Buying or selling a hire business?
HOW THE HIRE EXCHANGE GREW FROM CONCEPT TO HAE SERVICE PROVIDER
2 ½ years from launch in 2020, The Hire Exchange has partnered with the HAE to provide an HAE Business Sales Advisory Service to help members understand the sale process.
The Hire Exchange co-founders David Graham and Chris Harvey were asked about the business and the issues faced by buyers and sellers.
Q1. How did The Hire Exchange start?
Chris Harvey explains “We launched as the only specialist business sales advisory for the tool and equipment sector, an idea David had on the banks of the River Tay, while not catching fish.
After 30-years’ in the hire industry with SGB Group and more recently Speedy Hire, he understood how difficult the acquisition process is for buyers and sellers.
David added “I knew what the problems were but needed to learn more about the mind set of buyers and sellers. As a brand and marketing specialist Chris, with whom I have worked closely for 30 years, conducted research to understanding what the market needed.
Said Chris “the research confirmed that sellers needed help with the process and particularly valuation and they wanted ‘Peace of Mind’ throughout the transaction. In effect an end to end service.
Buyers wanted to save time and effort finding good targets and the information they need to assess acquisition opportunities.
So, we help both sides. As we are about to complete our 13th sale, have 50 active buyers and 25 active sellers, with 4 coming to market imminently, it seems to be working.
Q2. When do sellers decide to sell?
Most owners have never ‘planned ‘to exit. They may have thought about it, but the phone rings and it’s business as usual.
Then one day they wake up and think “I’ve done well, BUT I’ve had enough of this” It’s an age thing, typically late fifties to early sixties when they realise that there is more to life than running a hire business. A house in the sun beckons.!
But, it’s not always age, ill-health or family issues like divorce are other reasons or the fact that they have grown the business as far as they can and it is time to pass it on, but sons or daughters aren’t interested and employees can’t raise the money or don’t want the risk.
There’s also a younger group, often mid - forties who simply want to cash-in and do something else.
Hire Exchange co-founder David Graham.
Whatever the reasons the questions are, what is it worth and how do I do it?. And that’s where we come in.
Q3 What are the problems for sellers?
Independent business owners are great at running hire companies but know little about the business sales process. Their concerns are valuation, process and who to sell it to.
Entrepreneurs buy businesses but accountants value them
so knowing how they think and what they expect is essential. The factors that affect value include sector, size of business, profitability, asset value, debt and location.
The process can be lengthy, up to a year is common. It requires a lot of thought, preparation and yes, salesmanship too. The value must be right, the presentation compelling and the strategic fit optimal, because buyers look for growth, so 1+1 must equal 3.
The Hire Exchange prepare and produce a comprehensive Information Memorandum that provides the key information a buyer needs to assess the opportunity. Alternatively, they tried a ‘generalist’ broker, who often
Before we arrived, business owners often sold to a local rival, with few competitive bids, or one of the very big companies and got out-gunned by in-house experts.
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