because of a sheer empathy with the business, and a chemistry with you, which can often transcend practical issues.  However, individual buyers bring no business synergies to a deal and thus the value to them, and their ability to fund the purchase, can be lower than other types of buyer.
  7. Trade buyers are the most common and often the most favoured buyers, because trade acquisitions are normally a strategic purchase.  Serious trade buyers will see additional future value from the business fit and future synergies, which will enable them to justify a higher price based upon genuine merger value.
  8. Financial buyers are generally some form of venture capital or private equity house; often seeking to build a portfolio of related businesses.  Once again there is often good future value through the melding together of these businesses, although this can be offset by most financial buyers desire to capture any business at the lowest possible entry price, as this will determine the eventual capital return on their investment.
  9. Small business owners often consider known parties, such as competitors, suppliers or past unsolicited approaches as a route to a quick and easy sale.  However, whilst these may sometimes prove worthwhile, generally they should be regarded as “buyers of the last resort”.  The main danger is in maintaining confidentiality and the potential damage to the business in providing commercially sensitive information directly to the outside world.  Furthermore, experience shows that for every known buyer there are numerous others just as good if not better.  Finally, known buyers rarely pay the best price, since the value to them is dictated by their own circumstances and not by market value.
  10. The secret to a successful sale is always to undertake the most comprehensive marketing of the business, in a controlled and confidential way, creating competing interest to achieve maximum value.

Finding the “right” buyer to achieve the best possible price is so important, that in almost every case it is essential for a small business owner to find some form of external specialist help – and assuming you are using an advisor, they will carry out this key task for you.   

Selling a Privately Owned Business – Briefing 10 – Sale Documentation

Posted on by Mike Halls

So, you’ve carried out all your planning and preparation, you’ve chosen your advisors and are now ready to commence the sale.

One of the first requirements is to put together information about the business for potential buyers.  There will be a number of documents, but the key information will be set out in an “Information Memorandum”. 

Preparing and presenting that information is extremely important, here are ten pointers to help manage the process.

  1. Confidentiality is always paramount and this should be reflected in the documentation used to sell your business.
  2. For that reason you should have two separate documents, the first a brief non-confidential summary to provide to interested parties, followed by the full Prospectus or Memorandum.  The latter will be provided only to serious interested parties who have been fully vetted and who have signed a formal confidentiality undertaking.
  3. The Memorandum is a selling document, its prime purpose is to entice the buyer to meet and find out more about the business.  An acquisition is always a strategic purchase, and the best buyers will usually have a choice of possible targets.  Your Memorandum must raise the profile of your business to the top of their pile.
  4. The Memorandum must be comprehensive, but must give a buyer hard facts not rhetoric.  Hype, superlatives and pretentiousness must be avoided. Buyers will usually be experienced and will see through unsubstantiated rhetoric.  The Memorandum must focus on the key attributes about the business and potential benefits.
  5. However, the Memorandum must not be a turgid document over-stuffed with unnecessary information.  Information can be easily divided into key sections, such as strategic information, operational and financial information.
  6. Buyers buy solutions to their objectives.  The Memorandum must fully address strategic factors and clearly demonstrate how your business differentiates from the competition, and its “unique selling points”.
  7. Whilst providing the majority of the required information about the business, the Memorandum will never provide 100% of all required information.  Confidentiality and commercial sensitivity will dictate that certain information will be withheld until later in the process.  From a selling perspective it is also helpful to “keep some powder dry” for subsequent discussions.
  8. The Memorandum should also be a flexible document, tailored to individual circumstances.  It will not always be necessary to provide the same information to every buyer, and in some instances, particularly where a potential buyer is considered particularly good or attractive, specific information relevant to their individual circumstances should be added to the base document.
  9. Buyers can only make their decisions based on the information you as seller provide to them.  They will rely on that information, so it is important to keep full and accurate records of all information given to all interested parties.
  10. Finally, an Information Memorandum is not generally a prospectus in the legal sense, and thus it’s not normally necessary for lawyers to independently verify that  – and your adviser will deal with that aspect.  

Selling a Privately Owned Business – Briefing 9 – Choosing an Adviser

Posted on by Mike Halls

As a business owner you will almost certainly sell only once, and it’s unlikely that you will have direct knowledge or experience of the sale process.

Accordingly, its highly desirable to have some expert guidance and help, by choosing a specialist adviser, and equally important to choose the right advisor for you and your particular business.

But with little experience of advisors, how best to go about that? Here are some key questions that you can consider and discuss with possible advisors.

  • Does the firm have a good knowledge of your type of business and markets?
  • Is the firm a specialist advisor and not just a “business estate agent”?
  • Confidentiality is absolutely critical for us, how do they control this?
  • Will the firm provide you with a full service, including initial advice on the saleability of your business? 
  • Obviously value and the price you are likely to receive is a very important aspect, how does the firm assess this?
  • Do they have a good feel for the economy generally, are they able to advise you on what market conditions are like now and is it the right time to sell?
  • You may already have an idea about the kind of buyers that might be interested in your business, how will the firm find more and better buyers than you can do yourself?
  • Selling a business is entirely new to you; can you ensure in particular that you will get the necessary support throughout the process, specifically with negotiations?
  • Once a deal is agreed, it’s critical to appoint good legal advisors; can the firm help you to choose appropriate solicitors?
  • Finally, you need to be sure that you will be supported throughout every step of the sale, with a personal hands-on service, with your advisor available at all times.

As vendor you should always meet with and discuss your potential sale with more than one advisor and it should be easy for good advisors to provide positive answers to all the above points.  Furthermore, meeting with potential advisors will allow you to gauge the “chemistry” between you, which will be important as the sale process progresses, which can be quite stressful at times!

Selling a Privately Owned Business – Briefing 8 – Tax Considerations

Posted on by Mike Halls

Tax considerations are always an important part of the early planning for a sale of a business, and should be considered now before the real process of sale begins.

You should always plan early and take specialist tax advice alongside any other advice and support you as owner may be receiving. Tax regulations change regularly and it is only through dealing with Tax on a daily basis that one can be fully up to date with all developments.

The main tax consideration on a business sale is Entrepreneurs Relief, where a lower rate of Capital Gains Tax (CGT) can be payable. There are certain relevant pre – conditions, together with a number of permutations depending on individual circumstances, so some advance planning is critical to maximise the tax relief available.

Presently Entrepreneurs’ Relief remains at what is effectively its most advantageous rate since it was originally introduced. Entrepreneurs’ relief (ER) reduces the rate of capital gains tax (CGT) on disposals of certain business assets from 20% to 10%, if all conditions are met.

Entrepreneurs’ Relief is available to all shareholders, including husbands, wives or civil partners, up to the maximum amount available, provided that each satisfies the relevant conditions.

The lifetime limit on capital gains which qualify for relief doubled some while ago now to its present level of £10m.  This is a cumulative limit for each person for the duration of their lifetime, so is available over any number of transactions up to that total amount.

The Finance Bill 2018/19 contained draft legislation outlining the two important changes to ER, affecting business owners and their management teams.

  • The Chancellor announced an increase to the holding period for shares held by individual shareholders. Individuals will now need to hold the shares for at least 24 months rather than the previous 12 months before they can claim ER on the disposal of shares. This change will apply to disposals made on or after 6 April 2019.
  • The second change introduced further tests that must be satisfied before ER is available. This means that along with the existing requirement that an individual holds 5% of the ordinary share capital and votes of the company (test 1), the individual must also be ‘beneficially entitled to’ either:
  • 5% of profits (dividends), and assets available for distribution to equity holders on a winding up of the company (test 2), or
  • 5% of the sale proceeds had the whole of the ordinary share capital of the company been sold on the day of the disposal (test 3). 

Any individuals who sell shares without satisfying these 5% tests (either tests 1 and 2 or tests 1 and 3) will not be eligible for ER. 

So, by way of planning, common actions such as transferring assets to a spouse before sale to reap tax benefits could be a problem as, unless they too have held the shares for the final year and have been an employee or director of the company, they may not qualify.

Also, if profits have been built up in the company, and the level of reserves increases to the point that the company has more than 20% of “investment or non-trading” activity, then this may no longer qualify.

Care also needs to be exercised if the company has issued share options that are exercised on a sale, as these may dilute other holdings below the 5% minimum as a result of a new share issue.

Finally, not all assets will automatically qualify, although some other assets (such as property) can qualify, but may require special consideration.

To summarise, all business owners planning a sale should always take tax advice, either from their accountant or a tax specialist, in advance of any sale exercise, to ensure that this valuable tax relief is maximised.

Selling a Privately Owned Business – Briefing 6 – Key Issues for Buyers

Posted on by Mike Halls

Our next briefing in this series follows logically from our last Blog on grooming, which is to specifically consider what are the key issues from a buyers viewpoint.

At this point you’ll have considered your objectives, you’ve carried out some initial planning and possibly some actual grooming of the business, but before embarking on the final decision, what factors might be important in the market to potential buyers?  From our long experience over many deals we’ve devised an informal check list of ten key points which any buyer will look for.

  1. Positive trading and profit trends and evidence of future sustainability of trading.
  2. No reliance on you as outgoing owner.
  3. By extension, good quality second tier or support management in place.
  4. Good prospects for future growth, especially known unrealised potential.
  5. A stable growing and well spread customer base.
  6. Good markets with growth potential, especially if they are “niche” markets.
  7. That your business has a demonstrable competitive edge, differentiation, or “USP’s”.
  8. Proprietary products or services, brands, licences or patents are always attractive.
  9. A genuine reason for sale, in particular that it is not a forced sale.
  10. No adverse external factors outside an owner’s control.

It obviously isn’t necessary to tick every one of these boxes, but the more of these key factors your business possesses, the better chance of achieving your objective of maximum value on the sale.

Selling a Privately Owned Business – Briefing 7 – Creating Value

Posted on by Mike Halls

The most important consideration in any sale is normally to maximize the value of the business.

So, creating and enhancing value in your business is a key objective at any time, but especially where the ultimate aim is an eventual sale.

Larger corporates are accustomed to relentlessly focusing on value creation throughout their entire life cycle, but for many reasons, smaller businesses have more difficulty doing so.

However, there are many ways in which SME type firms can learn from larger corporates in creating value. Whilst by necessity a general view has to be taken, nevertheless set out below are a few pointers on creating and maintaining value:

• Value is measured both in tangible form, such as revenue and profit, but also in intangible form, such as people, reputation and market differentiation.

• The key factors in creating tangible value are to ensure continued and sustainable revenue growth, producing a return at good margins, with a well controlled cost structure.

• Key issues in creating intangible value include ensuring you have the right infrastructure and people to deliver that value, and the strategic and market position on which to continue to build a sustainable business.

• Although often a less attractive subject for smaller businesses than, say, business development, attention to costs is paramount. Value can often be enhanced equally by attention to costs than by increased business. Attention to costs should thus always be permanent, not temporary or fluctuating.

• Clinically assess all spending and the allocation of financial resources in the business. Check that those resources properly reflect your key business priorities. Try to ensure that the longer term cost structure is focused and sustainable.

• Focus always on margin and return, rather than volume, and avoid “buying” new business at unsustainable margins.

• Assess and understand your strategic objectives, and develop a plan for creating value from that strategy. Understand and focus on what really drives your business.

• Have a clear strategy for identifying and capturing new business. Identify what the key factors are that drive increased business, and ensure resources are properly allocated to that key objective.

• Attention to key processes is important, in two ways. Non value – producing processes can often be simplified, such as reducing time – consuming processes (for example payroll). Additionally, key value – adding processes such as key account management can be optimised through efficient allocation of resources.

• Finally, ultimately it is the people within the business that represent and maintain the value, and creating and sustaining the best team you possibly can is at least equally as important as any specific business or cost activity.

The above points may seem obvious, but the reality of running a small business often means that an owner becomes sucked into working “in” rather than “on” the business. There is all too often insufficient time to “step back” and see the wider picture, or to question and revisit historic and embedded processes. If this could be done, it would almost always result in an improved business with greater and sustainable value.

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Contact: Allan Knowles - Tel: 07867 382950 Email: a.knowles@beermerger.co.uk

Selling a Privately Owned Business – Briefing 5 – Grooming for Sale

Posted on by Mike Halls

In this next Blog in our series, we look at another aspect of early planning – that is “grooming” your business for sale.

Often business circumstances will dictate that a business is not yet ready for sale, and that a further period of time is required to prepare or “groom” the business for eventual sale. The most important consideration in grooming for sale is that the eventual objective should be to maximize the value of the business.

Firstly, consider key strategic issues, focusing on the real “drivers” of the business in the grooming process. These will probably include sustainability of earnings post sale; the undeveloped potential of the business, perhaps markets, products or services; and reliance on the outgoing owner.

Secondly, practical and operational grooming allows the business to be shown as a sound investment. The following are ten common and key grooming issues.

• Management. Ensure a second tier of management exists to provide continuity post sale.

• Customers. Reduce over-dependence on particular customers or suppliers.

• Systems. Review operational systems and financial controls to ensure these are up to the job.

• Company Statutory Records. Ensure these are all up to date and in order.

• Contracts. Review all customer contracts and check they are current, and in
accordance with all legislation and best commercial practice.

• Pricing Policy. Review profit margins and costings on all products / services to ensure
that they are providing the maximum income stream for the company.

• Operating Costs. Review all overheads, removing or reducing excessive or unnecessary discretionary costs of all types. Review and remove excess personal / family cost.

• Legal. Litigation is unattractive to any purchaser. Clear up any disputes as far as possible.

• Staff. Check all contracts with key staff.

• Assets. If any of the assets are redundant, consider disposal. Appreciating assets such as property should be re-valued to assess true market value.

• Investments. Dispose of investments or revalue to show full market value in balance sheet.

• Stock. Review all stock, ensure clean and properly valued. Dispose of old or obsolete stock.

It can be seen from some of the points above that grooming is not a one off matter, but a continual process, best started as early as possible. It can continue even through the sale process, where preparing for the type of offer, structure and terms and full understanding of the buyer’s perspective will contribute to maximizing the value on sale.

Selling a Privately Owned Business – Briefing 4 – Common Pitfalls

Posted on by Mike Halls

Here in our third Blog on selling your business, we look at some common pitfalls to consider before embarking on your sale. You should now be clear about what you want to achieve from the sale of your business, you’ve carefully considered all your options and you’re about to embark on the actual sale process. You’ve almost certainly never done this before, so here are some of the most common misconceptions to bear in mind.

Don’t start unless you are serious. Much time and effort on both sides will go into a sale  and it’s unhelpful for the process to be “turned on and off”.  A vendor who appears insincere is a serious negative factor for good buyers.

Keep expectations realistic. The value of a business is always subjective, and often as much in the eye of the beholder as in the intrinsic value of the business itself.  In some measure all vendors are discounting the future earnings potential from their business into a lump sum now, and aspirations on price must accord with market reality.

Don’t oversell your business. Buyers will generally be experienced, and will be seeking facts, not hyperbole.  Information should be factual, substantiable, and preferably conservative. Buyers will seek explanation and verification on all aspects of the business.

Don’t assume you know the ultimate buyers. A common misconception is that buyers will already be known to the vendor.  In reality this is rarely so.  Competitors and suppliers should be “buyers of the last resort” as for every known buyer, there will be many others as good as or better.

Confidentiality is always important. Whatever the circumstances and however cordial discussions with potential buyers might be, a strong properly signed Confidentiality Undertaking is always essential, if only as a discipline for each buyer, and a disincentive to abuse information received. Pressure to proceed without one should always be avoided.

Prepare quality documentation. A good business differentiates itself from its competition in many ways in normal trading and, when selling, the sale documentation should do the same.  That documentation is normally the first information a buyer receives about the business, and a high quality document both in content and presentation will raise the business to the top of the buyers list.

Negotiate well. For a deal to succeed both parties must be happy with the outcome, neither party will be forced into signing an agreement they don’t like.  Understanding the buyer’s viewpoint, and dealing properly with any issues or concerns raised, is crucial to a successful outcome.

Be Confident. Small business owners often feel their business will be unattractive because it is too small perhaps or too specialised.  This is rarely the case. There are always buyers for all businesses, for whom the business is a vehicle for their own objectives. Buyers will bring skills, resources and capability to the business to take it forward.

Finally, once the deal is agreed ensure that you have a really good sale contract in place.  Having come so far, cutting costs on the legal documentation can be a serious false economy.

Selling a business can be a lonely project, where many owners have little or no experience.  One way to avoid unnecessary and possibly costly mistakes is to seek specialist professional advice, which, whilst unsurprisingly coming at a cost, is almost always more than fully recouped in a successful, and often more lucrative deal.

Selling a Privately Owned Business – Briefing 3 – Planning for Sale

Posted on by Mike Halls

Continuing our Blogs on selling a privately owned business, the next in our logical series is to consider basic early planning considerations, outlining below the key steps in a normal sale exercise.

The process always starts with early planning.  Long experience shows that even if you don’t intend selling in the immediate future, planning for when you do wish to sell is crucial.

Below are ten key issues to consider in getting your business into the best possible shape for your exit.

  1. Ensure all shareholders are in agreement and agree sale objectives from the start.
  2. The best time to sell is when you are in a position of strength.  Consider your trading profile and aim to exit when profits are increasing and likely to grow further.
  3. Try to time the sale to coincide with general confidence in the economy and particularly in your sector.
  4. Consider the impact of any trading cycles or seasonal changes in your business.
  5. Make sure your financial accounts are up-to-date and give a true picture of the business.
  6. Put a good management team in place, and as far as possible make yourself dispensable post sale.
  7. Review your customer base. Identify key existing and potential customers, and ensure any contracts are properly in place and up-to-date.
  8. Ensure any intellectual property rights are properly identified and protected.
  9. Attend to housekeeping issues.  Look at your business property, equipment, and general internal matters.
  10. Last and by no means least, consider a buyer’s viewpoint.  Identify potential future growth and think about what would be attractive to buyers.

Whilst undertaking this planning it’s important to maintain a realistic perspective on the whole issue of the sale, including value, and also practical matters. In particular, it’s all too easy to under-estimate the time and effort required to complete a successful sale, so as always, specialist advice and support can be crucial.

More will follow over the coming weeks in this new series of blogs on the whole sale process and related matters.

Selling a Privately Owned Business – Briefing 2 – Exit Strategies

Posted on by Mike Halls

In this second in our new series of Blogs on the sale of small privately –  owned businesses, we’re looking at early planning for a sale, and the various options open to owners.

Private owners have a number of options for exiting their business.  These will all differ in outcome and may not be appropriate to all circumstances.   We’ve already looked at the first and often preferred option, family succession, and in a logical sequence, other options are as follows.

Replacement Management.

Some businesses, by their nature, are worth more to an owner through entrepreneurial drawings than they are to the market through a sale. One option is thus to take a “step back” from direct control of the business, putting in place appropriate management to run the business, while you as owner maintain an executive and strategic “hands-off” role.  The risk lies in the management’s ability to run the business successfully to produce future dividends, and whether external circumstances may adversely affect the future of the business.

Sale to Management Team (MBO)

Another common method particularly for businesses where there is a strong management team, who may be seen as a “ready made” buyer.  However, management often do not possess sufficient funds to pay maximum value and price is often determined simply by the management team’s ability to raise capital.  Longer term involvement is almost always required from the outgoing owner to secure the balance of value, again with commensurate risk.

Corporate Venturing

A kind of corporate “Management Buy – In”, where a company, often in a related field, buys a strategic stake in the business, allowing the owner partial release of equity, whilst continuing to run the business prior to agreed final exit and full equity release at an expected higher value.

Trade Sale.

By far the most common – and arguably the best method of achieving maximum value on sale.  Another trade buyer, generally larger and more powerful, will be able to drive higher future value through the synergy of bolting together the two businesses.  Trade buyers are is thus usually willing to pay a “premium” price for the opportunity of acquiring the business and securing future growth and value.

Stock Market Flotation.

In practice rarely a realistic option for the small business.  The business must have reached sufficient size and growth profile to attract external investors, and generally the costs are prohibitive.  A flotation is not a full exit for the outgoing owner who will have to retain capital and remain with the business for a period post sale.

Ceasing Trade.

Always the least attractive option other than in exceptional circumstances.  Normally a “last resort” where other options are exhausted.  Even for small owner-managed businesses the basic principle is that a business is worth more as a going concern than on a break-up basis, where the owner will only ever achieve less than asset value once liabilities and costs have been met.

Succession for Family Businesses

Posted on by Mike Halls

This is the first in our new series of Blogs on our core activity, the sale of small privately –  owned businesses. We’ll be working through a logical sequence of related topics, from the initial preparation stage through to completing a sale.

In this first Blog, we look at one of the key alternatives for owners to a market sale, and often an obvious and indeed preferred route – family succession.

Preparing for the next generation to take over is obviously particularly important in a family business where the family wish the dynasty to continue. But this isn’t easy by any means, as family structures change and don’t necessarily share the same values or approach as previous ones. Nevertheless, good advance planning can help smooth the path. Key factors include the following.

  • Perhaps the first key objective is to ensure the business is protected from unforeseen future circumstances, such as unexpected death, divorce, insolvency or simply a family dispute.
  • The second normal objective is to ensure continued practical and effective control, irrespective of which family members actually hold shares.
  • One fundamental decision therefore is who should be able to hold shares and thus ensuring there is the right degree of continued control.
  • Generally, some form of restriction on who can hold shares is desirable and practical, to avoid an ever widening and thus unwieldy shareholder base.
  • It could initially be a chosen successor, if so how will other family members be compensated, if at all?
  • Shares could be restricted to just the next generation, which can be effective in addressing potential problems of control.
  • If a wider ownership is desired, will this include only direct bloodline family? If it includes their spouses, there is a danger that the business may gradually leave actual family control, for example if a family shareholder dies and their spouse remarries, subsequently transferring the shares to the new spouse or children.
  • In the absence of direct instructions from current shareholders, a clear shareholders agreement that covers all these basic issues is an obvious practical step.
  • In any event, some form of clear instruction about the future transfer of shares is crucial, for example, guidance as to how shares should be valued, and how transferred in the event of unforeseen eventualities.
  • Unfortunately, family disputes, sometimes severe, are by no means uncommon and can seriously endanger a business. There must be clear direction as to what action is taken in such circumstances. One method is “compulsory transfer” where under given circumstances, for example personal insolvency, shareholders are compelled to sell their shares back to the family.
  • Last but by no means least, families must protect their businesses from the effects of untimely death of a key shareholder. It is absolutely essential that key family members have made a Will, as dying intestate can lead to prolonged Probate delays which may materially affect the running of the business.

As with all such issues, common sense and good planning are essential, but proper professional advice on structuring and drawing up key agreements is always highly desirable.

Employee Ownership Trusts

Posted on by Mike Halls

In this blog we examine an alternative option for selling a business, Employee Ownership Trusts, or EOT’s. EOT’s are a relatively new but growing alternative to a standard sale of a business, especially where there are more complex succession issues, and also where it is intended to reward employees of the firm. There is some complexity to EOT’S, but salient features can be summarised as follows:

  • A recent independent report found that among employee-owned businesses, there were increased levels of productivity and efficiency, improved workforce retention, easier recruitment and employee-driven innovation.
  • An EOT offers an attractive route for those prioritising the legacy and culture of the business.  It’s more a philosophical decision than a financial one.
  • An EOT can be the best solution for a business to keep the whole team in place and to provide continuity for a creative culture, with those that create value in the company continuing to benefit directly from that value.
  • Employee ownership requires two things.  There must be a mechanism where the ownership can be shared among all employees.  Equally the business has to have a culture and a structure where employee influence and voice can be shared.  The two are intrinsically linked, otherwise all the benefits will not be achieved.
  • There are three requirements that the EOT ownership structure must meet.  First, all employees must benefit.  Second, they must benefit on an equitable basis.  And third, there is the “controlling interest” requirement – essentially the trust must have control in different ways over voting rights and profits.
  • With an EOT the trading company effectively funds the transaction itself, so the majority of transactions are funded by vendor loans or deferred consideration. These are repaid by the trading company, although excess cash could be used to make a repayment at completion.  A minority will also get third-party bank debt again taken out by the trust, which will also be repaid by the trading company.
  • One EOT characteristic for the selling founder is that they will not usually get full payment on completion, although it is not uncommon for a “philanthropic” owner to compromise on price. 
  • One issue is how the deal is funded. Being people-heavy and asset-light, there may be little security against which to raise debt for growth. However, providing it is well structured, there should be headroom in the repayment schedule, which allows for operating cash to fund growth.
  • Another issue is that a potential disadvantage is the inability to get cash out. But it is effectively long-term “patient” capital, which is what the founder wants, because they want to see the name remain and their business continue to grow.
  • The tax benefit is also very often a key motivator for any founder who wishes to sell their business to an employee ownership trust (EOT).

Essentially under an EOT the entire share capital of a business are acquired, providing an exit for all shareholders on equal terms, financed out of future profits. But EOT’S are a complex issue and as with all such matters, good professional expert advice should always be taken, as individual circumstances can differ considerably.

Business Discussions and Conversations

Posted on by Mike Halls

Following on from our last blog, we take a further look at a different angle on communication, specifically conversations and discussions, both internal and external.

Sometimes discussions simply don’t go well, and sometimes we simply get conversations wrong. It’s very easy to unwittingly paint either ourselves or the other party into a corner, from which it can be hard to move forward without retracting what’s been said, or indeed simply apologising. And apologising can certainly be very difficult, getting it wrong often just exacerbates the situation. Here are a few tips.

Use ‘I’ Sentences

Apologising means taking on full responsibility for something. Say it like it is, for example “I’m sorry that I hurt your feelings”.  According to empirical research, a person is most likely to forgive and forget if you admit full responsibility.

Don’t justify your actions

It’s a natural reflex to try and justify your own actions, but not a good one, because a justification is in effect a denial of the apology.  Most effective is simply an explanation and an admission of guilt combined.

Avoid “but” sentences

An apology in which the work “but” crops up is almost never understood as an apology but as an excuse.  Avoid at all costs.

Don’t ask for forgiveness

Asking for forgiveness is rarely effective.  According to research, spare yourself the bother, as nobody likes to grant absolution. Just move on.

Change yourself

Even the most honest apology is worthless if you repeat the same mistake several times.  Making an apology is above all a commitment to making a change and an offer to make amends.

Non-Violent Communication

In summary, psychologists generally agree that conflicts need to be dealt with, but the question is how?  The American psychologist Marshall B Rosenberg developed the idea of “nonviolent communication” based on the premise that it’s not what you say, but how you say it. There appears to be some truth in that, as long we don’t allow ourselves to indulge in aggressive language, which can only lead to counter-aggression or submissive subjugation.

But why is all this so difficult to do?  Often, we ourselves are the problem.  Take the so-called “attribution error”. If we arrive too late, there was a lot of traffic.  If others arrive late, they set off too late. We are by nature prone to pass judgement, and it’s always easier to blame someone else than to think about why something happened. Avoiding this is the key acknowledge needs and take them seriously, and express clear objectives,for example “Please tell me what you need, so we can talk about it”.

Good Business Communication

Posted on by Mike Halls

It’s good to talk, but sometimes we don’t always say what we think. For a long time the norm in business was that group discussion and decision-making was better than individual decision-making, but this has since been overtaken by alternative views. 

Sometimes groups make very bad decisions, rejecting outside opinions or information. In the warmth of a like-minded group, people reassure themselves that they are right when in fact they have been looking only for evidence that confirms their objectives.

Genuine, real listening is a rare commodity and a great gift, because you are giving to the person you are listening to your most valuable asset – your attention. Here are some tips.

Really Listen

As soon as you start thinking about what you could ask next, what you would prefer to be telling the other person, or what you want to cook for supper tonight, you’ve lost concentration.  The other person will notice this and have the feeling you are not engaged.  Which you aren’t.

Don’t finish the other person’s….

Some people have a tendency to impatiently finish the sentence or thought of the person they are talking to.  Although very slow thinking and talking can be irritating, don’t interrupt.

Your body language says a lot

Look the other person in the eye – but don’t stare.  Nod – but only if you want to agree with what they are saying or show that you have understood something important.

Notice the little things

Listen out for details in what they are saying and pick up on these later.  This makes it easier to ask questions and lets the other person know that you’re really listening.

Be a friend, not a judge

Resist the impulse to give the other person advice – unless they specifically ask for it.  Instead, take the conversation back to an important part of the story.Why we don’t speak up is a phenomenon known as the “spiral of silence”. Most people have a fear of isolation and observe the behaviour of others to assess which opinions will be accepted or rejected.  “We fear isolation more than being wrong” wrote Alexis de Tocqueville.We tend to conceal our opinion if we think that it will expose us to group pressure.  If we feel public support, however, we tend to express our opinion loudly and clearly. We can all use this knowledge to help our business communications.

How to build strong relationships in the workplace.

Posted on by Mike Halls

Good professional relationships are essential in order for us to be effective and successful. Through it’s logical to want to focus on the good one’s, it’s also important to manage the difficult ones. The relationships you build with your colleagues have the potential to shape your entire working experience, so here are some tips.

  • Be Courteous

Common courtesy goes a long way when it comes to creating a pleasant work environment.  However busy you may be, always acknowledge other people’s contact, even if it’s just with a wave or a nod.  Say “please” and “thank you” and if you’re having a bad day, don’t take it out on others.

  • Communicate effectively

Whether it’s in person, on the phone or by email, your communications should be professional, clear and concise.  It’s also important that you give feedback to your fellow workers, which can have a particularly positive impact.

  • Respect other people’s time

Everybody has deadlines to meet and projects to complete, so try to realise when people need their own time.  If you really need to speak to somebody and they’re busy, just ensure they’re aware and give them the space to come back later on.

  • Develop your Emotional Intelligence

Understanding how your own emotions can affect your work and being able to empathise with others goes a long way in maintaining good relationships within the office.  For instance, take time before you talk to someone to try to see things from their perspective.  You will be more objective about what’s going on, and able to empathise and work better with the other person.

  • Manage Difficult Relationships

Everyone has difficult relationships, not everyone can get on with everybody all the time. The key is to manage those relationships, ensuring that things are bearable and don’t get in the way of effective work.   

  • Be Direct

Guarded conversations not only make it hard to speak plainly but can contribute to a mistrustful workplace. Instead, be honest and direct in a polite and professional manner, even if what you’re saying might be hard for other people to hear. This will create a culture where people feel comfortable speaking their minds and will make it easier to work for everybody.

  • Be Welcoming

No matter who you do or don’t like, it’s important to be professional and put business above everything else.  Make yourself available for discussions and meetings, and don’t be afraid to stop by colleagues’ desks to ask for advice, or to chase up work.

  • Avoid Gossip

Gossiping is one of the worst career mistakes, and should be avoided. The line between friendly and normal conversation is very thin, and sometimes normal discussion can morph unintentionally into gossip. The golden rule is that if you have nothing good to say, then say nothing!

Relationships at work can play a large role in cultivating a productive and efficient working atmosphere within the office, as well as creating a pleasant company culture.  It’s vital to build good relationships while simultaneously managing the difficult ones in order to make sure everybody works well together.  Though you’re not at work solely to make friends, you’re not there to make enemies either!

Maximising Sales

Posted on by Mike Halls

According to official statistics, the UK is one of the world’s top five nations for producing new businesses, yet it doesn’t make the top ten when it comes to keeping those businesses alive for five years.

Empirical research indicates that an ineffectual approach to sales is one key factor, particularly for the SMEs that employ around 60% of the UK’s private sector work, sales above all else are critical.  Here are some pointers derived from market experience to help SME owners address this point.

1. Creating a Sales Led Environment.

For an SME very often the first sales person is likely to be the founder, whose belief in and passion for the company gives them a unique ability to win business.  However, as the business grows, many struggle to transfer that sales ability to other key employees.  It’s therefore critical to instil and maintain an effective sales process that doesn’t continually depend on the founder for its success.

2. Get Your First Sales Appointment Right.

You, as founder, are at the hub of your sales strategy, but too often even though sales activity is transferred to others, you, as founder, remain deeply involved in sales, particularly in closing deals, this deflects from your key focus which should be on leading the company’s growth.  As owner you need to instil a coherent sale process understood by all.

3. Know Your Proposition.

Ensure that you have a clear plan for elements such as pricing, packaging and how your product or service is acquired by the consumer.  Factors include how it integrates with, or complements, other aspects of the customer’s business, lifetime customer value, support requirements and future revenue options.  You must consider these factors carefully to address and remove customer’s resistance to making that first investment in your product or service.

4. Understand Your Customers.

Feedback is the very foundation of growth.  Gauge customers’ opinions of your offering, especially the reasons for any changes in sentiment.  Know your customer churn rate and what’s behind it.  Refine your product or service.  Acquiring customers can be vastly more costly than retaining them.

5. Choose the Right Market.

This is a profound decision.  Targeting the wrong country, industry or demographic, for example, will set you up to struggle.  Mistakes can be as simple as picking the market the owner knows best and missing a much richer adjacent one.

6. Target the Right Firms.

There will be subsets of any market that are much more willing than others to buy your offering.  Choosing the right ones will dramatically shorten your sale cycle.

7. Complete the Sale or Move On.

Know when to walk away from a prospect if a sale is not progressing as needed.  This will enable you to devote more valuable time to those that are more likely to buy.

The results of a successful sales strategy should include selling to more new customers, selling more to existing customers, decreasing the length of the sales cycle, increasing the average order size and increasing your firm’s capacity to process multiple sales.

Pricing, Charging and Value

Posted on by Mike Halls

How do you charge for the services you provide to your customers? What are you and your services really worth? And how do you establish that, and more importantly, convince actual and potential customers, particularly in a world where the price of everything is driven down to the lowest denominator with apparently increasingly scant regard for actual value?

If you are fundamentally a product based business, then establishing base cost, adding appropriate related costs and a profit margin is relatively easy in itself, and can to a degree be compared to the market. Even so, the value – added aspect is still hard to establish. And if you’re selling a service, and in a sense thus selling time, how do you price yourself adequately and fairly?

Here are some tips arising from experience and best practice:

  • Understand the market – It’s clearly fundamental to ensure that your costing is sufficient to actually cover costs and establish a profit.  Establishing a good knowledge of the market and what your competitors are doing will help to establish a base for your own pricing. But your own worth, reflecting your differentiation from others in the market must be established too.
  • Understanding your own value – To charge what you’re worth, understanding your own value is the first step.  You need to clinically reflect on your expertise.  This will include your professional qualifications and expertise gained over the years, as well as your capability.
  • Understand the customer’s needs – Find out what the customer’s real needs are. People use service professionals mainly because they have an objective to achieve or a problem they need solved.  Understand what solving the problem will be worth to them and what the problem will cost them if it’s not resolved, and you have a basis for establishing your worth.
  • Increase your own worth – Self-worth is at the heart of everything we do as individuals, and is also very important from a business viewpoint. If you don’t feel 100% worthy, your self-esteem will be low and your perception of your worth will be undervalued too.
  • Focus on Value not Price –   This is crucial.  You need to encourage customers away from looking at the price of your service, to seeing the value of it. Once this is understood the price will seem low by comparison.
  • Communicate your Value – Don’t hide your talents under the proverbial bush.  By ensuring that the customer knows exactly what they’ll be getting for their money, they’re much more likely to do business with you and pay you what you’re worth.
  • Be Comfortable Talking Money – This is also important to charging what you’re worth, as if you don’t become comfortable discussing it, you will never be able to negotiate properly, and therefore always risk undercharging.

In summary, be strong in your belief in yourself and your business, eradicate negative feeling about money such as “money is the root of all evil”, be confident in imparting and discussing your worth to customers, and remember the often misquoted but relevant phrase about “a man who knows the price of everything and the value of nothing!

Closing a Privately Owned Business

Posted on by Mike Halls

Continuing our present series of blogs on random business topics, we now look at a relatively unusual issue, that of closing down a privately owned business.

Mostly, businesses are either handed down to family or management, or sold to an external buyer. Sometimes though, for a variety of reasons, it is preferable for an owner to simply close their business down instead. Although professional advice is usually that however modest a business, there is always some additional value as a going concern, once in a while personal or business reasons make closing down the most attractive course of action. This is referred to as a voluntary liquidation. What are the key factors?

  • First it should be stressed that closing is not a full liquidation, and a voluntary liquidation is not held to be an insolvency procedure, so there are no credit issues. Closing down a business is a voluntary and unforced action, the aim usually being to realise the assets in the business, especially any cash built up.
  • This type of closure is called a Members Voluntary Liquidation (MVL) and the first key factor is that the business must be solvent. It should also have distributable reserves exceeding £25,000.
  • One of the main reasons for selling outright is to receive the benefit of Entrepreneurs’ Relief on the Capital Gains Tax (CGT) usually only achieved through a sale, but this can still be possible through closing down.
  • To close your business you must firstly ensure that all debts have been paid, all monies owed received, and that all taxes are up to date. You must also cancel any contracts of any type. By implication the business whilst still theoretically trading will in effect be almost dormant.
  • The next step is to inform Her Majesty’s Revenue and Customs (HMRC) that you wish to “deregister” the company. This means that the trading company will be removed from Companies House.
  • You will then be able to withdraw any cash reserves from the business, which are entirely your property as owner, but your key aim will be to do so in the most tax efficient manner.
  • The best way to achieve this is to make a Capital Distribution within three years of ceasing to trade, thus attracting Entrepreneurs’ Relief (currently 10%) on the net gain on closure.
  • To qualify for Entrepreneurs Relief, your company must have traded for at least 12 months prior, and you as owner must own more than 5% of the share capital.
  • The Capital Distribution must be made through a formal liquidation, and you will need to appoint a Liquidator, pass a special resolution and a declaration of solvency. The costs of all this can be relatively high, as there will be liquidator’s fees, plus various official fees.
  • Once a liquidator is appointed, the Company itself will not carry on any further business (other than necessary to assist the liquidation) and all your powers and responsibilities as Director will cease, and pass to the liquidator.
  • The liquidation process is officially completed when, after the due process, the Liquidator calls a final General Meeting, where the account of the liquidation is presented, and in relation to which there are various official procedures, culminating in a formal advice to the registrar of Companies, and after a three month period, the company will be stuck off at Companies House, thus officially ceasing to exist.
  • With an MVL, when the liquidation process is complete the liquidator will distribute the proceeds to you as shareholders. The distribution to shareholders is treated as a capital gain and not taxed as income / dividend, and Entrepreneurs Relief will reduce the tax rate (currently to 10% as opposed to 18%), provided the gains are less than £10m.

Whilst relatively simple especially for a truly solvent company with a genuine reason for closure, closure cannot be undertaken without an independent liquidator, and there are many official steps, for which, as always, good professional advice is essential.

Limited Liability Partnerships

Posted on by Mike Halls

For many years the main vehicle for entrepreneurs setting up a business has been the Limited Company, principally because of the inherent protections and related benefits afforded by the separate legal entity that a company provides.  

But increasingly the relatively new Limited Liability Partnerships (LLP’s), originally used mainly by professional firms, are being used for trading businesses. So what are the main factors?

  • An LLP is a partnership in which some or all of the partners have limited liabilities, thus displaying elements of both traditional partnerships and limited companies. Specifically, in an LLP one partner is not directly responsible for another partners misconduct or negligence.
  • There must be a minimum of two members. Each member must register for tax self assessment with HMRC, and each member pays tax on their share of the profits, but is not liable personally for any debts the business cannot pay.
  • LLP’s are legally counted as transparent for tax purposes, meaning that LLP profits are only taxed once, in the hands of the owners – whereas a company’s profits are subject to Corporation Tax, and then for the owners to Income Tax.
  • An LLP structure can give significant benefits to equity members and partners. Ownership interests or Partnership shares can be more flexibly moved between members or partners without incurring various taxes such as employment tax, National Insurance or Capital Gains Tax.
  • Additionally, genuine equity members can receive more generous expenses treatment, and equity members do not face car, car fuel and other benefit charges.
  • Finally, the LLP structure offers a number of trading related benefits not available to the older limited company structure. For example, early stage losses may be relieved against personal income, and possibly carried back to earlier tax years.
  • But a straightforward LLP may not be the best structure for all businesses. For example, capital intensive businesses with high investment requirements in plant and machinery may lose certain substantial investment allowances.
  • Sometimes, a hybrid structure may be the optimum solution. For example, LLP’s do not enjoy the same R&D tax credit advantages as limited companies – but limited companies can become members in an LLP structure, thus giving the best overall solution for high – tech companies.
  • Another hybrid structure can work for very profitable businesses who wish to retain profits but avoid the top rate (45%) tax rate, where it is possible to remain a limited company but be introduced as a corporate member or related service company with an entitlement to a proportion of the LLP’s profits.

Clearly, an LLP is not suitable for all circumstances, and as always, great care and specialist advice is vital to ensure the right structure is chosen, but it is always worth at least considering an LLP structure.

Fighting Fraud – The Golden Rules to Protect Yourself

Posted on by Mike Halls

Fraud today is ever more sophisticated and organised, and every sector of the economy faces this threat, so all businesses should recognise that there are important steps to take to protect themselves.

The nature of fraud against businesses is constantly changing.  It’s no longer petty scams – nowadays fraudsters are much more likely to target you via a telephone or a computer. Virtually all sectors of the economy are under threat from fraudsters.

Here are some of the most common frauds seen today:

  • Telephone (vishing): Fraudsters trick you into divulging security credentials over the telephone.  This includes telephone calls pretending to be from the fraud department of your bank or even the police.
  • E-mail (phishing): you are encouraged to click on a link or document within an e-mail that downloads malicious software onto your computer or directs you to a fraudulent website that looks identical to the official site.  This allows a fraudster to gain access to your security credentials or card information.
  • Malicious software (malware/Trojan): your computer may be infected with malware by responding to a phishing e-mail, visiting insecure web sites or using an insecure internet browser.  This also allows the fraudster to capture your security credentials or bank card details.
  • Invoice fraud is another fraud against businesses.  The fraudster advises that the bank details for the settlement of future invoices should be changed, meaning that your next payment will be paid into their account.  The fraud is usually discovered when the supplier that sent the genuine invoice chases for non-payment, by which time the recovery of any funds is highly unlikely.
  • Fraudsters also continue to carry out cheque fraud against businesses but there are simple steps you can take to protect yourself against these too.

It’s not all doom and gloom.  There are some simple but effective steps you can take to protect yourself from fraud.

  • Banks will never ask for your full PIN and password online; only 3 random digits from each are needed to log-in;
  • Banks will never ask you for your PIN and password or any smartcard codes over the telephone; so beware of imposters;
  • Banks will never ask for smartcard codes to log-in; these codes are used to authorise payments;
  • Store cheque books securely, ideally under lock and key at all times, reconcile cheques used against your statements, and follow-up: stop missing or lost cheques.
  • On invoices, always contact the supplier or creditor to validate requests for payment or to amend bank details, and closely scrutinise all requests for payment.  Check the e-mail address or fax number they are sent against your company records.

You can obtain more fraud and security advice from your own bank, don’t hesitate to do so.  All businesses are at risk, however small or modest their operations.

Executive Emotional Training

Posted on by Mike Halls

Taking a quick break from our latter series of key topics, we’re taking a quick look at other business issues, in this case, emotional training for business owners.

It’s tough running a small business, there are increasing stresses and strains. So this blog deals with a subject often ignored or indeed swept under the carpet. It’s just a few simple thoughts on how to better deal with all those stresses and strains of business life.

  1. Extinguish negative thoughts: It’s easy to get into a habit of negative thoughts, especially about small things. If this happens, interrupt with a positive thought, for example “it won’t last that long”.
  2. Set and complete small goals: When large tasks seem daunting, break them down into small chunks, which are easier to manage and which completing produces essentially a feel good factor, leading to more. 
  3. Try to feel more positive than you actually do: Business is hard and there are always difficulties, and this can lead to self doubt. Think positively if only about small things, again this helps a positive train of thought.
  4. Teach yourself to say “no”: Avoid pursuing unobtainable goals of perfection, which leads to negativity. Develop the confidence to say “no” and focus on achievable goals. 
  5. Resolve inner conflict: “The white nose of inner conflict is the enemy of peace”. Inner conflict often arises from untrue perceptions, say about the business, or your leadership. Think clinically about why you actually think that, often it’s based on some past issue.  When you understand that, you can resolve it.
  6. Understand your limitations: Often emotions are learned behaviour, and can simply become bad habits. Try to determine why you feel like you do about something, and then you can feel and express more positive feelings.
  7. Ask how others see you:  There is often a clear and incorrect difference between our self image and how others see us.  Seek trusted opinions about how others really do see you, this is often a better person than the one we often look through.
  8. Physically connect: In an increasingly virtual world we become necessarily disconnected.  Old fashioned physical gestures, from eye contact, to hugging tap into our actual innate need to connect.  Do more interaction, it’s very likely to be welcomed.
  9. Be kind: Last and by no means least, an old truism but one often forgotten in the increasingly hectic world we live in – small voluntary acts of kindness bring as much happiness as they give to others.  They help us rise up out of the murky depths of everyday life.

A Brief Guide to Private Equity

Posted on by Mike Halls

Continuing our quick look at various fundraising topics for SME’s, here is a quick guide to Private Equity Funding.

The UK has a highly developed Private Equity market with more businesses funded in the UK than any other European country. So, what are the key considerations for attracting Private Equity?

• Private Equity firms need to deliver capital gain to their investors. They do so by finding and backing good management teams with a commensurate desire and ability to own and succeed in their own business. The PE firm can make significant returns, while management can share in potentially substantial rewards from their efforts.

• Typically, Private Equity investors aim to double or treble their money over a three to four-year period, usually through on-selling or floating the business.

• Fundamentally therefore Private Equity firms seek companies with clear growth potential, and will generally provide funding for:

  • “Cash out” deals – owner-managers sell a proportion of their shares, allowing them to realise cash while retaining a stake in the future success of the company.
  • Management Buy Outs (MBO) – the existing management team acquires the business from its present owners and becomes a shareholder alongside the Private Equity funder.
  • Management Buy In (MBI) – an external management team with a proven track record acquires the business and becomes a shareholder with the Private Equity funder.
  • Buy In Management Buy Out (BIMBO) – a hybrid of a MBO and a MBI, where the business is acquired by a team consisting of incumbent and incoming external managers.
  • Acquisition Capital – investing funds in a business to assist an acquisition.

• As with any investment with significant potential return, there is also risk, and some investments fail, with managers and investors alike losing their money. There are many factors affecting successful Private Equity backing, but there are three absolutely vital elements on all deals:

  • A high-quality management team which has vision, drive and experience to deliver the necessary growth. Private Equity firms back people, not businesses alone.
  • A good quality business which has clear differentiation from its competitors and which operates in an attractive market with good growth potential.
  • A clear exit path identified right from the outset and a clear plan for achieving that exit.

Hard work, dedication and a clear business strategy are all required to achieve the growth and return required for Private Equity investors. Knowledge and understanding of the business and the sector are essential, but above all Private Equity firms are backing the management.

An Introduction to Crowdfunding

Posted on by Mike Halls

Continuing our quick look at various fundraising topics for SME’s, here is a quick look at Crowdfunding.

Crowdfunding could be seen as one of the buzzwords of the moment, a new funding phenomenon that has already established itself as mainstream. But what is it really?

Put simplistically, crowdfunding means funding a project or venture, often but not necessarily a new startup, by raising the required money from a large number of people, usually individuals, and mainly through the internet.

In the past, raising the necessary capital for a new venture or unproven idea relied heavily on what the market called the “three f’s”….., family, friends and fools! Once established, mainstream funders and venture capitalists then became interested. Crowdfunding has opened up whole new funding possibilities for startups and embryonic ventures alike.

Until relatively recently crowdfunding was unregulated, and seen as “niche”, but this is no longer the case, crowdfunding is now regulated by the FCA, and presently there are over 600 sites worldwide.

For investors, previously such funding was the preserve of the wealthy and well connected, with other investors finding it hard to find and invest in projects of interest to them. Crowdfunding has changed all that, allowing businesses and investors alike free and simple access to each other. So how does it work in practice?

• Essentially crowdfunding allows entrepreneurs, businesses and creators to list their project and needs on a “platform” which, using social media, then reaches many thousands of potential funders.

• The crowdfunding platform takes the business through a process to create a compelling “pitch” to attract investors.

• Crowdfunding platforms fall into three categories: donation based; equity based; and debt based.

• On donation based platforms the “crowd” make a financial donation to projects, often in exchange for a product or gift. People invest in large measure because they believe in the cause.

• Equity based platforms offer investors the opportunity to invest collectively in a private business for shares in the company. This is classic investment with all the risks that entails.

• Debt crowdfunding platforms (also called “peer to peer”, “P2P” lending) enable the lending of money without resorting to the mainstream banks. Investors receive their money back with interest.

• Clearly, before investing time and resources in building a Crowdfunding campaign, it’s essential to determine if Crowdfunding is right for your business and if so, which type. Are you looking for simple funding or long-term investors or perhaps merely recognition and increased visibility?

• Just as with other funding, real effort will be required in pursuing Crowdfunding, and there will be costs involved as well. You will need to be fully prepared for the effort required to make your Crowdfunding project a success. Remember also that Crowdfunding is not a route to automatic success. Crowdfunding platforms can give a high chance of reaching out to potential investors, but there will always be competition from many different projects and there is a widespread misconception that people will invest or support any project immediately after the Crowdfunding campaign. This is not the case.

• In summary, for most Crowdfunding will always be principally about raising the required funding, but there are other benefits. Crowdfunding brings attention from potential partners and the media, creating positive publicity, it is also a useful forum for learning about markets and products, and also builds customer relations and a larger customer base.

Crowdfunding has been a classic disruptive innovation and has certainly democratised funding. Crowdfunding is also growing and evolving, with all manner of predictions of billions of funding transactions globally based on recent trends. Indeed, both banks and corporates are beginning to enter the Crowdfunding market creating additional Crowdfunding models to capture revenue. Crowdfunding is clearly here to stay.

Raising Growth Capital through Business Angels

Posted on by Mike Halls

The next in our current series of blogs looks at what has always been a key issue for small businesses in particular, that is raising capital for growing SME’S.

There will always come a time, particularly for a successful business, that generated capital available to continue to grow the business becomes insufficient to meet the business needs. Sometimes this can be solved through mainstream borrowing through a bank or similar funding institution.

However, increasingly, especially for long term growth, an owner will look for a potential investor to provide the necessary capital. Such investors are often referred to as “business angels”

An angel investor is usually an affluent individual or group of individuals who provide capital for a business start-up or an early stage growing business, usually in exchange for convertible debt or ownership equity.

Angel investing is one of the most significant sources of investment, and whilst the market is difficult to calculate since many business angels are investing privately, an estimated £1.5bn per annum is invested by angels annually in the UK.

Angel investment differs from venture capital finance, which invests in businesses through managed funds raised with private or public money. The venture capitalist manager invests the money on behalf of the fund which has to be profitable and make a return for the fund’s investors. Due to high costs of administration and the need to be very selective to ensure a return on the fund, VC funds are more risk averse and thus make fewer small investments in smaller growing businesses, hence the growth in business angels.

In general, individual business angels will invest anywhere between £10,000 and £500,000 in a single venture, depending on the business and the growth needs. Often Angels will also invest as part of a syndicate, pooling their experience and time to add more value and bring more capital to their investment. This means that larger amounts of funding can be raised if required.

Angels usually invest under formal regulated EIS/SEIS schemes in order to achieve maximum tax relief on their expected investment returns, and under those rules they cannot take more than 30% equity in your business. Crucially however you need to be motivated to grow your business and increase returns for both you and the Angel Investor.

How Angel Investors look at a business and assess its suitability for investment is a huge subject which needs to be covered in a separate blog. Generally, the key initial aspect is the people involved in the business, their experience, skills, drive, and how they present themselves that is most important for Angel Investors. They will then of course look in great depth at the business itself and the business plan.

There are now an increasing number of types of Angel Investor. Some are entrepreneurial, others corporate with a different vision of growth, some focus on specific sectors such as high–tech, while others still are professional Angels, often professionally employed as lawyers, accountants or advisers, who may build groups of businesses and have numerous investments.

To these can also be added the most recent phenomenon, Crowdfunding, which must be the subject of a separate blog. For any business owner, it’s clearly important to choose the best Angel Investor to suit your own circumstances, for which as always, some expert professional guidance will be invaluable.

Lessons in Communication

Posted on by Mike Halls

Its good to talk, as they say, and the old maxim that its not what you say but the way that you say it still holds true. But the business environment is increasingly pressured, and with new social media pressure, often we don’t always say what we think, or what we mean.

Here are some idea’s that may help to communicate better.

  1. Reduce Costs.  The opportunity for cutting costs is almost always greater than you think, and even a small reduction can make a big difference.
  2. Squeeze Working Capital.  Good housekeeping is always important. Don’t be reluctant to chase invoices and take advantage of early settlement discounts where possible.
  3. Check Pricing.  Especially for a premium product or service.  It’s amazing how often pricing is overlooked, with an innate belief that it must always go down.
  4. Keep your Customers.  It’s almost always more expensive to get new customers than to keep your existing ones.  Old customers are already bought in to your service, maximise them.
  5. Buy Well.  Constantly review suppliers and prices, like costs a small amount can make a big difference.
  6. Keep up with the Market.  When your focus is almost totally on business survival, it’s easy to forget to watch industry developments, and how they can affect you.
  7. Check out the Competition.  Understand what they’re doing and how it affects you, ensure you are not left behind, watch for new ideas that you can replicate.
  8. Review your own Products / Services.  Do they need a full revamp, are there any gaps in your offering, or opportunities for new business?
  9. Plan Well.  Always keep the big picture in mind, whilst managing day-to-day trading.  Ensure you work on the business as well as in it.
  10. Finally, reduce the Tax Take.  So often businesses don’t know of or don’t take advantage of all allowances.  Take good professional advice.

Finally, remember, its “profit for show, and cash for dough”! Good housekeeping also starts with being selective in what business you take on, always avoid buying business just for volume, it’s more about achieving at least a decent margin.

HOME IMPROVEMENT BUSINESS Ref: 2904

Long established double glazing business in operation for over 35 years.  Specialise in the supply and installation of quality windows, doors, conservatories, repairs & roofline replacements. Highly qualified and experienced team in place. Very well located in the South East. The business holds a number of accreditations. T/O comfortably in excess of £1m with EBITDA exceeding £100k.
Contact: Lucy Roy - Tel: 01959 565191 Email: mjh@beermerger.com

Improving Business Sales

Posted on by Mike Halls

Empirical research shows that the UK is one of the world’s leaders for entrepreneurial ventures, but slips well down the pecking order for the longevity of those start – ups.

That research also suggests that often part of the reason for that is an ineffective sales approach and process, particularly as the business grows. Here are some tips from sales professionals on how to ensure your business grows and thrives. 

  1. Reduce Costs.  The opportunity for cutting costs is almost always greater than you think, and even a small reduction can make a big difference.
  2. Squeeze Working Capital.  Good housekeeping is always important. Don’t be reluctant to chase invoices and take advantage of early settlement discounts where possible.
  3. Check Pricing.  Especially for a premium product or service.  It’s amazing how often pricing is overlooked, with an innate belief that it must always go down.
  4. Keep your Customers.  It’s almost always more expensive to get new customers than to keep your existing ones.  Old customers are already bought in to your service, maximise them.
  5. Buy Well.  Constantly review suppliers and prices, like costs a small amount can make a big difference.
  6. Keep up with the Market.  When your focus is almost totally on business survival, it’s easy to forget to watch industry developments, and how they can affect you.
  7. Check out the Competition.  Understand what they’re doing and how it affects you, ensure you are not left behind, watch for new ideas that you can replicate.
  8. Review your own Products / Services.  Do they need a full revamp, are there any gaps in your offering, or opportunities for new business?
  9. Plan Well.  Always keep the big picture in mind, whilst managing day-to-day trading.  Ensure you work on the business as well as in it.
  10. Finally, reduce the Tax Take.  So often businesses don’t know of or don’t take advantage of all allowances.  Take good professional advice.

Finally, remember, its “profit for show, and cash for dough”! Good housekeeping also starts with being selective in what business you take on, always avoid buying business just for volume, it’s more about achieving at least a decent margin.

Cash is Key

Posted on by Mike Halls

We are now well into 2019, and although the economy continues to progress positively, the lack of progress on Brexit is beginning to generate a new set of uncertainties. Good business housekeeping as always is therefore crucial.

It’s therefore worth recalling the old adage that profits are all very well, but it’s cash that matters to the health and survival of businesses. Every little really does help.

So, here are 10 tips for maximising cash resources during these uncertain times:

1. Reduce Costs. The opportunity for cutting costs is almost always greater than you think, and even a small reduction can make a big difference.

2. Squeeze Working Capital. Good housekeeping is always important. Don’t be reluctant to chase invoices and take advantage of early settlement discounts where possible.

3. Check Pricing. Especially for a premium product or service. It’s amazing how often pricing is overlooked, with an innate belief that it must always go down.

4. Keep your Customers. It’s almost always more expensive to get new customers than to keep your existing ones. Old customers are already bought in to your service, maximise them.

5. Buy Well. Constantly review suppliers and prices, like costs a small amount can make a big difference.

6. Keep up with the Market. When your focus is almost totally on business survival, it’s easy to forget to watch industry developments, and how they can affect you.

7. Check out the Competition. Understand what they’re doing and how it affects you, ensure you are not left behind, watch for new ideas that you can replicate.

8. Review your own Products / Services. Do they need a full revamp, are there any gaps in your offering, or opportunities for new business?

9. Plan Well. Always keep the big picture in mind, whilst managing day-to-day trading. Ensure you work on the business as well as in it.

10. Finally, reduce the Tax Take. So often businesses don’t know of or don’t take advantage of all allowances. Take good professional advice.

Finally, remember, its “profit for show, and cash for dough”! Good housekeeping also starts with being selective in what business you take on, always avoid buying business just for volume, it’s more about achieving at least a decent margin.

Business Etiquette

Posted on by Mike Halls

We’re continuing this series of random blogs on matters that whilst not necessarily directly affecting business sales, nonetheless all combine to make up the ethos of a business, which is crucial to its attractiveness to a buyer. I this case, we look at business behaviour, or etiquette.

Business is all about people, and social customs and practices are probably as important as other factors in making business successful. But such etiquette is rarely talked in any formal sense, most businessmen rely both on instinct and picking things up along the way. Here are a few areas where the right approach can make a difference.

• Greetings – You only get a short time to make a good impression, so taking care of appearance, a friendly genuine greeting and handshake, proper eye contact and deference will go a long way.

• Small Talk – This can often be difficult especially with a stranger, take time to find common ground and show interest in them. Proper preparation always helps.

• Punctuality – Everybody is always busy with too much to do and too little time to do it, but punctuality is crucial. If one has to be late, always let them know. Equally, don’t arrive so early as to potentially cause a problem.

• Entertaining – Breakfast, lunch or dinner can be a good way to get to know somebody better in a more relaxed setting, but always ensure you pay your way and never ever get drunk.

• Devices – This is a modern problem, phones, tablets and so forth have impaired everyday servility by deflecting our attention from our companion. They should be turned off, put away or at the very least muted.

• Simple Thanks – Expressing your appreciation is actually a great art, which can involve effort. Keeping it simple and genuine is the key.

Of course, you can’t learn old fashioned charm, but you can learn good manners, and perhaps the open secret is the old adage, “treat people with respect and do to others as you would be done by”.

Emotional Executive Training

Posted on by Mike Halls

It’s tough running a small business, it’s a jungle out there as they say! This blog in our series of related SME business topics deals with a subject often ignored or indeed swept under the carpet……….emotional training for entrepreneurial business owners. It’s just a few simple thoughts on how to better deal with all those stresses and strains of business life.

1. Extinguish negative thoughts: It’s easy to get into a habit of negative thoughts, especially about small things. If this happens, interrupt with a positive thought, for example “it won’t last that long”.

2. Set and complete small goals: When large tasks seem daunting, break them down into small chunks, which are easier to manage and which completing produces essentially a feel good factor, leading to more.

3. Try to feel more positive than you actually do: Business is hard and there are always difficulties, and this can lead to self doubt. Think positively if only about small things, again this helps a positive train of thought.

4. Teach yourself to say “no”: Avoid pursuing unobtainable goals of perfection, which leads to negativity. Develop the confidence to say “no” and focus on achievable goals.

5. Understand your limitations: Often emotions are learned behaviour, and can simply become bad habits. Try to determine why you feel like you do about something, and then you can feel and express more positive feelings.

6. Resolve inner conflict: “The white nose of inner conflict is the enemy of peace”. Inner conflict often arises from untrue perceptions, say about the business, or your leadership. Think clinically about why you actually think that, often it’s based on some past issue. When you understand that, you can resolve it.

7. Ask how others see you: There is often a clear and incorrect difference between our self image and how others see us. Seek trusted opinions about how others really do see you, this is often a better person than the one we often look through.

8. Physically connect: In an increasingly virtual world we become necessarily disconnected. Old fashioned physical gestures, from eye contact, to hugging tap into our actual innate need to connect. Do more interaction, it’s very likely to be welcomed.

9. Be kind: Last and by no means least, an old truism but one often forgotten in the increasingly hectic world we live in – small voluntary acts of kindness bring as much happiness as they give to others. They help us rise up out of the murky depths of everyday life.

DOUBLE GLAZING MANUFACTURER AND INSTALLER Ref: 2820

A well-established, successful and profitable double glazing manufacturer and installer of windows, doors, conservatories and roofline products in the South East of England. The business has an excellent reputation with a high level of repeat custom. There are a number of in-store concessions in DIY stores. Experienced team of staff. Excellent known opportunities for growth. The business owns its factory and showroom premises. Turnover c.£3.8m with adjusted EBITDA of c.£287k.
Contact: Allan Knowles - Tel: 07867 382950 Email: a.knowles@beermerger.co.uk

Leadership

Posted on by Mike Halls

Continuing our series of Blogs on related topics for SME’s, we’re returning to a previous topic of some relevance to all businesses, whatever size or shape, but especially SMEs. That is Leadership.

Particularly recently there has been much comment from many sources on the importance of Leadership, in governments, public organisations, and large corporates. The attributes that make good leaders are no different for small business owners and, arguably, are even more important in that sector.

Here’s a list of the key points that have been shown to contribute to successful leadership.

1. Don’t expect immediate Results. Success doesn’t happen overnight, so don’t expect it to. Be flexible and patient as sometimes things get worse before they get better. Keep your eyes on the ultimate prize but celebrate milestones along the way.

2. Don’t dwell on the Past. Human nature is to resort to a comfort zone, particularly when times are difficult and the past can be an escape from the present or the future. Don’t romanticise or dramatise the past and make a plan in small steps to ensure you always move forward.

3. Don’t fear Failure. Failure can be painful and demoralising, but it’s not the problems that count but how you deal with them. Tenacity, obduracy and shear grit is all part of the mix. Failure doesn’t decrease your worth, dealt with properly it can add to it. So just learn from any failures and move on.

4. Learn from your Mistakes. In business mistakes are inevitable and part of the whole process. Understanding what caused those mistakes and a willingness and ability to embrace doing things differently will ensure new behaviour and no repetition.

5. Don’t shy away from Change. Circumstances can change quickly, and don’t under-estimate how difficult change can be. But change can be good so embrace it when required, break it down into small chunks to make it manageable.

6. Don’t obsess about things you can’t Control. You can’t control everything so don’t try. Instead try to influence things positively and practice acceptance of things you can’t influence. Free up time and energy to accomplish things within your control.

7. You can’t please everybody all the Time. We all want to be liked and respected but sometimes that means not pleasing somebody and simply doing the right thing. Don’t shy away from the right thing through fearing displeasure and don’t anticipate it.

8. Be willing to take calculated Risks. The key is to keep things in perspective. Try to assess risks logically and without emotion. Weigh up the costs against the benefits of any risk and assess how important the decision may be in the longer term. Don’t allow emotion or irrationality to affect your ability to take proper risks.

9. Don’t resent other people’s Successes. In today’s business world everybody is caught in a spiral of hyperactivity, always trying to keep up with or overtake others. Don’t. Avoid comparisons with others, measure your own growth instead. Be happy about and not resentful of other’s successes, they don’t affect your own. Focus on co-operation rather than competition.

10. The world doesn’t owe you Anything. The fact is good guys don’t necessarily come first, or even second or third. There’s always somebody better or worse than you, and always will be. The business world can be a harsh place so understand that and be comfortable with yourself and whatever you can achieve.

Finally, remember, you can’t be a leader without followers! So, take your people with you, communicate, inspire, suggest and cajole, so that your visions are shared.

Reviewing Your Business Strategy

Posted on by Mike Halls

All businesses should have some kind of strategic plan but putting that together is only the start. That plan must be a living, working document and be reviewed regularly and revised as appropriate. The main objective must always be to ensure you are continually building value in the business.

A successful review will gather information about and focus on the three key strategic questions: Where are we now; Where can we realistically go; and How do we get there?

The strategic issues which will help address those questions will include internal factors, external factors, competition, products & services, management & employees, sales & marketing and financial performance.

• Key questions will include: Is our vision on track; are we sufficiently competitive; do we have sufficient key differentiators; is the right management in place; and is our profit growth as planned?

• Key information to carry out this review will include: Review of past successes (and failures); current trends; market analysis; SWOT analysis; and key driving forces.

• The SWOT analysis (Strengths, Weaknesses, Opportunities and Threats) will review your structure, strategy, skills, staff and systems.

• Your review should be kept simple and focus on fundamental questions: what do we do; who do we do it for; how do we do it; how can we do it better; and what else can we do?

• Other key issues to be regularly reviewed will include: what products and services do we provide; should we/can we diversify; what are our key markets; are there new markets for us?

• Your review of the market and competition will need to question who has the power in the market, how strong is your customer’s bargaining position, the threat of new entrants to your market and the threat of substitutes/copies.

The above summary is only scratching the surface of a strategic review, and any such review will throw up as many questions as it answers. It will however enable you to plan ahead with at least a fuller understanding of your business, and to carry out in-depth and quality financial planning to underpin the strategic vision and objectives.

Customers are King!

Posted on by Mike Halls

Customers are the lifeblood of any business and should always have prime attention. Sounds obvious doesn’t it but it’s amazing how often this isn’t the case, and how easy it is to allow customer focus to slip. Here are ten “commandments” that have been proven to be important both in attracting and retaining customers.

1. First Impressions
Like it or not first impressions are absolutely vital. At a first meeting you probably have about a minute to make a good impression, so plan and prepare well.

2.Talk Normally
No jargon. No waffle. Just facts and straight talking. Listen and smile!

3. Pitch Reality
Don’t believe your own hype. Don’t pitch a fantasy. Pitch reality.

4. Always Deliver
If you say something, do it. Never promise anything you can’t deliver. Always deliver quality, reliability and consistency.

5. Keep in Touch
Always keep in touch with customers on a regular basis. Don’t let them feel neglected or forgotten and never make them have to chase you for anything.

6. Challenge your Assumptions
Constantly challenge your normal views, don’t fall into a rut. In particular, always see the other guy’s point of view.

7. Selling is Key
Everybody sells, in some way, whether officially a salesman or not. Make sure everyone knows what your key sales issues are.

8. Negotiate Well
Selling and negotiation are different. “Selling” is buying in principle. “Negotiation” is the detail. Sell first, then negotiate.

9. Price
Make price the smallest issue by showing measurable and tangible value.

10. Problems
It’s not the problems that are your problem; its how you deal with them. Acknowledge your failures. Be humble. Take the long view.

Remember customers always have a choice, so when you’ve got them, don’t take them for granted!

BOUTIQUE ARCHITECTURAL CONSULTANCY Ref: 2809

Well established business with a strong market position and reputation. Core business is architectural & technical design, and project management. Operates in both residential and commercial sectors across the UK.  Highly qualified and experienced team of professionals in place. Currently based in London.  T/O comfortably exceeds £600k with EBITDA exceeding £100k.
Contact: Lucy Roy - Tel: 01959 565191 Email: mjh@beermerger.com

Shareholders’ Agreements

Posted on by Mike Halls

Before our imminent series of Blogs on our core activity – private company sales, we’re taking a quick look at other relevant small business issues.

When setting up a new company, Shareholders’ agreements are fundamental. It’s easy to assume that nothing will go wrong between you and your business partners in the future, and you’ll probably feel that as you trust one another you don’t need to have a formal agreement. Indeed you may also feel that asking for one will seem as if you don’t trust or respect your partners.

Of course, hopefully nothing will go wrong. However, the harsh reality is that even family and best friends fall out and if the worst should happen, then it is vital to have a formal agreement prepared in advance as to how the situation will be dealt with.

Although most people will never need to rely on their agreement, experience regularly shows many instances where shareholders wish they had taken the time to put such an agreement in place, as its extremely difficult to reach any kind of agreement when there is a serious dispute.

By necessity this blog can only scratch the surface of this topic, but here are some key points.

• In the absence of a shareholders’ agreement the conduct of the company and its directors is as set out in the articles of association. These by their nature follow a standard format and are a blunt instrument which may not fully cover individual circumstances as necessary for each company.

• So what is a shareholders’ agreement? As the name suggests, this is a specific document which confirms the agreement reached between a company’s shareholders as to how their company should be run.

• A proper shareholders’ agreement ensures clarity of intention, and avoids unnecessary disputes in future, for instance where circumstances may have changed or where, with the passage of time, matters agreed originally may have become blurred.

• The agreement’s fundamental purpose is to identify from the outset those key issues which may arise in the future, to record the basis for original agreement, and to set out an agreed mechanism for how they will be dealt with.

• There will be a substantial number of common issues which may require inclusion.

• One matter typically dealt with is the exit strategy of the shareholders. This will cover the full exit through a sale of the business, and also the common situation where one or more shareholders wish to leave and others wish to remain.

• Directly connected with that is the issue of valuing the business, and of determining how the company’s shares will be valued, and thus to determine the value of each shareholder’s stake, and to define the way in which these must be sold.

• Finally, the agreement will also enable all shareholders to consider what should happen in the event of their untimely death or incapacitation, for the benefit of the company.

• A good shareholders’ agreement will facilitate smooth handling of any such issues, will avoid the need for costly litigation, and will save a huge waste of management time and emotion in dealing with what can all so easily otherwise become problem issues.

Very often a shareholders’ agreement is overlooked or deemed unnecessary, but it is never too late to prepare, or indeed amend an agreement. And as with all such documents, proper specialist advice is crucial.

Creating Business Value for the Small Business

Posted on by Mike Halls

In this series of Blogs, we’re looking at many practical aspects of a business that also have an effect on value. Creating and enhancing value in your business is always a key objective, especially where your ultimate aim is an eventual sale. It’s often hard for smaller businesses to do this, but there are many things you can “copy” from larger corporates about creating value. Here are just a few pointers:

• Value is measured tangibly, such as sales and profit, but also intangibly, such as through people, reputation and market differentiation.

• For tangible value, ensure sustainable revenue growth, returns at good margins, and a well controlled cost structure.

• For intangible value, ensure you have the right infrastructure and people to deliver that value, and the strategic and market position on which to continue to build a sustainable business.

• Although often a less attractive subject, attention to costs is paramount. Value can often be enhanced as much by attention to costs as through increased business. Attention to costs should be a permanent focus.

• Clinically assess the allocation of financial resources in the business. Check that those resources properly reflect your key business priorities. Try to ensure that the longer term cost structure is focused and sustainable.

• Focus always on margin and return, rather than volume. Avoid “buying” new business at unsustainable margins.

• Ensure you have a clear plan for creating value from your business strategy. Understand and focus on what really drives your business.

• Have a clear strategy for identifying and capturing new business. Identify what the key factors are, and ensure resources are properly allocated to that key objective.

• Business process is also important. Key value–adding processes should be optimised through efficient allocation of resources. Non value–producing processes should be simplified, such as reducing time–consuming processes.

• Finally, ultimately it is the people within your business that represent and maintain it’s value, and creating and sustaining the best team you possibly can is of at least equal importance.

The above points may seem obvious, but the reality of running a small business often means that an owner becomes sucked into working “in” rather than “on” the business. Try always to “step back” and see the wider picture, or to continually question historic and embedded processes.

Business Plans for SME’s

Posted on by Mike Halls

Your business plan can be for your own use and guidance, or can be for external use to seek support from others. Either way, a good business plan outlines your business strategy, what you need to do to achieve your goals, helps you think through your options identifying the best opportunities, and helps convince banks, investors and other key contacts to support you.

So, it’s crucial to remember your target audience and to be clear about what the business plan is seeking to achieve. This is by necessity a very brief guide, but here are ten key points to help.

1. Keep it simple and clear, don’t overcomplicate or lapse into jargon.

2. You must have a clear and convincing executive summary. Too often the key points are buried deep in the plan.

3. State clearly what you need, what it’s for and why it will be successful.

4. Show how past performance supports your plans.

5. Explain growth prospects, and support by market research, don’t just make unsupported assertions.

6. Expand on your marketing strategy and sales process, prove that you know who your customers will be and why these customers will buy from you.

7. Show why you have sufficient competitive differentiation by identifying barriers to entry and competitive advantage.

8. Identify the management and support team, show their skills and ability to deliver the plan.

9. Prove you have thought it all through properly by providing a full risk analysis, considering the things that can go wrong and how you would deal with them.

10. You must produce credible and robust financial forecasts, plans, cashflows and “what if” projections, and support with appropriate accounts or other documents.

This is only the briefest guide, but simplicity is key. Keep your business plan simple and concise. Don’t get tied up in tautology, and try to show your passion for the business, but stay believable.

Website Marketing for SME’s

Posted on by Mike Halls

Not so long ago viewed as simply a necessary evil, websites and website marketing are increasingly important, particularly in the SME market. Despite this, it’s quite surprising how many small business websites are incomplete, “under construction”, or permanently out-of-date.

Not only are websites very often the first thing that a potential client sees about your business, but increasingly potential customers are viewing websites on a range of devices which they can also use to contact you with. As a small business you need to make this easy for them. Here are some tips.

• Visitors to your site will come as a result of a web search, sometimes in response to marketing you have undertaken or to find out more about your business prior to contacting or meeting you.

• Your website therefore needs to be read easily no matter what device potential customers may be using. More people are now viewing websites on mobile devices than on desktop computers.

• A responsive website adapts the screen size, format, navigation and in some cases content, to suit the size of device for each visitor it brings in.

• Google recently announced that “mobile friendliness” will have a clear impact on their search results, so that if your website does not cater for mobile visitors, this will affect your search rankings.

• Bear in mind that over 90% of Google traffic is generated from websites listed on page 1 of Google searches. Looking to page 2 means website traffic drops very significantly.

• What this means is that if visitors cannot navigate easily to the page they want on your website, they are likely to click straight off and onto another website potentially of a competitor.

• Having adapted your content accordingly, and made your website as responsive as possible to all devices, this maximises the potential for customers to contact you easily. A simple piece of code can enable visitors to “click to call” your business.

Whilst the above points are pretty basic and in themselves not particularly complex, as with all such specialist activity, this is best carried out by a specialist firm to ensure that you get it right, the cost of which will pay dividends in the long run.

Social Media for Business

Posted on by Mike Halls

In 2019 social media continues to be a growing part of any businesses marketing. More and more people are joining social media sites, and your business should take advantage of this.

The aim of social media is to encourage engagement from the right audience and for them to interact with your brand to turn this into increased revenue.

Each platform will have a different use and a different audience. It is important to analyse what would work best for the type of business you have, before just doing it!

It is also important to tie in social media with your business aims and an objective so that it has a clear goal. You can do this through quantifying results and measuring through analytics tools etc.

Listed below are just five social media platforms and some suggestions for basic tactics for your business:

1. Facebook – probably the best known of all social media sites, albeit originally principally aimed at personal use for family and friends.
• Create a separate Facebook page for your business (away from your social activity).
• Encourage current clients/customers to “like” your page.
• Ensure you tag other businesses and clients when talking about them, working in collaboration promotes their business.
• Ask customers/clients to “comment” or “like” at the end of a post.
• A good way to grab someone’s attention is a picture or a video, so add one in your next newsfeed.
• Advertise to increase the reach and therefore the audience size.

2. Twitter – with over 500 million Tweets being sent each day, hundreds of millions of people are exploring links, articles, retweets and trends.
• Twitter is a great marketing tool. Follow your customers and get them to follow you.
• Add hashtags (#) before key words so anyone who does a search for that hashtag may find your Tweet.
• Frequent activity, such as tweeting and re-tweeting will help grow your audience, but remember to be concise with the messages you are putting across.
• Don’t forget to add a photo, people respond more to images.
• If you are sharing information make sure it contains quality information and only post if it’s useful, funny or inspirational.
• Always tweet politely and positively, negative tweets don’t get good press.

3. LinkedIn – is a professional rather than a social network and most used networking tool for professionals (both employers and potential employees) and businesses.
• ¬So who should you connect with? Fifty is minimum number of contacts required for a successful LinkedIn profile. Make sure you do your research before connecting.
• To bring vivacity to your business page, make sure you include the company’s logo and a cover image.
• Share engaging news and post daily company updates, this has been proven the most effective way to start a conversation and engage directly with your target audience.
• It is a good platform for both individuals and businesses alike to market themselves and expand their network.

4. Instagram – from major brands to local, family-run shops, businesses around the world are driving proven results with Instagram.
• Instagram is currently the fastest growing media platform at the moment so this is where businesses are putting their marketing efforts.
• Instagram can heighten your business in depictions. Like Twitter, using hashtags is a great way to help other users find your content on Instagram.
• If launching a new service or product, generate interest by displaying new images.
• Businesses have the option to advertise on Instagram so be creative!
• Be consistent with your Instagram posts and respond to user’s comments.

5. Pinterest – Pinterest is a pictorial social media platform that’s like a digital scrapbook combined with an online wish list.
• Make sure you know what is trending on Pinterest this can help you decide what content to pin, if it is relevant and relates to your business it would be a good time to find and share the same content that can relate back to your business.
• The more you can relate trending topics back to your brand; you can make your business more discoverable on Pinterest.
• Don’t forget to add the “Pin It” button to your Website.

Clearly, there are more social network platforms and not all social networks will suit every business but with so many being used now on a global basis by millions and millions, it is really essential these days that companies embrace the technology in some form or another to promote their businesses.

Marketing for Entrepreneurial Businesses

Posted on by Mike Halls

Marketing and Sales are actually two very different activities, although they are often confused.

Marketing is all activity through which the visibility and profile of your business is increased. It forms the backcloth to and support for sales activity.

There are many marketing avenues, including website marketing, literature, advertising, PR and direct marketing, and of course these days, social media.

Here are ten “commandments” that historically have been proven to be useful in maintaining effective marketing:

1. Your Strategy – However informal, you must have at least a plan. Otherwise it’s just a random approach which rarely works well.

2. Know your Market – Part of that strategy will be a clear picture of what your key markets are, and a full understanding of how they work.

3. Maintain your Identity – If you have a brand, guard it jealously. It’s a potential jewel. Promote it vigorously. If you don’t have a brand, try and develop one. Many aspects can be important, even if they’re informal, such as a recognisable identity, or a niche market position.

4. Be Recognisable – Part of your strategy should be to create and maintain a recognisable identity. This incorporates many things, but don’t reject things because they seem too obvious, such as logos or strap lines; much marketing activity is essentially doing the basics well.

5. Be Visible – Make yourself easy to find. Don’t hide from view! Think carefully about how your target customers will hear about you.

6. Plant Seeds – Marketing is about planting seeds and helping them germinate. Take the long view.

7. Make their Decision Easy – Continually question why your customers would buy from you? What’s in it for them? What would you want in their position?

8. Invest in Others – Sometimes the low road is as good as the high road. Invest time in others, they will remember you.

9. Make Friends – Contacts are crucial. Make friends with everybody and keep in touch. Collaborate with your competitors. You don’t have to be deadly enemies. You never know where your next job is coming from.

10. Constantly Review – Don’t just carry out your marketing initiatives and then sit back, it’s a constant battle! Continue reviewing how things work and amend your approach as you go along.

Strategic Reviews for the Entrepreneurial Business

Posted on by Mike Halls

It’s all very well having a great strategic plan, if it then sits in a drawer gathering dust. As an entrepreneur you must review your business regularly, and the plan is there as a tool to help do that. The main objective must always be to ensure you are continually building value in the business.

A successful review will gather information about and focus on the three key strategic questions: Where are we now; Where can we realistically go; and How do we get there?

The strategic issues which will help address those questions will include internal factors, external factors, competition, products & services, management & employees, sales & marketing and financial performance.

• Key questions will include: Is our vision on track; are we sufficiently competitive; do we have sufficient key differentiators; is the right management in place; and is our profit growth as planned?

• Key information to carry out this review will include: Review of past successes (and failures); current trends; market analysis; SWOT analysis; and key driving forces.

• The SWOT analysis (Strengths, Weaknesses, Opportunities and Threats) will review your structure, strategy, skills, staff and systems.

• Your review should be kept simple and focus on fundamental questions: what do we do; who do we do it for; how do we do it; how can we do it better; and what else can we do?

• Other key issues to be regularly reviewed will include: what products and services do we provide; should we/can we diversify; what are our key markets; are there new markets for us?

• Your review of the market and competition will need to question who has the power in the market, how strong is your customer’s bargaining position, the threat of new entrants to your market and the threat of substitutes/copies.

You know the old adage…..if you fail to plan, you plan to fail! Sometimes such clichés really are true.

The above summary is only scratching the surface of a strategic review, and any such review will throw up as many questions as it answers. It will however enable you to plan ahead with at least a fuller understanding of your business, and to carry out in-depth and quality financial planning to underpin the strategic vision and objectives.

Strategic Planning for the Entrepreneurial Business

Posted on by Mike Halls

As a budding entrepreneur, having developed your idea which has now become reality, one key thing in putting it into practice is to develop some kind of strategic plan. This may sound too grandiose particularly for a smaller and embryonic business, but it isn’t.

All businesses of whatever size and type should have some kind of plan, as a structure to work within. It must be a living, working document and be reviewed regularly and revised as appropriate.

The plan should combine strategic thinking and sheer practicalities. Try to make visions reality through a positive yet pragmatic and above all realistic approach. Here are our top ten tips for an effective strategic plan.

1. Review your Strengths and Weaknesses

Firstly, think clinically about your businesses strengths and weaknesses, and define known opportunities, as well as the threats to further progress. Such a “SWOT” analysis will help you to plan effectively.

2. Review your Vision

Before getting into details, review the original vision. Are your goals still relevant and achievable? Have external or internal circumstances changed?

3. Develop the Plan

Once the goals are set, use the SWOT analysis as a basis for determining what is possible, and how to make it so. Make realistic assumptions based on experience, your evaluation of the business, the market and other factors. Set clear goals and prioritise the various elements into a clear plan of action. A good business plan is as much about the process as the final document.

4. What are the Strategic Considerations?

Don’t assume that something new or radical must be required. Quite often what is really needed is to find a better way of doing what is being done now. And if it’s not broke, don’t fix it!

5. Remember the Key Objectives

Always keep the key objectives in mind, don’t be deflected. Remember another old adage, “sales for show, profit for dough”. If expansion is planned, it should increase profits, otherwise what is the point? Think through the risks and the costs of failure as well as the rewards of success.

6. Make it a Practical Document

There is no prescriptive length, it will depend on each individual business, but if it’s more than 20 pages it will almost certainly be too long. Make sure it is realistic, most business plans are overly-optimistic.

7. Create a Budget

In the real world all visions need money to succeed. Using the key assumptions, think through likely results, financial returns, timescales, and costs to ensure the plan is at least workable and achievable. Regularly monitor the actual results against budget, and discuss and agree any necessary action.

8. Assess Resources

In setting goals and the budget, ensure you have all the necessary resources to support the plan. It isn’t just finance, but staffing, the necessary expertise, and practical resources such as capability, time and infrastructure.

9. Share the Plan

You can’t do everything yourself. Your job is to have the vision, create the plan and lead the team in achieving it. So firstly share the plan with the key people, and take and use their input before finalising it. Think how you will involve others, and make it clear who is responsible for doing what.

10. Make sure it’s a Living Thing

Finally, once completed, don’t file it away never to be seen again. Review and amend it regularly, and discuss it with key staff. Be prepared to amend the plan if necessary several times if it really isn’t working, or indeed if it is!

More on business reviews in forthcoming blogs.

In praise of Entrepreneurs

Posted on by Mike Halls

Firstly, a Happy New Year to all, 2019 promises to be an interesting one at the very least, and we wish everyone a successful and prosperous year.

For our first blog of the year – and particularly in this imminent pre – Brexit climate, we focus on the role of the entrepreneur. Much continues to be made of the importance of the private sector, and SME’s in particular in driving the economy forward, which brings the role of entrepreneurs into clear focus.

Entrepreneurs are the anarchists of the business world, whose mission is to challenge the existing order. In many walks of life – politics and the public services for example, a belief in hierarchy, certainty and risk aversion dominates.

Corporatism encourages people to think that change is unnecessary and resistable. Managers can believe too much in plans and budgets, and increasing regulation and bureaucracy just make organisations less adaptable and, like insurance, can foster complacency.

Entrepreneurship is the antithesis of this. To start a business, launch new products or enter fresh markets requires the ability to embrace insecurity in an attempt to forge the future. The very nature of entrepreneurship is that it is unpredictable and hard to categorise, yet without it there would be no enterprises to generate wealth, jobs and taxes.

Creativity flourishes better inside small, hungry companies – before they become cumbersome and suffocated by office politics and red tape. Invention thrives outside rigid structures and cautious environments, yet these are the hallmarks of many organisations. The essence of entrepreneurship should be celebrated because it cannot be pigeon-holed.

Every entrepreneur is a disruptor and a libertarian – even if they might not describe themselves as such. Many of the finest entrepreneurs are happy to stand against the crowd, resisting the groupthink. Working on your own, or at least outside big entities, permits revolutionary ideas to foment – ideas that would be killed at birth inside the cosy corporate womb.

Capitalism succeeds because millions of people want to control their destinies and enjoy the freedom of running their own businesses. In every nation, if the state sets a sensible framework and gets out of the way, the armies of entrepreneurs will be unleashed to the betterment of all. Political party leadership often does not sufficiently understand the power of markets, incentives, competition, trade, choice and innovation, not least because many have simply not been there.

Entrepreneurship is a vital yet haphazard part of humanity, which can never be replaced by artificial intelligence. No machine will ever replicate the ingenuity and drive of the wealth creators.

So You want to be an Entrepreneur?

Posted on by Mike Halls

Our second blog of the year continues the initial theme, entrepreneurship, and offers some home truths about starting your own business.

It could be said that starting a business is asking for trouble, because one way or another trouble will surely find every entrepreneur at some time. So if you’re not resilient by nature, don’t apply for the job!

Be it bad debts, supplier disputes, employee troubles, equipment malfunctions or a host of other problems, running a business is a series of trials and tribulations to test even the most optimistic of entrepreneurs. Patience and stamina are prerequisites, along with the ability to cope with all setbacks and disappointments.

None of these challenges will be highlighted in any business plan, indeed, they are rarely mentioned at all. They are, however, the very warp and weft of an entrepreneurial life, and these crises cannot be delegated or ignored. If you are the owner and chief executive and MD and FD then you must roll up your sleeves and overcome all difficulties.

A quick win is also rare, almost every worthwhile enterprise takes at least five years to develop – and up to a ten year marathon is not unusual. Having the confidence and spirit to push ahead, despite losses, errors, difficulties and traumas is a prerequisite for those who want to be entrepreneurs.

Sales and profits come slowly and painfully, most things are much harder and take longer than you first imagined. Innovation is especially fraught, but trouble can be a stimulant, it demands action, and it is the riskier stuff that provides the most excitement, and the greatest rewards.

To deal with all this, all entrepreneurs must be mentally fit, as pressures can push founders to breakdowns or even suicide, yet for most entrepreneurs the attitude is almost always that it is better to have tried and failed than never tried at all.

Of course, there are great moments of achievement and victory, and plenty of fun and satisfaction to be had from being your own boss. You have the pride of ownership and the creative delight of building something meaningful, generating employment and making customers happy. There is something intense about the commitment, and all the risky stuff provides the most excitement and the greatest rewards and as your own boss you have a sense of purpose, and direction.

It might be that if budding entrepreneurs really knew at the start of their journey what trials lay in store, none of them would ever start, but that said entrepreneurs are innately creative, often idiosyncratic and arguably maverick types, possessing unshakeable belief and hunger, and imbued with a perennial can – do mentality.

PRIVATELY OWNED TRADING BUSINESSES SOUGHT Ref: 4889

Preferably Light Manufacturing or Distribution. Turnover between £3m - £7m. EBITDA between £300k and £1m. Preferably Southern UK based. Should have some management continuation.
Contact: Lucy Roy - Tel: 01959 565191 Email: mjh@beermerger.com

SME BUSINESS REQUIRED IN NORTH WEST UK Ref: 4502

Serious trade buyers are seeking a bolt on acquisition to their existing business. Preferably Shropshire, Staffordshire or close by, but location must be in the North West region. Agricultural related business are preferable, but manufacturing / industrial businesses also considered. Key requirement is good second – line or support management. Businesses must be stable and profitable and with growth potential. Fully funded, size broadly up to £1m in value.
Contact: Lucy Roy - Tel: 01959 565191 Email: mjh@beermerger.com

Mike Halls ACIB.CF (Managing Director)

After twenty-five years with Barclays Bank, latterly as Senior Corporate Manager in London, Mike moved into corporate finance, initially with an independent corporate finance house, and subsequently with a European investment bank. Mike formed his own business consultancy in 1997, which merged with Beer & Partners’ M&A operations to form Beer Mergers Limited in 1999. Mike was one of the first advisers to receive the “CF” qualification from the ICAEW Corporate Finance Faculty in 2007.

Miki Dan (Regional Director – Head Office)

Miki is a very experienced investment banker and M&A practitioner, with extensive cross-border advisory experience, and a particular specialisation in industrial services sectors including oil and gas, automotive, manufacturing and global aerospace businesses. Miki is an experienced transatlantic and European mid-market deal maker, having worked on transactions for both public and private clients in the UK, US and Europe. Miki joined Beer Mergers in 2014 to focus on the industrial sector.

Melinda Harvey (PA)

Melinda spent several years as a senior PA / Secretary before leaving to concentrate on family commitments. Melinda returned to work with Beer Mergers in 2000 and runs the office on a daily basis, handling all administration and related work.

Lucy Roy (Operations Manager)

Lucy started her career in retail banking at the Halifax before moving into the City and working for a number of Investment Banks.  Her final move was to a Hedge Fund, GLG Partners, for whom she worked for over 10 years, prior to taking a break to concentrate on her young family. Lucy joined Beer Mergers in 2018 as Marketing Manager at our Head Office in Kent.


The remainder of our team comprises:

Allan Knowles (Regional Director – South East)

Allan is an experienced entrepreneur, investor and businessman, with a varied career including sales, marketing, qualititative market research and IT experience. As well as forming his own successful specialist consultancy business, Allan worked with Business Link in London assisting SME businesses with a wide range of issues including growth, finance, and business sales. Allan joined Beer Mergers in 2011 to bring those skills and experience to our South East Region.

Andrew Burton (Regional Director – Thames Valley)

As an entrepreneur who has personally successfully co-founded, developed and then sold a number of businesses over the last 30 years, Andrew brings a wealth of direct, first hand business sales experience to the Beer Mergers team, with a deep understanding both for the emotional and practical elements of selling a business.   

Andrew Wilson (Regional Director – Northern Region)

A Graduate of Manchester Business School, Andrew worked for some years in International Banking in London. This was followed by twenty five years as a founder and Director of a family owned SME in the manufacturing sector. Andrew has been Regional Director based in Yorkshire for Beer Mergers for approaching ten years, and runs the whole of our Northern region. Andrew has successfully negotiated many sales and acquisitions across a broad variety of industry sectors.

John Humphrey (Regional Director – South)

John is a very experienced businessman, M&A and Sales professional with a background of Management, Key Account Management and New Business Sales.  He has very successfully started and run his own business and has extensive experience advising businesses on successful strategies across multiple disciplines. John joined the Beer Mergers Team in 2020 and brings his wealth of experience to the South Region.

Colin Harvey (Regional Director – South West)

Colin is a vastly experienced M&A practitioner with over 20 years in Corporate Finance, gained in a number of firms, with a particular specialism in the smaller, owner–managed business. Colin joined Beer Mergers in 2014 to assist in our expansion, particularly in the South West, where he has a wealth of contacts and knowledge of the market.

Alec Noakes ACIB (Consultant)

Posted on by Beer Mergers

Alec spent 30 years with Barclays Bank Plc in a variety of roles within London, West End and latterly as a Finance Manager within International Operations. He left Barclays in 2002 and joined Beer Mergers as Office Manager where he provided executive support to the whole team and was involved in all transactions.  From 2019, Alec has scaled down his involvement but continues to provide consultancy support to the firm on an adhoc basis.

Lynda Collingwood ACMA (Research Consultant)

A qualified ACMA, with fourteen years’ experience in various accounting roles including Shell, Intel and Hertz, before moving into private banking and investment management initially with Lloyds Bank Plc and latterly with a Private European bank. Lynda subsequently formed her own specialist finance consultancy and has been with Beer Mergers from the outset, working alongside the main team on specialist work on a consultancy basis.

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Email: mail@beermerger.com | Telephone: 01959 565191 | © 2014 Beer Mergers Limited