Business advisers and brokers are right on the front line of business exits; what can we learn from their experience and how they work?

In studying the motivations of entrepreneurs who want to exit their businesses, we look at academic reference materials, business manuals (to an extent) and entrepreneurs themselves. The people with the most hands-on experience are those working as business advisers and brokers, who are likely to be working with a number of would-be-business owners who want to exit at any one time.

We spoke to one such, Mark Oxenham, of Oxenham Associates this week to see what his front line experience looks like.

A business adviser, Mark has been helping entrepreneurs sell their businesses for many years and sees a number of reasons for business exits: “Of the three companies I am currently looking at selling for clients, one owner is selling to free her time to start a family, another is in the process of emigrating to Australia, and a third has been made an unexpectedly generous offer by a client who will retain him in the business after the sale has completed,” he explained. “However, motivation to sell is just the first of very many steps to a successful exit.”

As Simon Kidney from Exit Motivations has previously touched on, Mark’s experience is also that the motivation to exit can turn out to be more conditional than the entrepreneur might expect when they first explore how a sale might work for them. Simon’s view that the seller may have a very specific view of how the future of the business being sold may or should look.

Mark agreed: “In selling a company, it’s important to ensure that the purchaser is a good fit for it – not only does this smooth the sale process but can also protect the elements of a business the entrepreneur feels strongly about,” continuing “This might be the management team, the family name or any number of factors.”

How much does this matter? “For some, it’s everything,” Simon thinks. “When you’ve spent a chunk of your life pouring everything you’ve got into shaping and growing a business, the thought of someone else coming in and changing things can be off-putting to the point where it may scuttle a decision to sell.”

So hand-holding is an important part of the process? “Indeed it is, setting expectations, confirming commitment to the process, understanding what will make a business an attractive purchase, what questions are likely to arise through due diligence, as well as the likely outcomes, must all be carefully covered with the seller to make sure a sale is the right thing for them at that specific time.”

What does a successful sale look like? For Mark it’s the journey as well as the outcome: “The better prepared a business owner is with the right management and financial information, the quicker and less stressful the process for seller, buyer – and advisers like myself!”

Both Simon and Mark agree that the entrepreneurial landscape has changed since the financial crisis of 2008 and the covid pandemic. We will explore this and its impact on business owners wanting to sell in our next blog.

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