Selling for success Business broker Mark Mills is a serial entrepreneur and claims to be able to sell any business for a profit. Here he tells us why a favourable tax regime means there has never been a better time for business owners to sell up and enjoy the fruits of their labour.
Building up your own business is about so much more
get a business ready for sale. Mark explains that most
than the investment of cold hard cash, few things will
companies he deals with will be able to identify a sector or
ever take up as much of your time or weigh as heavily on
division of their business that, if it were run as a separate
your mind. So making the decision to sell your business is
company, would be hugely profitable.
perhaps one of the most difficult you will ever make. Mark Mills has gone through this process five times and
“One company I sold had a sales force of about 500 called Tactical Solutions that had a very good system for
founded Comerga Consulting in 2011 to use his experience
product recall, which is obviously very relevant in light of the
to broker the sale of businesses. He helps a business
horsemeat scandal, so we designed a website for it and
increase its profitability before launching the sale process
started generating business through that because basically
and believes there have never been better conditions to sell
they had 500 people on the road calling in on supermarkets
your business.
and convenience stores and they’d never told anybody
“We’re in a very, very good tax regime for selling a
that they did it and it was a great piece of business, so we
company as opposed to earning an income from it
publicised it, ramped that part of the business up and it was
because the highest rate of tax is 45 percent, but you can
very profitable because it was all incremental income.”
sell your business for £20million, if you’ve structured it
Mills has a very specific process that he applies when
correctly with your wife, husband or partner, and get out
working with a business with a view to selling it, he explains:
at 10 percent. So you can sell it for £20million and keep
“What most advisors do is try and give advice from the
£18million.” He said.
outside whereas I tend to go in, become a non-exec
“So it’s a really good time – until probably the election in
director and do what I call tidying up, then improvement
May 2015 – I think it will probably change whoever gets
and then the [selling] process whereas most people selling
in. So this is a very good window for people to sell their
launch a process then realise the need to do the tidying
business and typically it takes 12 months, that’s why I’m
up and improvement and they’ve got it all the wrong way
pushing now, even if they don’t do it with me they should
round and you’re doing it in front of an audience of advisors
think about selling if they’ve got a sellable business.”
and buyers. Doing it my way tends to make things go more
Mills believes whoever gets into power at the next general election will raise the level of Capital Gains Tax as a revenue raiser.
smoothly and you get more for it. “It works really well because if you follow that strategy you can build value before you tell anybody and also you can be
“I think we might see them go up to 28 percent, not the
more careful with the information that goes out, because
heady days of 40 percent. If we get a socialist government
another big mistake people make is information goes out
in then they historically have it at 40 percent. I really think
to lots of different people, in lots of different forms and you
that in May 2015, whoever gets in, they will look at it and
end up with a protracted, fractured process that normally
think that is an easy tax to put up. It’s not a vote loser
ends up without a sale and they get disillusioned with the
because it only effects people who are going to sell their
whole thing and usually just end up continuing running their
business but the take on it is very good because it’s big
business. Most business owners are very good at running
lumps of capital.”
their businesses but they’ve never sold it.”
Mills began his business career early, describing himself as “one of those annoying people at school selling anything that moved for profit”, before working with businesses
Rather than selling out to competitors Mills has found that many of the sales he brokers are with private equity clients. “The city, London in particular, is awash with cash
including Halstall Toys International, Tactical Solutions and
because the private equity guys have all made their money,
Card Point Plc.
we’ve been through the recession in their life cycle. So lots
“I had a couple of bumpy starts where I didn’t make much
of them have either got spare cash from having raised it
money but then I came up with an idea for postboxes in
five or six years ago and/or they’ve raised additional funds
petrol stations with advertising that went really well and
because those guys have done really well in the recession
I sold it to More O’Ferrall Adshel, then I sold it for them to
because they tend to concentrate on things like cash
Royal Mail so I cut my teeth on selling the same business
generation. So at the moment most of the buyers are in
twice because I realised it had what I call a hidden value,
London, it’s the private equity houses, to some degree
so it had the value of the advertising but once we’d put up
competitors, but more likely trade where they’re looking
1,200 postboxes I realised that the intrinsic value was in the
for strategic purchases. One rich vein is listed companies
post we were collecting because it was at a time when the
who’ve generated cash and are now looking to bulk up
Royal Mail was supposed to be privatised.”
because during the recession they’ve hunkered down,
Finding this hidden value in a business is just one stage of Mills’ ‘process’, the series of steps he takes to
stuck to their knitting and are saying now we can expand because they’ve got spare capital.”
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