The right time to sell? When the right buyer wants to buy?

Ellis: What separates a truly valuable business from a good one?

Mark: Good people, a strong culture and a clear strategy. Considering just a few of the businesses we’ve worked with where very substantial value has been created, for example, RSK and APEM. They started relatively small, but they were excellent at what they did, the culture was right, and they knew where they wanted to go.

The challenge is keeping those qualities as you grow. Culture comes down to how people behave, how they treat customers and what motivates them. You need the right people in the right roles, with incentives that give them a reason to help build the business.

Ellis: When do acquisitions make sense?

Mark: Get your own business right first as a platform. Then look at what else your customers would like from you – an adjacent service, further expertise or another geography.

APEM as an example. Its early acquisitions in Ireland opened another market where it could apply existing expertise. Subsequent deals broadened both its services and geographical reach, on a journey that grew a very successful business and resulted in a sale to Applus+.

Early deals must work culturally. You might absorb a difficult acquisition when you’ve done a material number. You can’t afford to get number one or two wrong. If the people or culture aren’t working, address it quickly. Waiting and hoping rarely solves it.

Ellis: When should owners start thinking about succession?

Mark: I would suggest keeping two questions under review: what are my objectives, and what is my timeframe? You don’t need a fixed retirement date to start that conversation.

Succession can mean changing your role. Someone who is brilliant at starting a business might not be the right person to lead its next or subsequent stages. Recognising that in yourself, and bringing others through, is important.

An outside perspective can sometimes help. A non-executive director or mentor can ask uncomfortable questions you may be too busy to address.

Ellis: When is the right time to sell?

Mark: Owners often think: “I’ll sell when it’s right for me.” However, the right time may be when the right buyer wants to buy.

You could have a fantastic business, but your two most likely buyers have just made acquisitions, changed chief executive or encountered problems elsewhere. Keep watching the market. An opportunity might arrive before your planned exit date. You want to be able to respond.

Ellis: What can derail a sale?

Mark: Poor preparation and unrealistic expectations. Buyers will quickly spot if a business relies too heavily on one person – whether that’s for customer relationships, technical knowledge or day-to-day decisions. Building a team that can operate without you puts you in a stronger position. You also must keep running the business. If performance slips during a process, buyers start questioning the valuation or the transaction itself.

Ellis: What do owners underestimate?

Mark: The emotion of a transaction that is present in so many areas and aspects.

Selling a business that you’ve lived and breathed, it is your people, your identity, sometimes your name above the door. In addition the right outcome means understanding what you want your life to look like afterwards, what role are you happy to perform, alongside the financial result.

From L-R: Ben Nix, Ellis Jenkins, Mark Watts, Koo Aseeley, and Josh Morris.