What to do with your Business

I want to talk to you about what to do with your business. You might have a business that is an accounting firm, you might be an FMCG, or you might manufacture and sell widgets. The numerous lockdowns have given us time to reflect on what we want out of life and our future plans and aspirations, both for business and personally. I have personally seen a number of people come back out of various lockdowns and decide to change the course of their future lives, to get out of business, to reduce their involvement. Historically people make major decisions either when they are sick or when they are on holiday. Lockdowns are a strange amalgam of both and we are seeing a similar outcome.

So if I have got a business what are my options for it going forward?

Option One – Choosing to keep the business
The first option is that I might choose to keep it. That doesn’t mean I have to work as hard as I have in the past. I might want to reduce my hours and I might want to empower management, I could even appoint a CEO, even if I wanted to stay involved, I could probably reduce my involvement and work smarter not harder. If I can reduce my involvement that might mean I might be prepared to work longer than I otherwise had planned to. Lockdowns also showed us that we don’t like being bored. So the question is what would I do if I didn’t work in the business.

Option Two-Step out of the business
The second option is to step out but to keep the business. You could appoint a CEO. This might be an existing member of the team or you might have to go outside and recruit someone. Cultural fit will be important if you are recruiting.
Some people have businesses that are big enough to warrant having a board or an advisory panel. I call them a panel, not a board because boards suggest they have decision-making rights. An advisory panel is there just to keep an eye on things for you. We will be doing another video on this about how you appoint a board, but the key is to go and get the best people possible. The analogy I would use if you were picking a rugby team would you go and chose your mates to be in it or would you go and get All Black quality people. The answer is obvious.

Option Three – Selling the business
The third option is the hard one do I sell my business? Can I sell my business, am I actually able to sell to someone else something that I have built up over many years, built out of the ground. However big it is now it is something that I built up over time. Most of the businesses that we assist in the sales process were founded by the current owners, the baby boomers and others that have built a business out of the ground.

Prior to sale, you should tidy it up. There is always a lot of housekeeping that can be done which will reduce the reliance on the vendor in terms of the day-to-day activity of the business. But more importantly, add value and maximise the value of the business. As part of this, you need to do a strategic plan. Showing what is capable for the business in the future and how it can continue to grow not just in sales but more importantly in profits. That is what is going to add a lot of value to a prospective purchaser.

The appointment of a broker is an important step in selling a business and you need to choose carefully. We do have a separate video coming out on the sale process and how it works so keep an eye out for that over the next few weeks.
At Covisory we have worked with many businesses that needed to know what their options were. We have been able to help them through each of these steps and in some cases other steps that were more relevant to their particular business including merger, MBO and the like. We have the expertise and experience to assist. Right through from the planning stage and identification of options through to assisting with the sale process and negotiating with potential buyers.

So if you have got a business and you are not sure what to do with it, come and have a chat to us. We are not going to give you a cookie-cutter approach we are going to find out what works best for you. We have a skilled team that have a lot of experience in this area and they will be happy to share their knowledge with you.

Prepared by Nigel Smith