We at abacus understand that every business is different and in order to help our clients have the greatest chance of achieving their objectives we know that it is essential to take the time to listen to you.
Only when we have an understanding of your business, the priorities you have set and the challenges you have to face to achieve them are we in a position to help you achieve these goals.
Whilst every business is unique, our experience has shown us that at each stage of the business lifecycle there are a number of generic similarities between businesses.
In our opinion there are typically four stages in a business lifecycle and we at abacus have the experience and support to advise a business and its owners at each critical stage.
To find out more about each stage in the business lifecycle click on each of the boxes below:-
abacus characterise businesses in this state of their lifecycle as being within two years of start up. Generally the owner is experiencing transition from being in employment to owning their own business resulting in working long hours, placing pressure on their personal life.
They may have invested substantial private funds in the start up, either through their own cash or guarantees to their bank. Generally, we find the biggest challenge these businesses face is juggling the management roles of marketing, finance, operations, sales and HR with little or no external support. They may also be dependent on one major customer or contract at this stage in the lifecycle.
Following a successful start up where the business has established itself in the market place, a period of rapid growth in sales, profits and the size of their organisation often follows.
This brings new challenges in wrestling with the transition from start up to maturity including the building of a management team, possibly moving to larger premises, installing appropriate IT systems, infrastructure etc.
There may also be implications from growth, including an additional requirement for finance, working capital and cashflow together with avoiding the dangers of over-trading.
We at abacus also believe that businesses at this stage of their lifecycle require reliable management information most usually in the form of management accounts produced to enable the management team to manage their business more effectively.
Perhaps the biggest challenge to business owners in this phase is their own personal transition from expert tradesman to an effective business leader committed to a clear business plan. The transition, whilst necessary, is often a hard one to make.
As the business grows and takes on greater scale, a genuinely valuable asset evolves. It is therefore imperative that appropriate agreements are in place between shareholders and partners to avoid disputes and to secure valuable tax advantages, remuneration, and ultimately on the disposal of the business.
Following a long period of growth, many businesses reach a stage of maturity, a relative plateau in terms of sales, profits and growth. In these cases we often find long-serving or family members in senior management positions and this can lead to conservative marketing and decision making.
We also find that these businesses have more complex financial structures in place such as share holdings, freehold and investment property, cash in the bank and well-funded retirement benefits.
There may also be an increased perception of the risks of the loss of key customers, key employees, or changes in the competitive environment which could result in adverse impact on the ongoing success of the business.
Finally we find that many mature business owners have at least one eye on how they will ultimately exit their business and will have plans in place to ensure this happens successfully.
Business owners who are at the point of exit, or approaching exit, normally have a clear motive to support their intention to sell their business. This is often triggered by personal issues such as age or changes in personal circumstances or it can also be triggered by an unsolicited approach from a potential buyer.
Where a business is owned by more than one owner and the business is to be sold as a going concern there will need to be unanimity among the owners.
The management team should be focused on dealing with the issues that may impede or reduce the value on exit, managing these matters very carefully prior to exit will maximise the sale value.
The involvement of external experts to advise on the correct course of action to maximise the sale value and more importantly advise the shareholder on how to maximise their net proceeds from the sale, will be key to success of the exit strategy.
Of course, the economic conditions at the time, and in particular the availability and cost of capital, can have a tremendous effect on both the number of potential buyers and the price they are prepared to pay. Timing of any sale is therefore critical to maximising value.
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