I recently enjoyed a lunch with an old friend of Ovation, Bob Hollis.
Bob has been in the game of buying and selling businesses for many years now. Generally he acts on behalf of the buyer. Two particular aspects of our conversation are worth repeating.
First, numbers. Bob gets sent around 15 businesses a day that are looking for a buyer. These are mainly in the South West. That’s 15 business each day.
15 a day. 75 per week. That is a staggering number of businesses actively looking to be sold. With a bit of rounding, this adds up to around 40,000 businesses that Bob has seen in the ten years of so that he has been operating.
Of these 75 per week, Bob will take a good look at three, and perhaps meet with two of those. On average, Bob and Patrick complete around ten deals each year.
So, in ten years;
- 40,000 businesses wanting to be sold
- 1,000 of these have been worth actually considering
- 100 of these actually sold (through Hollis Gore)
Now, ask a business owner why they are working such long hours, sacrificing salary, not putting money into pension, and they will generally answer with the same well-worn phrase – “my business is my pension”.
There is a simple response this – sorry, but that is actually highly unlikely.
There are two messages, for me, that come out of this statistic. First, do not rely upon selling your business for lots of money. Don’t reinvest all profit for future growth, but use pensions and other forms of savings such as ISAs to create a backup pot of money.
I will address the second message in the next blog, which is a question you may well be currently asking yourself: “How can I increase the chances of my business being one that Bob will look at?”