Clinton Lee
Member Since: 19th Feb 2016
Likes: 1
Thanks: 39
After doing an undergrad degree in accounting (India) and reading for an MBA in finance (USA) - in addition to taking professional exams in Cost & Works accounting and in Banking - I decided that this is all too complicated. So I spent 35 years buying and selling small businesses, and running them.
My full time occupation now is UK Business Brokers where I assist lower mid market businesses (generally £2m - £50m in t/o) navigate their way to an equity event. I act as a first stop advisory on strategy and help business owners find the right business broker, M&A / corporate finance firm or boutique investment bank to fit their individual needs & exit goals - from MBO to IPO. It's a minefield out there!
I maintain the UK's only database / knowledge base on all the talent in this industry - sector specialisations, fees, fee structures, FCA status, cross border transaction experience, awards won, feedback and reputation ...all sorts!
Here's why it's nearly impossible to find the right firm without my help and here's my LinkedIn profile if you fancy getting in touch.
I'm well connected in the world of corporate finance / investment banking / corporate law, and I love introducing people. Let me know if I can open any doors for you or answer any questions you have about my world.
My answers
You've got to admit, it's been a field day for journalists. Following the tragedy in Germany, the BBC spent hours interviewing anybody who had even the most tenuous German link. "Let's interview Steve from Cardiff who brother-in-law knows somebody who visited Germany in 2003". In the lull between other big news items, there was the Brexit vote. And news organisations did really well out of the hysteria (and adding a bit of their own hysteria to keep the tills rolling). They're not going to give up that cash cow easily so expect them to bring Brexit-talk back whenever the tills slow down.
I couldn't agree more, Tornado.
Once every few months there's a survey like this and the results are always that many SMEs are considering selling. However, very few realise the time and effort involved in going to market. And the cost. If they're not put off by one, they're usually put off by the other.
Whatever happens, there'll be some volatility in stock, bond and currency markets but within a week or two, even in the event of Brexit, I suspect everything will be back to where it was. Business as usual. Fundamentals haven't changed. Trade with Europe will continue and current trade agreements will hold till new ones are negotiated. There's been a lot of hot air about economic collapse.
I like the suggestion to buy books or deal in other zero rated sales and thereby benefit from the VAT registration when making the acquisition! :)
Hi Robert, excellent article. But I'm not sure about Mr Nelson's claim about the "last great business architecture". The next great business architecture, some would argue, is the blockchain, and that party is only just beginning.
I've long had a problem with these "valuation methods". FMV may be useful for theoretical, HMRC or court purposes, but it's not what businesses get when they are sold. These methods all arrive at "a figure" but businesses are hardly ever sold for one cash figure; it's usually a "package deal".
The deal structure can include some cash, some shares in the merged entity, some deferred or performance related payment, some seller financing, various warranties and indemnities issued by the vendor ....
There are many variables.
Investors are looking for a particular rate of return for a given level of risk. Reduce the risk (by taking some on yourself) and the price goes up because you're in a different risk bracket. Expect more cash in early stages and the total price goes down to maintain the RoI rate. Price isn't written in stone. Business aren't worth simply what "buyers are willing to pay". A business is worth the best package that you can negotiate with buyers.
Sadly, business owners rarely appreciate this as evidenced by the fact that most start off their valuation journey by getting a "free valuation" from a business broker, a party with a vested interest in providing flattering valuations.
For anyone who's not convinced and believes they can stick one figure on a privately held company going to market, get in touch and I'll pay double that figure to buy you out.