Presentation: Mergers & Acquisitions for SMEs – Is it a viable option for growth?

Acquisitions is hard business but its not all just about the big boys.

For business owner of an SME business the decision to invest in buying another firm can often be life-changing with the potential to alter the course of the firm and the opportunities for employees, for better or worse. You need to look for reasons and have an understanding of why they should acquire. Alternatives to acquisitions should also be strongly considered and evaluated.

Listen to this video to get to grips with the potential SME businesses have in growing through acquisitions.

Key takeaways:

  • The potential and benefits to growing your SME via an acquisition
  • How to successfully plan, prepare and execute acquisitions to maximise the potential
  • Learn from successful SMEs acquisitions through targeting companies

If you are thinking of growing your business via an acquisition it is strongly recommended to get professional help from people who have the day by day experience to support you for your successful outcome.

Contact us here for a your FREE and confidential meeting with your local CMC Partner.

Presentation: How to increase your business value

Are you looking to exit or sell your business in the next 5 years?

This informative presentation is relevant for business owners who wish to realise their full business potential with increasing business value for their eventual exit or sale.

Listen for key drivers and tips on maximising the return of your business by preparing now.

 

This presentation covers:

  • How to value your business – valuation basics
  • Types of potential buyers
  • Factors affecting the value of your business
  • Example valuations
  • Tips on valuation – the 3 ‘p’s
  • The sales process and whats involved at each stage

For a free confidential meeting to discuss the content of this presentation further or for help to increase your business value contact us here

CMC Partners Business Advisors Celebrating 30 years in business

Celebrating 30 years in business: Interview with founder Derek Allen on ‘staying ahead’ for 30 years

Derek Allen - Buckinghamshire Business Advisor

As CMC celebrates 30 years in business supporting businesses to grow, exit and sell, we step back and reflect how CMC started, the challenges we faced and the successes we gained with an interview with CMC founder Derek Allen.

It’s a pretty momentous milestone, Derek – 30 years of CMC. How does that make you feel?

We’ve survived! Through three recessions, good times and bad. We’ve been fortunate enough to have great people around us that are willing to step up to every challenge. It’s that resilience that’s got us through the last 30 years! Just think, in 1989 when we started, Tim Berners-Lee had only just created the internet, the Berlin Wall had just fallen, and our pride and joy was a fax machine! It really was a different time!

What was the inspiration for the business? How was CMC born?

Well, I originally trained as an engineer and did my first degree at Loughborough and then spent a couple of years at management college looking at new technologies. At that time a CAD system was £100k a seat. Here’s a statistic: every year the latest microchips would double in power, but halve in price! It dawned on me that we would see substantial change in the industries I had grown up with. So change was really important to the vision. CMC – Consultants Managing Change.

I think back to times as a student doing my apprenticeship at Hamworthy Engineering in Poole, where I was tasked with training people who had only ever used a drawing board for 25 years, to suddenly pick up a mouse and use a computer for the first time to learn these early CAD systems. At this time, nobody had ever done it before, nobody knew how to train them. It really made an impression on me that in this time of huge change, there was opportunity. I could see it happening in the manufacturing space, with car production at Toyota down from two years to six months. Those transfixed and observing went down the tubes while others started playing catch up. I knew this was going to have an impact on business, organisation, management, people, culture. This is all still so relevant today.

The other driver was being in consultancy for four or five years before I set up CMC. I’d grown to really hate prescriptive consultants, and the one-size-fits-all approach. And so CMC was born. CMC – Catalyst – Mentor – Coaches.

While we were building CMC, we saw the change tech was bringing. We started out working for corporates like BT, BP, Xerox and Unisys. Whole teams had to be retrained, and the approach to solving business problems changed radically as did infrastructure, process, culture… IT and innovation was behind it all. Finding the constraints and bottlenecks was key.

What has been the biggest change for you?

In the early 90s we had a recession and we were forced to evolve for reasons of survival. We moved away from serving corporate companies to working with Small Medium Size Enterprises (SMEs) – Owner Managed Businesses and got very busy doing so.

Since then we’ve defined the CMC model which is so effective for-owner managed businesses. It’s an area we never dreamt of working in, we’d previously only worked with big corporates with multimillion turnovers.

The gear change to working with smaller SMEs allowed us to survive the recession, but brought its own challenges. We had to look at our own structure and operational team, and consider what we needed to build this area of business. A totally different model, needing a totally different consultant.

This is where Adrian Todd came through. Our relationship has been the backbone of the business. He was the standout character, very sharp. Emotionally intelligent. I brought him into the partnership and much like my original partner Andy, a totally different character to me. We complimented each other perfectly. I can come up with an idea, bounce it off Adrian and then he can define a process around it.

The need to have consultants within our business meant we could no longer operate a PAYE model and associates would come and go. So, 15 years ago we created a franchise. This giving responsibilities from the franchisee to us and responsibilities from us to the franchisee. A legal framework, which we operate as if it were a partnership. We are now extremely proud to have 10 carefully selected wise CMC Partners, all with huge amounts of business experience and passion to share with owners to help them realise their full business potential.

Owner-managed businesses are simple in one degree, yet complex as they are the epitome of the people that own them… owners create a reality based on their own perception of the world. That reality is peculiar to any other business because of the owner. So we make sure we have a deep understanding of the client and their business. Do they have an aversion to risk? Is it money that drives them? What are their personality traits? This is key, coaching and mentoring them.

We’ve had consultants working with some clients for over 15 years. We look at the long term, monitoring the changes inside and outside of that business, adding value month after month. It’s our purpose to be flexible and non-prescriptive. If we don’t add value, we shouldn’t be there.

The trick is to constantly reinvent, be agile and be creative.  Client success is everything.

What’s your proudest moment?

I suppose we’ve turned 20 people into multimillionaires by helping them to sell their businesses. In some cases for tens of millions of pounds. We understand how to do that, and how to replicate it via a framework to do it again and again. Listen to some of our happy clients.

Something else I take pride in was using that knowledge to create a totally separate business, AiQ Consulting Ltd  (Airport Intelligence) which works out of London Heathrow and has clients worldwide. We model the movement of passengers, baggage, vehicles and flights in an airport and as the airport expands predict where it will become constrained.

We employ mathematicians and physicists to solve these highly complex problems and experienced airport planners. We recently helped the most space-constrained airport in the world, and we’re rolling out across the globe. And much of it is down to the tools and techniques we’ve created at CMC. The synergy between the two companies back each other up and learn from each other.

What does the future look like?

Owner-managers are interesting people to work with as they tend to have the entrepreneurial spirit. Technology is also key today and indeed tomorrow. It’s amazing when you think how quickly you can get to market compared to when we started CMC. 

Any change is an opportunity to prosper. Have confidence in your own ability to create the present in uncertain times. Be prepared to dig deep, and be really sure of your own ability. We can’t control the environment, so your ability to respond is essential.

Long term success

Focus as a Growth Strategy

“If you don’t know where you want to go, then it doesn’t matter which path you take”

Lewis Carroll, Alice in Wonderland

A lot has been said and said again about business growth. But somehow, it doesn’t seem enough. Consider the relative growth of revenues in the small and medium enterprise (SME) segment with between 10-250 employees to that of the larger enterprises with more than 250 employees. Data from the Department of Business Innovation and Skills shows that the SME sector generated a 5% revenue CAGR in the 2014-2018 period, compared to a flat 0% revenue CAGR for the larger businesses:

Graph Source: Annual statistical releases, Dept. of Business, Energy and Industrial Strategy Data excludes financial land insurance activities 

Strong profitable growth (in revenues and margins) should normally aid in better returns of invested capital (ROIC). Nowhere is this more critical than in the Small and Medium Enterprise (SME) sector. Whether you are a privately-owned founder-led business or a small/medium cap public listed firm, you invariably have limited capital to deploy or must stringently manage your cost of capital.

Focusing on what your customers actually need, how best to continue to service them after the initial sale and what business models to adopt will help increase revenue and margin growth. Assessing your company’s strategy across these pillars will create a growth mindset:

  1. Assess the interplay of customers and products: Your current customers are the largest source of revenue growth. However, if they are only buying product development, for e.g., and not maintenance services from you, you are leaving opportunity on the table and your competitors are taking a share of your customer’s wallet. Analyse your customer needs and see how you can leverage your current relationships to provide additional products in your portfolio to your customers. Such a critical analysis also reveals opportunities for you to look at new products that are not in your portfolio, that if you had in your possession, your customer would buy from you. This involves developing a new product or service in order to satisfy your customer requirements in areas that you have competence or skills. Entering new product segments is often a rich (if not risky) source of new growth. Finally, assess how you can position your current (or new) products and services to new customers.
  2. Assess the interplay of customer service and experience: Congratulations if you have managed to convince your customer to buy from you – but is the customer satisfied with the product and do you go the extra mile in helping your client be a super satisfied user? The old adage of keeping your customer happy is not a cliché. Do your customers have pleasant experiences every time they interact with your company? Look at every point of interaction with your customer and critically ask the question ‘Have I done everything possible to make my customer’s experience pleasant and hassle-free’? Customer advocacy is unarguably the strongest validation of the benefit you are providing in the market, generates repeat sales and often convinces new customers to buy your offerings.
  3. Assess the interplay of business models and your investment decisions: How you make money is your business model. Do you license your products into perpetuity to your customers in return for a one-time fee or do you sell a service in return for a recurring fee? Do you include after-sales service as a bundled fee upfront or only charge on a pay as you go mode? The choices you make on your business model will impact the level of investments and cash flows. Your business model is intricately tied with your strategy to acquire new customers and service them. Link your business model closely to your customer needs and after-sales support requirements and you will create an entrenched competitive position for yourself.

So back to Alice, then.

Evaluating the interplay of customers, products, customer support and business models is the focus that will allow you to not just evaluate the strengths of your firm, but also inculcate the focus every business needs in the way it makes its investment decisions.

Quite simply, if you don’t know where your growth comes from, then it doesn’t matter where you put your money.

If this resonates with you and wish to get an external perspective on your growth plans, contact Atreya on 07787 277097 or make an enquiry here

Client Video: Giving confidence, knowledge & experience for owners to make strategic & informed decisions to grow their business

Watch this video to hear how Staffordshire based Business advisor, Richard Lloyd has worked with the business owners to give them confidence, skills and experience to make more strategic and informed decisions for the development and growth of their business.

Business: PI-KEM – Suppliers of advanced materials and equipment to scientific research and development sector.

Richard facilitates us to make decisions, he challenges us, he questions us. He gives us knowledge or information when we need it or sign post to places but its always us who makes the decisions with his support and mentoring behind us.’ Fiona Rouse, Operations Director, PI-KEM

‘Richard has enabled us to make far more strategic decisions and to be more analytical of our business and challenge ourselves more’
Fiona Rouse, Operations Director, PI-KEM

‘We would absolutely recommend Richard from CMC. He has given us confidence as a team and company to push us forward and to be aspirational. We have clear direction, the directors now have the skills and we can focus on the higher level management of the company, not the day to day tasks.’ Fiona Rouse, Operations Director, PI-KEM  

3 Secrets to Buying a Marketing Agency

The marketing agency sector is fast-paced and exciting. If you’re in this sector, you may be looking to expand your business. One way to do this is to buy another marketing agency and absorb it into your operations.

When you are looking for the right business to buy, you need to be clear about your goals. Are you looking for a business with a specific niche offering or, perhaps, one with a particular client base?

There are several things that you will have to keep in mind no matter the reason you have for buying a marketing agency. Here we look more specifically at what you need to know before making an offer.

1.Know why you’re buying

The marketing sector has grown tremendously in the last decade. There are various different niches or areas of marketing that an agency can cover.

If your marketing agency lacks skills in certain areas, you may be looking for a business that can add to the technical elements that you are able to offer.

You need to have an in-depth knowledge of the industry so that you can understand what part of the industry is going to grow. You will want your business to keep expanding, make sure you are careful to research the area that you are looking to expand into before you buy a new business.

You could be looking for a particular creative skillset such as video creation or live events. Alternatively, you may be wanting to acquire particular marketing expertise.

Be as clear as possible with what your expectations and goals are so that you buy the right complimentary skillset. If you have been outsourcing a particular part of your business, it can be beneficial to buy a business that will be able to provide you this service in house.

Of course, with the fierce competition that exists within the marketing sector, you may be buying a competitor out so that they are no longer your competition. This way you will be able to increase your share of the market.

Be aware, in all situations, of the staff that will be coming on with the merger or acquisition. You can position yourself well to add impressive talent to your staff!

2. Know what you’re buying

An important part of what defines a marketing agency is the reputation that it has, and the type of clients that it has on its books.

Purchasing a new agency will mean taking on its reputation. If a business is selling cheap, you may want to find out why. Will you be able to rebrand the business successfully when you buy it and put it in line with your business’s identity?

In order to know what you are buying, you will have to take a careful look at the customer lists, clients and the intellectual property of the business.

When you take over another business, you should be very careful to secure the digital rights. You need to get hold of all the web domains, social media and email accounts as these form a vital part of any marketing agency.

3. Do your due diligence

If you are going to buy an existing marketing agency, you need to be prepared to conduct a thorough due diligence.

Have you fully researched what the strategic fit will be? You will also need to understand any employee and management issues and how these will play out in the wider structure of your already existing operation.

It might be in your interest to get the help of a lawyer, accountant or/and business advisors that can help you go through the process. You will need to go through all the contracts and accounts that the business has to know its real value.

You also need to make sure that the clients will remain on after the sale. If they are likely to leave with the old owner, your reason for purchasing the new agency might disappear.

CMC Partners are trusted experts delivering growth and exit strategy development to owners of SMEs since 1989. Growing a business by acquiring another through a merger or acquisition can be a viable option for growth for an SME but must be carefully planned, prepared and executed. With a proven track record of guiding owners successfully through this process and knowledge of the marketing industry with existing clients in this sector, it enables us to add real value to SMEs considering buying a marketing business. Contact us to arrange your free confidential meeting with your local CMC Partner to help realise your full business potential.

Guest blog by Matthew Hernon, an Account Manager at Dynamis looking after Business Transfer Agents and Franchises across BusinessesForSale.com and FranchiseSales.com.

Listen to CMC Partners at The Business 2019 – Mergers & Acquisitions for SMEs – Is it a viable option for growth?

Come and Listen to Atreya and Simon at The Business Show 2019 – 16th May, 2pm

Acquisitions is hard business. And it’s not all just about the big boys. Join Atreya and Simon  at Businesses For Sale Live to get to grips with the potential SME businesses have in growing through acquisitions.

For a CEO or Owner of an SME business the decision to invest in buying another firm can often be life-changing with the potential to alter the course of the firm and the opportunities for employees, for better or worse.

Company leaders should look for reasons and have a reasoned understanding of why they should acquire. Alternatives to acquisitions should also be strongly considered and evaluated.

Sources of financing the deal is critical – getting the numbers wrong can put a healthy company into critical care.

Key takeways you wont want to miss:

  • The potential and benefits to growing your SME via an acquisition
  • How to successfully plan, prepare and execute acquisitions to maximise the potential
  • Learn from successful SMEs acquisitions through targeting companies

Join CMC Partners at The Business Show 2019 in London Excel on Thursday 16th May at 2pm. Atreya and Simon will be presenting in the Businesses for Sale Live seminar area , located by their stand 1086.

Book your Free ticket here.

Check out the other seminar they’re presenting on increasing the value of your business.

We look forward to seeing you there!

Listen to CMC Partners at The Business Show 2019 – Increasing Your Business Value

Come and Listen to Atreya and Simon at The Business Show 2019 – 16th May, 12pm

When you have made the momentous decision to sell your business one of the next steps is to start thinking about a valuation.

It’s not just about coming up with a figure and sticking it on the market. Like any seller you’ll want to maximise your return, and, there are likely to be a few things you can do now which could increase the value of your business in the long term.

Key takeaways you won’t want to miss:

  • How to value your business
  • Key drivers to that will increase your valuation
  • Key preparation tips for a successful sell
  • Attractiveness of the business to a potential buyer
  • 6 step process to selling your business

Join CMC Partners at The Business Show 2019 in London Excel on Thursday 16th May at 12pm. Atreya and Simon will be presenting in the Businesses for Sale Live seminar area , located by their stand 1086.

Book your Free ticket here.

Check out the other seminar they’re presenting on Mergers and Acquisitions for SMEs to grow.

We look forward to seeing you there!