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Selling and Leadership: A blog by Connect Yorkshire CEO Nick Butler

16th June 2017

This week our Masterclass on Leadership was delivered by what must be two of Yorkshire’s best known business people-and a non-Yorkshireman who worked for Unilever for 23 years before he and his wife started a clothing business that achieved sales of £30m before they sold it. Peter Roberts has founded 8 businesses of which the latest is Pure Gym which has 180 budget gyms throughout the country, Jonathan Turner of Bayford has a huge array of business interests and owns Bowcliffe Hall.


The Masterclass covered both succession (internal and external) and sale of the company.


Sale


The key to a successful sale is that the company must be able to run without you, so the buyer does not need to replace you, but can rely on the management to continue to grow the business. And make sure you leave growth for the buyer-they are buying the business to grow it. This means that you don’t have a job at the company by the time you sell it.


Other key features-a few years of profitable growth, plenty of cash in the bank, good productivity (turnover divided by the number of staff or hours worked).


Most people know who they want to sell to-competitors are the most likely. It can take years to find a buyer-networking in your/a related industry helps.


Incentivising your management team is vital. If you haven’t already granted options under a Share Incentive Scheme where the options are triggered by a sale then offer a big cash bonus on the sale going ahead.


Sometimes you need to keep your cards very close to your chest especially if selling to a competitor. Keep the key information-usually about customers and suppliers- right back to the completion meeting.


Succession


Bringing in an outsider as CEO is incredibly difficult. Its is vital to get to know the person as well as you can before you make a job offer. Invite them to dinner, meet their family, take up references, get them to meet the team. The learning curve is long and hard-you must give them the time to adapt.


Internal succession often leads to an MBO by the management team which can be a perfectly satisfactory exit for you.


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