Today at lunch, a friend of mine started discussing the lack of growth during recession and how impossible he thinks it is to build a business at times like these.
I must admit, I was pretty surprised; he is a business owner and NOW is his chance to really expand. Why didn’t he see this as clearly as I did?
In my opinion, recession is a time of opportunity. Luckily, my clients agree! Nevertheless, once lunch was over I realized that many other business owners might have the same worries as those of my friend.
In my opinion, recession is a time of opportunity. Luckily, my clients agree.
What if they were missing the chance to expand simply because they didn’t know how to deal with the recession? Maybe some business owners, you for example, would like to expand but you’re not sure where to expand or how.
For that reason, I decided to tell you the story of Len Dalton, print shop owner and a dear client of mine.
Len’s problems really all started after competition from a larger competitor robbed him of most of his profit. Understandably, this left him feeling as if growing his business were an impossible dream.
By the time I met him in 2010, he could barely afford to keep going. He knew that he had a good business and he was sure that it could be successful given the right circumstances. But it seemed so hard to get out of the rut of struggling to compete with a bigger business.
At our first meeting I could see he was pretty close to throwing in the towel. He just couldn’t see a way to expand his business.
So I asked him whether he had ever considered acquisition as a growth strategy. It turned out that he had! In fact, he had dreamed of running a chain of print shops, but he never thought that it would be within his reach.
The dream remained a dream.
Like many small and medium business owners, it seems he thought acquisition was something that was only available to big, well-funded, well established businesses.
Most owners find it hard to admit, but Len knew he didn’t have the expertise to buy another business. He didn’t even know where to start!
I asked him what he’d done to research the market and see opportunities and, as I expected, he told me he had searched dozen of websites advertising businesses for sale.
Not surprisingly, all the information he found made him dizzy. Plus they all seemed to be working for the seller and he was worried that they might take advantage of his lack of knowledge.
I mean, after all, he had no experience of negotiating business sales. No idea of how to even value a business. No way of knowing whether he was getting a good deal or being shafted. He knew little about the law. He had no idea how to finance an acquisition. If financing were even an option!
Luckily, on my side, I had seen this all before and was able to calm his worries.
I reminded him that I am a buy-side specialist. I was working with him.
For those of you who don’t know about acquisition specialists or about what we do at Chelsea Corporate – we are “buy- side” brokers, we work only for buyers. We never take a fee from vendors. We want to find what’s best for you and your company’s growth strategy.
We are “buy-side” brokers, we work only for buyers. We never take a fee from vendors. We want to find what’s best for you and your company’s growth strategy.
So what happened next?
Well, our research team soon got to work searching for suitable businesses for Len to consider and, within a couple of months, had found him 8 suitable printers, all in ideal situations where a specialist print shop could flourish.
Also, thanks to Chelsea Corporate’s wide network of contacts, I was also able to put Len in touch with specialist lawyers, financiers and accountants.
The fact that I was able to recommend these professionals to Len saved him a lot of time and frustration and for that reason I constantly emphasise our network’s importance to my team. It saves a lot of hassle for our clients and subsequently for us.
Next, I helped Len write his business plan, and stuck beside him from the moment he started looking for a business right through to signing the contracts.
In 2011, Len bought two other printers which were going concerns. He re-branded them with his own sophisticated brand, and introduced his specialist laminating processes to their existing customers.
I am thrilled to say that his profits started to grow again for the first time in years.
A year later, Len is still planning his future expansion. Today, he is well on his way to realising his dream. The days of struggling to compete seem like a distant memory. He has found his place in the market.
So, what about you reader? Is it time to take the next step and grow your company?
As I say to every business owner I meet – if you’ve never considered acquisition as part of your growth strategy, why not give us a call for an informal chat?
We would be happy to listen to your plans and ambitions for your business and offer you some free advice about whether acquisition could work for you as well as it has worked for Len.
Call me, Ran Carmon on +44 (0) 20 3011 1373, or drop me an email at firstname.lastname@example.org.
Disclaimer: This story represents a typical client experience. The client’s name and details of this acquisition have been altered for reasons of confidentiality.