The business owners had set the business up and run it for 21 yearsearning themselves an enviable reputation in the process.

They had both grown tired of the day-to-day and wanted to take a step back in order to pursue other projects

They were unsure whether to sell and exit altogether or to retain a minority stake and continue for a few more years in some capacity.

However, after a period of rapid growth there were a number of things that they had to address in order to maximise the value of the business and appeal to a potential buyer:

• The Balance Sheet was untidy and contained debts that would inevitably reduce the valuation of the business
• None of the business processes were documented
• There was no management team in place - the business was wholely reliant on the 2 owners
• Financial reporting was non-existent. When I initially met with the owners management accounts had'nt been produced for over 11 months, debtors were never reviewed & no cash flow forecasts were being routinely produced for the owners
• To make matters worse the business operated 3 key software solutions all of which were cumbersome to use. None of the systems linked to each other and therefore there was a lot of duplication of data

The combined effect of the above meant that the business wasn't as attractive to sellers as it should be.

How I Helped Them

Over a period of a few months we worked together to put in the key improvements required, including:

• Robust financial reporting put in place with monthly precdures & deadlines
• Weekly 12 week cash flow forecasting reviews
• Weekly debtor reviews
• Recruited a GM with sector experience into the business, along with a Financial Controller
• Introduced a single software solution with 1 central data repository
• Plan put in place to reduce long term loans on the Balance Sheet

The business is now in the process of being sold and I have introduced 5 potential buyers to them

Do you need some help too? Book a call today

One acquisition that I recently made was an accounting business base din Yorkshire.

The owner, 63 was looking to retire and pursue interests away form the office that he had never had the chance to do as he was always so busy working in his business.

He had founded the company back in 2002.

With a good team in place and fairly robust (albeit manual) business processes the business had a good reputation in the market and had over 480 clients with average fees of £1,100.

The key to this deal is that the seller and I 'hit it off' from day one. I shared with him my vision for the business and how I would look to grow it once acquired.

We met a number of times and completed the deal during 2023.

How I Have Added Value Since Acquisition

Post acquisition I have started to get to know my new team and gained a better understanding of existing systems and processes.

Certain areas of the business are inefficient and some practises (such as holding client records in rooms which could be utilised a additional offices) are currently being addressed.

Other areas where we are now growing and improving the efficiency of the business include:

• Reviewing all clients and grading them
• Increasing the number of clients who pay every month va Direct Debit
• Introducition of a new a practise management solution
• Focussing on one online accounting solution rather than the 4 that they were using (historically this has been client-driven)
• Introduction of new business advisory services including M&A support, business turnaround support and advanced client reporting
• Introduction of consistent lead-generating marketing strategies in addition to the traditional accounting approach of accepting word of mouth referrals
• Increasing the social media presence of the business including the revamping of the existing business website

I fully expect that we can grow the turnover of this business by 20% during the current financial year.

The profitability target over the next 5 years is to increase EBITDA from 24% (when I acquired it) to 36% once we have made the required changes to the business and introduced all of the planned business advisory services.

As part of this deal the seller will benefit from any uplift in the profitability of the business which could effectively increase the multiple on the deal to 1.35x

If you are thinking of selling your business and you think that you would like to benefit in the same way then I would love to have a conversation with you.

Contact me today and let's set up a call.