Stan Mendham business feature: Growing and selling (From Knutsford Guardian)

Stan Mendham business feature: Growing and selling

8:50am Saturday 4th July 2009

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THE founder of the Knutsford-based Forum of Private Business has teamed up with the Guardian to help residents and businesses through the credit crunch.

In this week’s column Stan Mendham, OBE, pictured, offers advice on growing and selling.

HISTORY reports that financially stable successful businesses grow fastest in recession.

This is not surprising as it is the time when the less bold are prepared to give up their business rather than face the trials of recession.

Here are a few tips when you consider growing or selling your business: Growing: You can take on more staff, extend your stock, equipment etc.

This inevitably means increasing the overheads but the advantage is the growth is slow and easier to manage.

Another option is to buy or merge with a competitor to take advantage of the instant increase in sales and make savings on the overlap.

If you take this route make sure your existing business does not need your direct input 24/7.

Make sure you have reliable people in place to whom you can delegate the day to day.

By the same token ensure the business you are considering buying is not owned by a 24/7 owner manager.

The simple point is that you need to buy a successful business not another job.

Another golden rule is never conduct the investigation and conclude the negotiation on price on your own.

Ideally have a member of staff, partner or solicitor to whom you can make the case for your decision and then be prepared to accept the feedback.

Selling: Recession is also a good time to sell or merge your business.

You will know the reasons why you have reached this point but you do not have to sell outright.

If you can build a sensible working relationship with the intended buyer you could stay on as manager full time or you could stay on for an agreed period of time while the buyer gives you part payment towards the business.

This can work extremely well from both parties’ point of view.

You, the seller, should over a period receive a higher price and the buyer will be more confident of the purchase.

Here is a tip for all Guardian readers, if you want your town to prosper spend your money with those who will keep it in the community.

Spending in supermarkets and other plcs generally means the money does not stay in the town apart from keeping jobs in the town.

But spending your money in owner managed businesses not only will ensure jobs but all capital expenditure and other investments will benefit the local economy.

My wife and I have put our money where our mouth is and are now shopping for fresh produce from local owner managed businesses which we find of a better quality and in most cases cheaper. So let us get behind our owner managed businesses and watch them grow.

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