Ready to sell your business? In this environment?
A number of business owners are ready to move on, but the last couple of years have been extremely tough going, and it seems like there’s worse to come!
The economy is in turmoil, inflation’s up, the government moves are reactive (that’s putting it lightly), supply chain issues, staff shortages. Sales are fluctuating. Profitability is decreasing.
Uncertainty everywhere. A dilemma.
Can you still exit successfully in this economic climate?
Yes you can! Here’s an example.
Power Tools and Servicing Tauranga – Case Study
Graeme Meicklejohn from Power Tools and Servicing Tauranga was considering his options for exit and then Covid came along. He’d been in the business for more than 30 years, and considered it was time to get out. Things to do, places to see.
He had previously tried to sell his business but felt he could not get enough for it. Issues around stock values, and lack of modern systems in place.
He then refocussed his goal to improve the business systems and processes and then aim to sell in 2-3 years time. He hired a manager to help him implement and with some assistance from his wife Jade, started on the path of business improvement.
It definitely was not smooth going and they hit some road blocks in the implementation. The management team were also not totally in agreeance on direction of the company, on the improvement projects, priorities and timeframes. The manager did not feel totally supported in her plans and efforts, and the business started to wobble and being at risk of stalling in the middle of the improvements.
That’s when I was invited to come on board to assist. I was engaged to work with the owners and staff, support the manager as we implemented the changes, and prepare the business for sale.
The plan was to improve the business so that it was more profitable and also had modern systems and processes in place, so that it was a better proposition for sale and would achieve a higher price. This would keep the options open: keep it, or sell it within the next 2-3 years. We worked on the basis of a going concern, and aimed for continuous improvement.
As an aside it is worthwhile noting that over the first year that we worked together, we improved the turnover with 10% and improved profitability with 40%. This is while we were implementing major change projects (with associated extra labour costs and investment) and while coping with the Covid retail environment.
A sale was not a sure thing at all till very late in the piece. This meant that everyone needed to keep going and staff could not be told.
The business was successfully sold at the end of that year to the previous manager. A win/win situation.
I’m still working with Stacey, the new business owner, further implementing the business plan to set up powerfully for further growth and increased profitability. Graeme is still contracting to the business, as part of a facilitated hand-over. Things are ticking along nicely.
What did it take?
It took something, a lot actually, of everyone involved. It was not easy.
Here’s part of a recent testimonial: “It’s not easy to admit that we might need some external help when the formula for success is actually simple. Without Douwe’s ability to empathise and tap into my husband’s world and way of doing things the outcome would be very different and likely this letter wouldn’t exist.
Douwe not only knew where we were and needed to be but he mapped out how to get there.
We also were taken through a series of steps to examine ourselves as people. This process was known as “Be Bold”. To be bold, when I think of it now that we are farther down our business journey, is to have the courage to be real with ourselves about who and where we are and where we feel we could be. No one else tells us what we ought to be. It’s built in but it’s not until we have a special person walking with us that we are inclined to be brave and look at ourselves. Douwe did this for us. Unrelentingly. Patiently. Professionally.
We went from having an unsaleable business to selling our business for a reasonable price with minimal fuss within a year.
It wasn’t always easy to come to Thursday’s meetings when we had to front up and be accountable for the promises we had made the week before.
Some weeks I wanted to slope off to the pub but having Douwe on our side made that difference and made sense of why we were pushing for change and striving not just for better but for a great result.
If you know you need a push to get the tough going then Douwe is the tough who will get you going. if you have Douwe on your team you’ll know where you stand and there won’t be a mystery about what needs to happen.
Please feel free to contact me for a chat about our journey – Jade Meicklejohn”