Bournemouth Chamber of Trade & Commerce


Bournemouth Chamber of Trade and Commerce


Saffery Partner Jamie Lane looks at the pitfalls to avoid when looking to sell a business​

For most business owners, selling a business happens once in their lifetime. Such an exit event is normally the end game for most entrepreneurs, however it is human nature that lots of other emotive factors can often distract from the main goal of completing a smooth transaction and maximising value.
Having emerged from a sharp downturn in buyer appetite over the first six months of the Covid-19 pandemic, buyer appetite has rebounded strongly to such an extent that 2021 is on track to break all records in terms of the value of aggregated deals completed. This is being driven by the availability of cash on buyers’ balance sheets and the continued increased availability of both debt and equity funding. Despite merger and acquisition (M&A) deal values being dominated by multi-million-pound transactions, we are also seeing increased deal volumes in the SME market.

With the M&A landscape set to continue to boom for the foreseeable future, an increased number of business owners are receiving unsolicited approaches to acquire their company. It is important to be able to be ready and react to such approaches, as it could be the ideal opportunity to exit, albeit earlier than anticipated.

In selling a business, getting it right the first time is absolutely key, there will be no second chances. The sale process is long and potentially complex; we have set out below a few pitfalls to avoid before and during the process.

What’s it worth?
Valuation is arguably the most important factor for most vendors in a sale process. While maximising value is always the key focus, vendors can often have unrealistic expectations as to what price a business can achieve. Sometimes valuation is driven by market sentiment and other factors outside your control, and therefore timing becomes an important factor. Ultimately, the business is only worth what someone is prepared to pay and independent views should be taken on board. In a situation where you have been approached by a purchaser, consideration should be given to undertaking a wider search for potential buyers as competitive tension can often result in a higher sale price.

Numerous factors are taken into account in valuing a business by potential acquirers and growth prospects will be high on the agenda. ‘Earn-outs’ are a good way of bridging a pricing gap (where the seller receives a contractual provision for compensation, subject to the business’ future performance), but care should be taken on two fronts – that the mechanism is not subject to manipulation and that vendors’ personal tax position is not compromised.

Don’t ignore management
A key strategy in preparing any business for sale is to have strong management in place, such that the business can operate successfully after the vendor departs. Employee incentive schemes are a great way to incentivise and tie in key management and are especially important in people-based businesses. Not only is it beneficial to have such schemes in place, but timing is equally as important and if not done early enough, this could lead to the management team potentially being left in a tax position that is less than ideal.

Management could also potentially be an option as an exit route for your business by way of a management buy-out, and this should be considered. The challenge can be assessing whether management can obtain funding and whether such funding can meet your own price expectation.

Fail to plan, plan to fail
It is never too early to start planning for the sale of your business as you never know when you might be approached outside of a sale process. Good planning should also extend into how the sale process is run and managed. Certain buyers will quickly sense if there is a lack of direction from the vendors and use this to their advantage, creating opportunities to chip away at the price. Being clear about the process and the transaction structure all the way through to completion helps to set certain parameters for all to work within and these should be fully reflected in the heads of terms at the outset, before granting exclusivity.

Once a buyer is in a period of exclusivity and commences due diligence, any opportunity to chip away at the price could potentially be taken. It can be particularly tempting for sellers to succumb to these tactics and accept these price chips, especially right at the end of the process after many hours of work and being within touching distance of the finishing line.

Plan B
With the best will in the world, sometimes deals will fall over part-way through a process, perhaps because of something that comes up in due diligence or maybe as a result of the buyer being unable to obtain the required funding. The seller and their management team will likely devote considerable time and resources to the sale process and may well inadvertently take their eye off the day-to-day running of the business. The impact of this may not become apparent until a few months down the line when you are marketing the business again and talking to other potential buyers. There are ways in which these risks can be managed and mitigated.

A numbers game
As alluded to above, there is much more to selling your business than the numbers, yet ultimately this is where a significant focus for any buyer will be. Good steady growth in revenues and profits over the last few years will appeal to potential buyers, particularly if these are in the public domain and where they have been subject to independent review.

If you are considering selling your business, or have any questions based on the issues raised here, please contact your usual Saffery Champness partner, or speak to Jamie Lane

Saffery Webinar – Entrepreneurs: Driving Business Performance

Saffery Champness Chartered Accountants held their second webinar of a 12-part series to support Entrepreneurs. Hosted by Alistair Hunt, a partner in the Peterborough Office, this webinar entitled “Entrepreneurs: Driving Business Performance” was joined by Chris Zanone from Centurion Safety Products and Ashley Maile from Treerange Group, who discussed the value of KPIs in driving business performance and growth.

The panel discussed the value of key performance measures, how to set them, how to track them and the importance of tailoring them so that they drive the behaviours of your employees and match the culture of your business. Some great advice was given on how to set KPIs to achieve this by focusing on performance measures which will really push your business forward whilst avoiding the trap of chasing the numbers. To see the full webinar, visit Entrepreneurs Webinar | Driving Business Performance – Saffery Champness.

William Howell, Manager- Audit in the Bournemouth Office said, “Our series of webinars provide business tips to entrepreneurs. This event was well received, with good attendance, and delivered some fantastic snippets of advice on how entrepreneurs can better measure performance to drive their business forward. We look forward to the remainder of the series with upcoming webinars covering topics in business management, tax and strategy.”

For a full programme of upcoming webinars go to Events – Saffery Champness.


New Investor P​olling system enables investors to interact and privately register interest

Dorset Business Angels (DBA) held their first online quarterly pitch event in 2021, attracting a record number of some 59 attendees registered and 30 DBA members present. It also saw the introduction of a new polling system.

5 entrepreneurs pitched to the savvy investors and partners. Pitches were followed by a Q & A session, whereby would- be investors could further interrogate the entrepreneurs on their business, ideas and potential opportunities and markets. Questions came from across the board.

A new polling system was then introduced in which attendees were asked to rate the presentation that they had just heard and also to register their interest to find out further information about the pitch and carry out due diligence on the investment opportunity.

DBA member Frank Guinn who chaired the event said, “The polling proved particularly impactful as it provided us with immediate levels of investor interest.  Coincidently, our investor interest was at an all- time high, for the 2nd consecutive pitch event, and we felt that the anonymous system allowed attendees the privacy to express their intentions to get involved.  21 expressions of interest were shown in total at our event.

“The investor feedback on the presentations also provided invaluable data to be fed back to the entrepreneurs presenting.”

Business pitching included:

·       A business in the Advanced composite materials sector, with aims to increase the capabilities of the world’s most demanding products through the application of advanced materials and manufacturing techniques. In revenue and with an expanding customer base, the Company is currently focussing on the delivery of key contracts in the automotive, electrification, electric machines, defence, and aerospace sectors.  Investors were particularly impressed by the list of businesses and sectors that were being supported – Airbus, Safran and Electric Motors & Generators were name dropped, to name a few. The ambition of ‘Sustainability with Enhanced Capability’ was shared and the impressive pitch resulted in an extremely positive 9 expressions of interest.

·       A provider of online education seized the moment and grabbed investor attention, with 4 expressions of interest shown. This currently ‘hot topic’ business stated that it focuses on life skills that promote social and emotional wellbeing and dynamic thinking with an aim is to help young people to thrive in life, both at home and in their future work-places. By complementing the traditional academic education with live, interactive online and offline courses for 5-13 year-olds, they help develop young people’s skills in leadership, confidence, resilience and creative problem solving.

They shared their vision to be a global leader in developing life skills, with the goal of transforming the lives of at least a million young people. They backed up their vision by advising that ‘now, more than ever, the world needs people with the empathy, resilience and confidence to thrive.’

Discussing the size of the opportunity, they explained that the UK private tuition market is worth £2bn and the global private tuition market £75bn, with a forecast that the global private tuition market would be worth £139bn by 2026.

·       A Customer Data Processing software business which offers its clients a platform that immediately creates a seamless customer experience easily and at scale. Formed 5 years ago with the founder’s own money, the Company is now employing AI techniques to further enhance the efficiency of their model, to the satisfaction of their growing client base.

It claims to view complete customer profiles, improve and enrich data, understand customers and develop strategies to help the business grow, activate the date across all customer touch points and to measure the success and effectiveness of strategies. Currently working with Crowdcube, they shared the impressive testimonial from Crowdcube co-founder and CMO Luke Lang who said, “Crowdcube literally wouldn’t be where it is today without Distil.”  5 expressions of investor interest were shown.

·       A company with a range of healthy drinks, containing all the nutrients necessary to produce many tasty options, without the sugar and artificial ingredients usually found in traditional soft drinks. Their ‘health pod’ modules offer users the facility to use their home coffee machines to provide a quick and easy way to get these nutrients into a cold press juice or smoothy for around 70p per unit. UK distribution is now ramping up with the product available in 5 supermarket chains and the Company is distributing their range door-to-door in over 50 countries. The product launches in the US in January.

The passionate founder of the business shared the experience of his team, which includes 4 investor directors with experience ranging from entry and exit for FMCG brands, to former directors of investment banks.  He also told investors that he is mentored by Stephen Hann, MD at Graze. Clients gained have included John Lewis, Morrisons, Holland & Barret, Costco and David Lloyd Clubs. 2 expressions of interest were shown.

·       A pre-launch Fintech Investor Analysis SaaS company that has developed a platform that tracks the data performance of private, early-stage companies and gathers operational metrics. The platform is now capable of profiling the investment readiness and business potential of start-ups and early revenue companies extremely well. In the present pre-launch phase, the Company has 12 customers paying monthly recurring revenues and has generated 1300 worldwide data profiles that help with the investment analysis and business decision making of its current users, namely, angel investors, accelerators, funds, support organisations and consultants.  1 expression of interest was received.

Roger Wareham, Partner at DBA Sponsors Saffery Champness advised, “It was great to see such a wide range of businesses pitching and pleasing that there is still positive growth and opportunities coming through. It was also really encouraging to see the level of interest and potential appetite from the investors attending.”

DBA was formed in 2013 with the aim to bring investors and entrepreneurs together to accelerate the growth of early stage businesses. DBA provides quality, private equity investment opportunities to local high net worth (HNW) and sophisticated investors (SI).

Four times a year companies are invited to attend an event at which they pitch their business to the savvy Angels in a Dragon’s Den type scenario. Angel investment might come from a single investor or it could be 2 or 3 Angels pooling funds together to support a company. Any investments are in the form of an equity investment and not a debtor’s loan. Investments are made across all sectors.

DBA is sponsored by Saffery Champness Accountants, Ellis Jones Solicitors and Investec Wealth and Investment. To find out more about Dorset Business Angels visit