Female Entrepreneurs by John Smythe

Author:John Smythe [John Smythe, Ruth Saunders]
Language: eng
Format: epub
Publisher: Taylor and Francis
Published: 2020-06-15T00:00:00+00:00

MANAGING THE END GAME

In this last section, we glean words of advice from our entrepreneurs who have successfully sold their businesses on how to manage the end game. We touch on:

Building the business with the end in mind.

The art of good negotiation.

Capitalising on the exit opportunities when they come along.

We start with Victoria Mellor who built her business Melcrum with the end game in mind and who successfully sold it to Washington-based CEB in 2015.

She says:

During the pre-sale period, we recognised that CEB had an attractive business model that they had successfully scaled. They were located close to our U.S. team in Washington D.C. and inevitably you start talking. It became clear that they could be a potential acquirer for our business. A lot of our decision-making at this time was based on the fact that CEB could be a potential exit for us.

Consequently, I incentivised the management team on varying levels of share options. And when looking at systems and processes that we needed to invest in we’d ask ourselves: ‘What does CEB use?’. We wanted to make it as easy as possible for them to recognise at due diligence stage that we would be easy to integrate into their own business.

When we went to market with the business, we had advisors in New York who helped to create a lot of competitive tension, resulting in a couple of people bidding for it. But very early on in the process CEB said that they wanted an exclusive due diligence period – and were happy to let me and my partner walk away with no earnout, which was fairly unusual. At that point I’d also stepped away from being CEO to Chairman and so I didn’t really have any day-to-day responsibilities. I was easy to let go.

Victoria goes on to talk about the art of negotiation.

It’s very easy to get anxious and stressed, as there’s a lot going on. But none of these behaviours are productive. I think in hindsight I would have negotiated things differently. I would have had a better sense of where the other party is coming from, how they are feeling and what they’re going through, rather than just being engrossed in my feelings and emotions. I think maybe that’s just age and wisdom. I’m not saying I don’t get cross now, but I look at things with a much longer arc and try not to react to things immediately.

Lara Morgan also sold her first business, Pacific Direct, a luxury toiletries business, and is now running her new business, Scentered. Like Victoria, she built Pacific Direct with the aim of selling it, although missed out twice before finally making a good deal. She explains:

I learned recently that only 7% of British businesses exit, leaving 93% of people never realising their wealth or assets, and needing greater education or more ambition. I suspect there are more people that realise their wealth in America, but that the numbers are still very low. That makes me very sad. I exited my first business in April 2008 with 476 people working in nine countries.

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