32 DOING THE DEAL


Continued from page 31


Dave O’Keefe - Luxus Design


The thing with online businesses and retail is it’s very cutthroat. A lot of people go down the route of trying to be the cheapest online,


but it all comes down to customer satisfaction.


If you’re the cheapest online, you can’t have the infrastructure, you can’t have the team, you can’t have development power to make that customer happy, neither can you do deals with the supplier chains and keep them happy as well.


Our model was not price guarantees but making sure that the customer gets what they want, delivered on time, and get that customer satisfaction up there and that’s what built our brand.


From the very beginning we built our own departments, grew our own staff and did deals with suppliers, so they could see we were different to other people.


The hardest bit of selling a business is life after. I was never


prepared for it. When it came, it was so severe, it was like losing a family member


We were in a fortunate position, not that we were looking for it, to buy our biggest competitor. This business had far more experience than us and they were making a lot of noise with our suppliers.


It was almost humbling to know that we could be in a position after two years to take on this huge business, because they’d been going for ten years and doing really well.


We then had to think about the infrastructure, where could we save. It wasn’t just about the revenue; we could double the revenue overnight, but where could we save?


It came down to the supplier chain. Could we get rebates? Could we get a better deal? Could we get direct distribution? Could we get the exact products that we wanted? Can they manufacture, can we speak directly with the factory and go direct through our distribution chain?


When it comes to deals it is important to listen to the right people. I spoke to the team, people I worked with previously, got advice from friends I know I can trust, that I’ve built businesses with and that I’ve grown with.


Paul Dixon - Rothband


When it comes to deals, for me it is the human side. I’ve done four now including one management buy in (MBI).


I was working in a medical device company, a pretty small lifestyle type family-run business, turnover about £1m in quite a niche market, but it lacked strategy and desire for growth.


I arrived as part of the sales team, got very frustrated, was very naïve, and decided to launch an aggressive management buyout to try and take the company to where it needed to be.


Ultimately, I learnt a lot about what you shouldn’t do. The buyer wasn’t ready, the seller wasn’t ready. I didn’t have the experience and couldn’t get it to all meet up.


Looking back, I was probably a high-risk investment. Anyway, I went away, went around the world to build up some experience in other areas, in marketing, in development, and came back to that business.


We were still friendly, and the owner said he was perhaps ready to sell, so we launched a micro buyout. The business had been in the family for 150 years, so a big part was getting myself in a position where he felt the business was going to carry on with me.


We put a package together, and then we bought Rothband, which we’ve tripled in size in six years.


There have been a lot of infrastructure changes and we’ve just bought another factory to accommodate further growth, very much in mind of selling the business.


Now we’re really trying to diversify our portfolio to include more types of products and services that would get that higher multiple on deal day.


We’ve done two acquisitions, two very different companies, one is a property company that has facilitated the growth of the main company.


We’re looking at acquiring another company, which is building the main brand of Rothband in the medical imaging market.


We have a five-year plan in place to hit £5m and we’re on track. I think I’m going to go to a £10m plan and it’s the first time I’ve considered what happens after that.


Amin Kamaluddin - SK Growth


At SK Growth we focus on three things: scale up, growth and getting businesses sale ready.


People are


absolutely central to this. That’s not just the buyer, the seller, or the employees. What happens to your suppliers? Do they like the people that are buying you? They may not. What about your customers?


The one thing you can’t get away from is ‘reputation’. You might have a good deal that


you think is great, the other person may not think so, and good, bad or indifferent, that reputation will get out.


One thing I would say is, no-one likes surprises. So, it’s all about planning and ultimately it is about creating value.


What you’re creating is made up of various moving parts. For a lot of service businesses, it’s what you do and how you’re doing it and inevitably the people who are delivering that. People in a service business are very important.


In other businesses where you have value that’s derived from intellectual property, then it’s slightly different. But it’s always people that have created the value.


Don’t concede any


own goals. It’s easy to get your management accounts up to date, it’s easy to pay tax


It is also about storytelling. The younger, the more modern entrepreneurs and investors coming through, they want a story. In that story it’s important to talk about why the business came into being, how people have joined it, and the profit and the revenue to demonstrate that, ‘This is exactly what we wanted to achieve so, therefore, this is the value.’


Various things that can drive that value: having good people, a key leadership team, having intellectual property, brands, and having contracts.


The best clients I’ve worked with have given me a piece of paper and said, ‘This is who we would like to buy us. This is who we think would be a good fit for us from a cultural perspective, we actually admire what they do, how they do it, we can see some synergies, we’ve had some staff that have previously gone there’.


Really once you’re prepared, you’re in control. It’s all about intention, whether that’s ten, 15, 20 years down the line, it’s planning.


You’ve got to have that reason for sale. Often people find themselves in a position where it’s a surprise. It’s crept up on you, you’re in difficult situations, the pandemic has made you think twice, all these things trigger that, when really, it’s all about planning.


When it comes to due diligence the opposing side are there to find, attack, unearth and it’s as simple as that. So, preparation is the key.


Once the reason for the sale is over, you’ve got a sense of achievement. But you’ve got to have purpose after that, so the question is ‘What’s next?’.


Capital creates wealth so if you’ve got this amount of cash, what are you going to do? You can either carry on with new projects and creating wealth or you can make the lives of others better, and that’s where you have other people going into a kind of philanthropy.


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