£4m a year net and a question for you all

[Neveroutgunned27]

The title isn’t meant to brag or upset anyone firstly

Plenty of people make much more money and plenty make less and have more time for the important things in life so it’s definitely not a boast.

My business has grown quickly in the last few years and without going into details, we continue to grow strongly via social media / e-commerce with no let up. We’ve been making low single figure millions for the last few years and only have a handful of staff also. Very lean operation basically.

I work 12 hour days, every day and couldn’t / wouldn’t do this if my kids weren’t nearly ready to leave home - my wife is part of the business also.

We have no debt and carry very little stock.

We’ve had a few approaches from private equity companies offering to secure us 6-8 times net profits but in truth, we are not a big fish in the scale of the billion pound deals they really want to work on and no doubt they would find a way to chip the sale price and bump up their fees, plus I’d have to work for ‘a boss’ for a couple of years to get my hands on all the proceeds. Not for me.

Does anyone here have experience of selling their business (regardless or size) which didn’t involve private equity.

I’ve looked at our competitors and none have enough money to buy us out as they have a product which doesn’t sell as well as it used to and they are saddled with debt and stock. We made over £500k in July alone and August looks to be the same so we are flying.

My choices are to keep going and leave the U.K and take tax residency in Dubai or Monaco (prob too poor for Monaco), stay in the U.K. and get fleeced for tax or sell the business and let someone make it an even bigger monster.

Wouldn’t mind hearing your thoughts - I enjoy my work but have no time for hobbies or interests currently - self made so don’t have anything to fall back on and still scared of waking up skint

Thanks for reading - would love to hear what you’d do in my boots.


P

[Fusion777]

What do you want the outcome to be- more money? More spare time? A larger business? Fewer taxes?

You’ve got lots of options, but it doesn’t seem too clear what you want the result to be.

[Neveroutgunned27]

I need to think about that the approach from the p/e firms got me thinking about life post a sale and it has some appeal. The flip side is I’ve spent every hour god sends working and would probably miss it.

I’d like to have some time for something other than work though.

[Simpo Two]

How old are you? Is retiring with a vast pile of money and living happily ever after an option?

There are plenty of interests, hobbies and stuff to learn out there to keep you and your brain active.

[marky1]

If you consider moving before a future sale a possibility you might want to look at Gibraltar.

[marky1]

If you consider moving before a future sale a possibility you might want to look at Gibraltar.

[deggles]

It sounds like the business isn’t solely dependent on your unique personal skills or input, or you wouldn’t be getting chunky PE offers. So surely the sensible thing to do is hire someone in to do your 12-hours-a-day job while you sit back in an owner/director capacity and watch the money roll in?

[CLK-GTR]

Have you considered an AIM listing? If you're talking £4m net income you would easily be big enough and there is no minimum float on the alternative market.

[ikarl]

just.... well done!

I enjoy hearing about people properly working hard and being successful - hope you have some nice cars etc...

Someone has already mentioned Gibraltar.. but for me, I'd be off to the Isle of Man - love it there!

[Neveroutgunned27]

Ah thank you - very kind replies.

I can ‘run’ the business from anywhere in the world
- much of our business comes from social media and I’m quite good at marketing via IG. I’m in my mid 40’s and have good health.

I’m too much of a control freak to trust someone else to run it - I know deep down it wouldn’t work. Sadly

[wilksy61]

I've sold my business without private equity, not quite as rich as yours but still reasonable as far as I'm concerned, in a nutshell I answered a couple of letters that were asking if your business was for sale - these were from individuals not equity companies.

I had two that were very interested and I chose the most local to the business (around 15 miles), I also offered the company to one of my employee's son but they came back to me with a no, however they now wish it had been a yes and are in the wings with finance arranged should the current sale not complete (I don't think this will be the case)

The deal is structured with a deposit upfront plus the remainder paid to me monthly over 5 years (this will be interest free, this is my decision). I will have a debenture in place and the new owner will need life insurance to cover the debt.

I will be remaining in the business until 7th March 2025 (my birthday), but will be available for advise via phone or email etc.

I will then be trying to retire in Spain and the UK, flitting between both as I can without overstepping the 90 in 180 rule.

[doogle83]

Neveroutgunned27 said:

I’m too much of a control freak to trust someone else to run it - I know deep down it wouldn’t work. Sadly

It probably would, maybe not as well as you would do it, but you have to accept that and be ok with it before thinking about selling up.

If you're not in a rush to sell then you're in a great position to negotiate. This helped us massively.

We could be firm on what we wanted, things that were non-negotiable, and ultimately would have just walked away if they got silly trying to chip the price.

I can't remember the names that came up, but there are places that will match up wannabe CEOs / Investors with owners looking to exit so that the succession part is taken care of and you can walk away sooner. (... because IME, your sentiment on having a boss again is spot on).

[skilly1]

Is an EOT an option. You can take all money out tax free, current cash in bank and sale value (business would pay you out over x years). You can retain some equity and you can continue to work and run the business but under a trust. The trust owns 80% of the business and you can be on the trust as well as others.

There are plenty of hoops to jump through, but no more than selling to private equity and you are effectively still running the company how you want.

[TownIdiot]

I'd be very tempted to take some significant money off the table now whilst the going is good.

At the level you are talking about you really need to be talking to an international tax specialist who can lay out the options.

I am always wary about making decisions purely around tax as I know some people who have let it rule their lives, but it's never a bad thing to know all your options.

[Olivera]

What's the nature of the business? Your opening post is all waffle.

[Neveroutgunned27]

Deliberately not mentioned as it’s irrelevant, but thanks

[CLK-GTR]

Neveroutgunned27 said:

Ah thank you - very kind replies.

I can ‘run’ the business from anywhere in the world
- much of our business comes from social media and I’m quite good at marketing via IG. I’m in my mid 40’s and have good health.

I’m too much of a control freak to trust someone else to run it - I know deep down it wouldn’t work. Sadly

Then PE is not for you as they almost certainly would not have the same goals in mind as you.

I mention AIM purely because you can sell as much or as little as you like, and as long as you retain a controlling share you are still the boss. The downside is that you will need to meet certain reporting obligations and it's not free.

Anything short of a full sale is going to end up with you having to answer to somebody else, at least to some extent.

[Neveroutgunned27]

Yes, understood and thank you.

Suspect this is why I’ll keep things as they are and simply move away from the UK personally - I’ve not had a boss for a long time and would rather make my own mistakes I’d say the only thing that would work is someone buying the entire business and retaining me for a period perhaps with some conditions but over 6 months to a year - I could just about stomach that.

[TownIdiot]

As you have a family you need to consider how they feel about that.

No pointed having a more money but not being happy.

Of course not being around your family may be a good thing, in which case it's a double win.

[Puzzles]

Congrats, maybe when it’s done you can write up a post giving more details.

Have you looked at companies which may not be competitors but that your business might slot in well and complement their offerings?