Selling Your Business : It’s Nothing Personal

I’ve sold a handful of small businesses over the years and spoken with a few people who have done the same, or people who wish to. So I would like to share with you a few key things I’ve picked up along the way to help you through the process, should you be lucky enough to be in a position to sell your business.

It’s Nothing Personal
As the title of this post suggests, the most important thing to remember is that it’s nothing personal. The buyers solicitors are, without exception, going to try and make you look like a liar, they are going to try and twist every little thing they may find or that you may say, and use that to try and drive down the price for their client. It’s their job and it’s nothing personal, so just accept it and keep calm and professional at all times. The moment you lose your cool you lose control.
This also goes for the buyer too, they are looking for a good deal, a bargain. They are buying an asset which they will want to make money from, so they are simply negotiating. So with every negotiation if you are prepared and know what to expect, when it happens you are not surprised and you don’t take it personally. You may have worked on building your business for years and years, but that is all history and it’s doesn’t matter. All that matters know us what your business is now, and it is only worth what someone is willing to pay for it. No-one really cares what you think your business is worth, if no one is willing to pay that price for it then it really isn’t worth it. This is business.

Prepare To Sell
This may sound obvious, but prepare your business for sale. If there are any potential skeletons in the closet don’t hide from them, deal with them. If the business needs you, restructure it so it doesn’t need you. You need to be surplus to requirements, and if there are any unhappy customers to other issues face them head on and make them happy or the situation resolved.
Also, prove how profitable the business can be without you. Don’t waste money on things not absolutely necessary, and if there are staff which need to be included in the sale make sure they are happy and in place, and on board with any sale which you might be planning. If the staff are not included in the sale, then again ensure they support you in your plans. Perhaps have in place alternative arrangements in place to look after them (other jobs, share options, etc)

Plan Your Buyers
Like with any product you wish to sell, you need to know your target market. So research to find who your ideal buyers would be, and why would they be your ideal buyers. Why would they want to buy your business, and how much would your business be worth to them. Gone are the days of crazy multiple markups on turnover, be realistic on a markup on net profit.
Start courting your potential buyers, if you don’t already have a relationship with them start creating one. Work with them on joint projects, or if they are competitors (competitors can often make very good acquirers) start sending them lots of work which you cannot fulfil, showing them your business is a good source of revenue for them.
This process can take a year or more in the planning, but once you have created that relationship then maintain it, but not with just one company but several. Remember nothing like a bit of competition to create demand and drive a better price, because as much as they will be looking for a good deal so are you. Remember this is nothing personal, it’s business.

Prepare For Due Diligence
I touched on this a moment account about skeletons in the closet, but in basic terms a solicitor is going to turn your business upside down looking for any chinks in your armour. An accountant is going to scrutinise your company accountants looking for anything to question, anything which could be not quite right. They are both doing their job, so you need to prepare for this. The main parts are to prepare your contracts with everyone from suppliers to customers and ensure they are in order, ensure all staff contracts are in order, and ensure all your accounts are up to date and accurate. Furthermore, you can help yourself by preparing some key documents;
Prepare a key facts document which will include headline information of all financial and business information for past 3 years. This will be typical management information on your accountants, customers and any contracts you have in place with outside parties. Also include any pipeline opportunities being worked on, with realistic percentages of coming off. Perhaps breakdowns of where the business income originates from, for example of 80% of your business comes from Google SEO rankings, as some buyers may see that as an opportunity or others may see it as high risk. You need to put that sort of information up front rather than be embarrassed and put you on the back foot when it comes out during due diligence.

Put Up The For Sale Sign
When all your homework is done, when you have your potential buyers interested, and you have your business prepared, you need to put up the sign. Now there are several ways to do this, such as getting an independent accountant to send out letters to prospective buyers in private, or engaging an agent, but I prefer the full on frank chat approach. Nothing beats sitting down over a beer or coffee with a potential buyer and laying your cards on the table and asking them outright “I’m looking for an exit and I’ve got a couple of people interested, I’m looking for the best price, are you interested in putting an offer forward?”
Plant the seeds, have the conversations, and then start the game of poker. Keep calm but not arrogant, remember you do actually want to sell. Just like in an eBay auction have your target price and minimum price in mind, be prepared to give a little but remember if it reaches the point of not worth selling be prepared to walk away if the deal isn’t right.
You will be expected to sign warranties, you will be expected to support a hand over, you may well also be expected to work for the business for a few months or years, be prepared and expect these things.

If you keep your calm, if you negotiate well, and if you prepare well, once it is all done and dusted enjoy the fruits of your work and your windfall.
Then it all starts again with your next business :-)

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Don’t get too attached to your business

gty_inheritance_jp_120618_wblogIf we were talking perhaps 10 or so years in the past when I was still fairly new in running my own business I would have bestowed the virtues of holding the all the cards. How important it is to remember your business is YOUR business, don’t bring in any shareholders unless you really have to, and build up something great for your children to take over. Then I realised how my attitude had changed as I listened to myself offering advice to a new business owner at a NatWest event I was supporting a couple of weeks back. I was giving this gentleman the very opposite advice. He made a point that he was growing his business to be his children’s inheritance. That was his argument as to why the bank should lend him some money.

Now I have a very different opinion on bank lending, in that I am a firm believer that banks must not lend businesses money unless the business owner also stumps up some cash and/or puts their house up also. Whatever it is the bank should have security and commitment from the business owner, but not everyone agrees with me. Fair do’s, we all have our own opinions :-). As for this chap growing his business for his children to take over…

My personal opinion on this topic is;
Your business is just a vehicle to achieve an objective, and pretty much that objective would usually be one or more of the following :-

  • To provide you with a financial income.
  • To give you a sense of purpose and achievement.
  • To fill your days with something to do.

Now just like a vehicle such as a car, if it ceases to work then repair it or replace it. Don’t get emotionally attached to it, and for heavens sake don’t burden your children with it. Let them learn and make their own decision on what they want to do, which may actually be to work in your business but let them make that decision. Just ensure you make all your business decision on the known here and now with what you need to achieve from your business. Is it providing you with the required income, sense of achievement, is it filling your day … is it working? If it isn’t working then fix it, in whatever the right way to do that for you and the business is now.

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Too young to start a business?

My 11 year old daughter has decided she wants to start her own business so that she can earn her own money to buy her own things. She took it upon herself to use the home computer to design her own logo, design her own brochure/flyer and even set her own price list (with some guidance from Mummy).

Molly-Ann showing our dog Marley at the Kislingbury village dog show.

As her parents we’re really pleased to see this entrepreneurial spirit in our daughter and have really encouraged her. She has set-up her own little dog walking and dog training service, something she really enjoys doing with our own family dog Marley and clearly has a knack for. By providing her the encouragement to do this, without pushing, its helping her develop her independence and also to associate work with reward. When she can buy something she wants with the money she worked to earn she would have learnt the value of it.

However not everyone shares this view and some believe she is too young to be doing this, so how young is too young? She decided to do this herself, perhaps inspired by seeing her dad run his own business, but nonetheless she came up with the idea herself. My personal view is it doesn’t matter what age a child comes up with their own business idea as a parent you should allow them to pursue it irrespective whether you personally believe in the idea or not. What is important is to support the child and guide them to think of their own ideas, see things through, and even learn from their mistakes. If it doesn’t work help them understand why it didn’t and then encourage them to try again learning from those mistakes. If it is a success let them enjoy the rewards of the success.

We’ve naturally ensured she only delivers her flyers to close friends and family so we know who she would be working for, the dog training would be in our garden, and the pets she would be looking after are ones we know she can handle. These are natural parental precautions to take and should always be taken and if your should wants to start their own business it is sensible to ensure it is something they can safely do.

I do not believe any age is too young for someone to show flair to start their own business and it should always be encouraged, but as a parent you should calculate the risk involved dependent on the situation and be a cautious parent and a supportive mentor if your should wants to start their own business. Who knows where it could lead them!

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Employee v’s Employer : Becoming Self Employed

If I hear another politician saying we are a country of Entrepreneurs and that there is an Entrepreneur in everyone I’ll kill them and claim diminished responsibility, but that is how they keep preaching we are going to get out of this recession. Apparently sending a load of lambs to the slaughter in the name of economic recovery is the way forward, so I’ve decided to do my bit to help those lambs make their mind up. If you are wondering whether becoming an employer instead of an employee is the way forward for you I’ve decided to write this little “Employee v’s Employer” comparison document just for you.

Here are a few little comparisons of what life is like between being an employee compared to being an employer.

  • Employee occasionally works late they’re showing dedication and commitment.
    Employer always works late.
  • Employee treats themselves to a new toy/car/holiday then they worked hard for it and deserve it.
    Employer treats themselves to the same they’re obviously milking the business funds for their own benefit.
  • Employee makes a mistake it’s because the employer didn’t train them properly or they’re under too much pressure from the employer.
    Employer makes a mistake then that’s typical of dumb management to the amusement of the employees.
  • Employee moans or bitches about the employer they’re entitled to let off steam.
    Employer moans or bitches about employee its unprofessional and probably illegal, see you in court.
  • Employee works through their lunch they’re showing dedication and commitment and employer owes them that time.
    Employer recalls a time back when they were an employee where they took a lunch break.
  • Employee has lots of work to do then the employer is putting them under unnecessary pressure.
    Employer always has lots of work to do, so what?
  • Employee contacts employer outside of working hours they’re showing commitment.
    Employer contacts employee outside of working hours its harassment.

It doesn’t end there as if the employee is showing signs of stress or is unwell the employer is duty bound to ensure they are Ok, offer support, send them home or the likes. If the employer is showing signs of stress or is ill then they just suck it in and stop moaning because quite frankly no-one cares. You cannot afford to be off with stress or any long stretch of illness because the employees depend on you.

What about balancing the books? As an employer your thoughts will be along the lines of ensuring the rent is paid, the rates are paid, there is enough money left of the Corporation Tax, the VAT bill, the PAYE bill, not forgetting the suppliers, the insurances, the utility bills, and of course the employee wages. If there is anything left over then perhaps you will be paid too. As an employee that list is simply “it’s payday this week isn’t, great” and any thought of the other items is…what other items?

Don’t worry though, if you work really hard and become a truly successful employer employing lots of employees then the employees get together against you and form a gang known as the Union to really screw you over.

So, do you still want to become an employer?

Personally I wouldn’t go back to be an employee and believe it’s the best decision I ever made, but it isn’t for everyone and you need to go into it with your eyes wide open. Being an employer is a very lonely place to be; it’s all on your shoulders and no-one cares but you.

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Record Numbers of New Companies Registered

I attended a Companies House meeting last week, a regular event for me, and they do like to cross of the highlights right at the start. They make for some quite amazing reading though;

Year to date the number of new companies being incorporated in the UK is up 7%, and more so that is up on an already previous record. Last year they was up 6.5% by the end of March 2012 with 426,500 new companies incorporated in that financial year. At the time of releasing this information their February figures were showing between 40-41,000 new companies would be registered in that month!

Also in February their register at Companies House broke through the 3million active companies number, yet another record. Out of those 3 million companies they state that 2.8 million are active, but it is worth noting that this doesn’t mean all 2.8 million companies are up and trading. By “active” they mean the company has active filings which can include dormant filings, but it does mean that there is someone behind the company looking after it for a purpose.

These figures are quite staggering, so much so that the government department BIS has decided to conduct an investigation into why the numbers are growing so. I’m personally very interested to see the findings when they are published and not just because I own a company formation agent; more that I’m not entirely convinced it’s all going to be new entrepreneurs kick starting the economy as the press releases would imply.

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Remaining Professional At All Times

I’ve just been to a local bank to have my ID verified for a new business I’m involved in, and that business isn’t banking with my usual bank so quite naturally they don’t know me. Something happened at this bank that I see so much from young people in particular, but also more mature people too and these people need to learn it reflects more badly on them than anyone else.

Never, and I mean NEVER, moan about your employer or your colleagues to customers.

All this does is make you look bad, not you employer or your colleagues. It’s unprofessional and it makes you look like a whinger. The more professional approach if something is going wrong is to apologise to the customer and explain you’ll investigate, or if you don’t understand something just say you don’t and explain you will go and find out from a colleague who may know more. Never be afraid to say “Sorry, I don’t know but I’ll find out for you.”

I left that bank thinking no differently about the bank itself, but my opinion of the young girl who served me is that it’s such a shame that she is out there creating a bad impression for young people wanting to get into work.

Caveat : There is also an argument that her management should be supervising and training her to ensure she is more professional, but the point of this blog is aimed at young people to encourage them to think professionally in all situations. Sometimes whatever your personal thoughts, it is often inappropriate to share them with customers.

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10 Years On… Part 3

I finished my last blog post at the start of 2005, mentioning during 2005 we got a few awards and moved from our second home into a proper office. I also mentioned that was when I purchased UK Business Forums. The start of 2005 was very much head down as I was looking to recover the money lost in the legal wrangling I mentioned before, during this time was when I first started venturing out into the public doing a bit of networking. I first started with some friendly networking through the Northamptonshire Chamber of Commerce before being introduced to BNI – which I stuck with for a whole year and a half before calling it a day, even doing a stint as Membership Coordinator. That basically makes you the most hated person in the group! During that time I reached the point where I was attending at least one networking event a day, often more. It was crazy and I didn’t realise how much unproductive time I was wasting not monitoring my return on investment. Don’t misunderstand me, I’m not saying networking is a waste of time. I’m saying that you need to treat professional networking like any other marketing activity, you need to ensure you are attending the right events and making the right connections.To often and I saw so much of this, people get sucked into feeling like they need to attend every event going and before they know it they start attending more for the social aspect than the business aspect. You pay to attend these events, it costs you money, so you need to be sure you are covering your financial and time investment in networking.

In May 2005 my son arrived, an amazing time and it was great for me to still be working from home at that time. Not only to be around him as a baby, but to be on hand with my wife sharing the experience. I feel for so many fathers in particular you miss out on these times because they need to be back at work within days, although I do appreciate many working mothers are often back at work too in such a short space of time. Later experiences have taught me how valuable family time is, whether you are a parent or a couple you don’t get time back. There is so much pressure in today’s world to give up your soul to the workplace and it achieves nothing, you may end up running the largest business but have the loneliest existence.

Towards the end of 2005 the awards started flowing in, the news clippings have us highlighted as being nominated for record numbers of awards with us winning 3x awards and Highly Commended in two others. We really enjoyed the time putting on the posh frocks, the glitz and the publicity. I’d be lying if I didn’t admit to enjoying the attention, being recognised when going to a bar or networking event, being called up by the local radio or papers for a comment on something or another. Being a ‘ickle mini celebrity was fun, but again it didn’t directly make any money so I needed to focus back on the business.

It was about this time I also picked up an idea from accountant Graham Keeble of GKP, when I received a letter from him explaining that instead of sending Christmas cards they made a donation to a local charity. Perhaps it’s the Dutch blood in me but I personally don’t like the amount of wastage with sending corporate Christmas cards. They go in the bin first thing when we return to work in the New Year and often never get past reception, such a huge waste of money. I feel the same with personal cards to a degree, in Holland you only send cards if you are not going to see the person near the time – so it’s a way of saying “Sorry I haven’t seen you in a while, but you’re not forgotten”. So I don’t see the point in buying a birthday card for my neighbour, my wife or kids, etc. I see them every day, so I just wish them Happy Birthday. Of course, I do buy cards because my wife would kill me if I didn’t :). As for not sending corporate cards though, what a great idea! Why waste hundreds of pounds on sending cards when instead give the money to a deserving charity. So far we’ve donated gifts and money to schools, donated to the Air Ambulance, and donated to a couple of children’s charities. I prefer that, and that is when we stopped sending corporate Christmas cards.

The following year was pretty uneventful in regards to news stories. I won a personal award for “Championing Change” which was nice, and Quick Formations was runner up for a national SME of the Year award. Short of that though, the team started to grow and I took on a couple more staff in our new office. Things were really looking like we were rocking, the team coming together well and I was enjoying what I was doing…until.

January 2007, in fact on New Years day Pauline, my mother-in-law I’ve mentioned a few times in this story, collapsed with a brain haemorrhage and was declared brain dead on the 2nd January after being in ICU for more than 24 hours. This completely shook our lives upside down, and really changed the way my wife and I went forward in our personal and business life. For the first couple of months we were good for nothing and if it wasn’t for our new staff the business would have been unlikely to have carried on. Perhaps just an emotional event of the time is that one of my staff, Rebecca Noton, continued to run the office whilst I was absent despite unbeknown to me her own mum was in hospital at the time. As soon as I found that out I told her to leave immediately to be with her mum and I started to pull myself back together and work, but it was a long long time before Lesley was back.

I’m quite a spiritual person. I wouldn’t say I believe in the benevolent being but I believe in a deeper understanding of the soul and what is around us, and be it coincidence or Pauline’s spiritual influence, but within weeks of her passing I found myself in negotiations for the sale of UK Business Forums for significant sums of money. A few months later I sold Quick Credit Reports, and then immediately after that I sold Quick Telecom. It looked like I had a plan but to be honest I’m not sure if I did have a real plan at that time, but I was offloading aspects of the business which were not making a real high value return.

Was this her influence? Dad I somehow triggered these events of my own actions? I genuinely don’t know but what this did do was put us in a much strong financial position to enter 2008, and the up coming Global Financial Crisis.

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10 Years On… Part 2

Following on from my previous post, which I’m pleased seems to have been very well received, I’m going to continue from July 2003 and what the next couple of years had in store for me up to the beginning of 2005. If you haven’t already read the start of this story, you should get up to speed with starting 10 Years Later…Starting Quick Formations.

Missing from my earlier blog post mentioned above was that during those early months of 2003 I had received three offers to buy Quick Formations, a company that was on the verge of going under despite doing a stonking volume of trade. I was forming more than a couple of hundred Limited companies a day, from my kitchen, so on one hand I knew something was going well but I still couldn’t understand why the such prompt interest to acquire my new business. This interest made me realise I had something but I didn’t know what, but it gave me the determination to plough onwards.

I had also started doing a bit of I.T. consultancy and development under the name of Ozzy IT to get some money coming in previously, not much although I did start doing some work for the World Health Organisation and DfID via an agency…who ended up not paying my final bills, going into administration, and stinging me for just over £3,000. Thankfully, by the time this happened Quick Formations was back on track and I was grateful for having less consultancy work and more time to spend on Quick Formations.

The relief my wife and I had after that meeting with Barclays was amazing, and with all this money now in the business account I started pushing our Internet advertising even further. In those days Google Adwords was pretty big, but the best converting advertising was with a firm called Overture (which later was purchased by and became Yahoo’s Pay Per Click advertising channel). That is where most of my money was spent, but initially there was only two advertisers on there for company formations, my firm Quick Formations and another company who appears to no longer be in business (I did try and find them to provide a link here).

What was interesting in Overture is that you could see your competition and what their highest bid was on a search term, and then you could outbid them if you wished. This led to me and this other firm outbidding each other until we reached silly figures per click, so in the end I rang the guy up and we agreed to swap weeks. One week I would be number one on MSN Search, the next week he would be, and so on. It worked great, we saved a fortune in PPC and each Monday we modified our bids and swapped positions, the end result being we both made more profit.

Shortly afterwards @UK PLC started doing Pay-Per-Click and they joined our party for a couple of weeks, but very soon again someone else started, and another, and so on. The other chap rang me up and we agreed it wasn’t going to work any more so we started doing our own thing. It was great whilst it lasted though, despite perhaps this sort of thing not being in the search engine’s favour ;).

It was around this time that I realised I couldn’t solely rely on Pay-Per-Click advertising, so I started spending more time doing promotional activities using skills I’d learnt from my previous business. Taking part in mailing lists, newsgroups, online discussion forums, all things that today have become known as Social Media. What was to my advantage though was that this sort of marketing activity was completely alien to everyone else in the company formation industry. Within a few months I’d created a huge online presence for Quick Formations, and my website was being recommended by hundreds of people a week, creating thousands of inbound links to my website. By chatting to people online and answering their questions publicly I’d created a human face to an online business.

It was then that I had the idea to enter some business awards, strangely feeling very confident that I would get some awards for it too. The first was the National Business Awards, where I made it as a Regional Finalist for the Best Use of Technology. I was gutted, being someone who is very driven and hungry for success, not winning felt like a failure. Still, I entered some more and spent more time working on the application process, this time understanding what the judges were looking for and how to word my answers appropriately.

I’d also started thinking about what all these new companies I was setting up might need, and what experience I had in various sectors to start offering them. The first was telecoms services, I had experience of working in the telecommunication sector having initially done much of the setting up of Skycom and I’d learnt a bit about it with my previous Internet business too. I was also aware many of these businesses would be one-man bands like I was, so things like 0800 phone numbers and Fax-2-Email services would be quite interesting. So I set-up Quick Telecom and piggy backed on the back of a Telecoms company called Inweb who’s owner I knew from old (although he has since sold out to Edge Telecom now GCI Telecom. I met Andrew the owner for a beer to which he broke it to me, if he’d know Netrotech was up for sale he would have offered me half million for it. Oh that was great to hear – not!). This Quick Telecom venture went like hot cakes, mainly the Fax-2-Email service and it was such easy money. I did next to nothing and earned a revenue share from Inweb.

A few month later I met a guy who has since become a very good friend and business partner of mine with New Start Data, a chap by the name of Dan Hancocks. He was a sales manager for a company called Wyse Assist, although following a Management Buy-out he now owns that company in partnership with a man by the name of Richard Hogarth and they renamed the business to CoCredo (Co for Company and Credo being Latin for Trust). He put the proposition to me to offer company search and credit vetting services, and thinking small businesses would want to check the credit worthiness of their clients I set-up a Quick Credit Reports. In this case just because I had been stung this turned out not to be such a great hit but I kept it going anyway.

I also started heavily promoting participation in UK Business Forums to my customers who used Quick Formations to form their companies, encouraging them to network online for support and finding new clients. It worked a treat and the membership of this other guys support forum began to grow.

Unfortunately, around early 2004 the sharks started coming out of the woodwork. I’d noticed that I’d started getting a lot of web traffic from the same broadband IP Address for a company formation agent based on the south coast of England. A few telephone calls later and I was having regular friendly telephone conversations most evenings with a friendly chap.

Now it is worth me mentioning here that the IT industry, the business sector I am used to dealing in, is a very much knowledge sharing industry. Technical people help out other technical people, even if they are competitors they will point each other in the right direction to solve a problem. It’s how I work naturally, and it is what I am used to doing in my working day. So in my several times a week chats I had with Mr. X I would share with him ideas on how to help improve his website, how to improve his search engine rankings, and how to improve his web conversion rates. He would tell me bits information here and there in return, which at the time I knew wasn’t much but I didn’t think anything of it. Here was a friendly guy, I’d made a friend in this new industry.

Another friend of mine who I’d known for a few years, Tony Byng, was running a company formation website on the back of my software. Mainly because he had written most of it too, and he had a website called Direct Formations as a play on his then company name, DBF Systems so he called his setup Direct Business Formations. My new friend, Mr X, started asking me quite innocent questions about my software which foolishly led onto me mentioning Tony’s website. This was towards September 2004, so my new friend had been having chats with me on the phone several times a week for about 6 months by this time. he was playing the long game, but little did I know what he had in store.

At the end of 2004 I was very active in the online community and was becoming a bit of a networkoholic online (still not going to any face-to-face networking events), and I was become exceptionally active on UK Business Forums which had been set-up by a web design company, as well as Ecademy another online networking website that had recently started. Business was doing really well, but I did have one small problem. I wasn’t making much money, although I was spending not much short of £100,000 on marketing activities with the majority of this being Pay-Per-Click. I do did get some nice Christmas presents from Google though, a lovely weird lamp and a clock if I remember correctly. This will become apparent why this was a very big problem in a moment.

My wife and I decided we needed to move house because it was becoming extremely awkward with my still working in the kitchen, and we were aware that we needed to consider taking on a member of staff to handle the dispatching of client orders. The two of us working to the early hours each morning printing and packaging documents, we decided to sacrifice some of our income to pay someone to do that for us. We wanted our evenings together back again. With this in mind, we started looking at moving from Luton to Northampton, with the plan to take on an office. In reality we purchased an “Executive” home which has already had one of the garages converted into a home office, which was ideal because I didn’t want to give up being at home with my daughter… and we had another baby on the way. We moved in to our new home in October 2004.

Two months later Mr X sued me for passing off, a week after I got the letter from his solicitors I got a letter from another firm of solicitors suing me for infringement of Trademark. I very quickly learnt from someone else in the industry, as by now I’d got to know a few others, that these two were in each others pockets. I appointed a solicitor and the legals started, with a very long drawn out process of getting to caught. My wife was heavily pregnant and was having panic attacks, distressed that we had just moved taking on a much higher mortgage and these people were attacking us. The legal fee’s were costing a fortune, but it was going on and needed to be dealt with.

At the same time the other form started suing my friend for Passing Off, and I will say now that Tony is the kind of guy who wouldn’t say boo to a goose. Not the healthiest of chaps with a number of health problems since childhood, but it came to light that used in evidence was snippets of conversations I had been having with Mr X. as he had been using me. I wondered why he’d stopped taking my calls towards the end of 2004. This other firm almost sunk Tony’s business, forcing a guy who’s been self employed working from home since 1994 to change his company name he’d been using since 1994. Purely because he didn’t have the finances to fight it.

I’ll summarise this whole experience with how it closed. Mr X was paid a couple of grand to go away because at the time I had been bidding on Adwords which contained his company name (which is common practice in all industry sectors and competitors are bidding on my company name on Adwords as I type this now), but for the sake of my wife I paid. I couldn’t sit and watch her suffering the stress and anxiety she was going through. Once that had been paid the other firm sent a proposal to my solicitor, agreeing to “settle out of court for £50″. Yes, that is not a typo, that was fifty pounds after costing me thousands of pounds of legal fees. My solicitor said at the time they’re just trying to hurt your business or ideally put you under.

That was the only time in the history of Quick Formations that I almost shut up shop. I was going to post the source code of the software I’d developed up online for everyone to access, and just call it a day. It hurt me to see what my wife went through during those months and I really wondered whether it was worth it, but my wife bless her was very determined not to let them when. She told me don’t you dare give in and insisted I continued to fight it, but as I say it came to a point where I wanted to get on with my life and move on.

The start of 2005 did bring with it a life changing event though, I purchased those Internet business forums I’d been taking part in called UK Business Forums. Gary, the guy who started them, decided that I was doing more to grow the forums than he was able to so asked me if I wanted to take them over. I couldn’t put my finger on why at that time but I just had a hunch they could become something big, a community of small business owners interacting with each other online just seemed such a fantastic idea. This was also one of those business decisions that my wife did actually agree at the time as being a good idea.

I also started entering more business awards, paying that close attention to what I now knew the judges were looking for, and pulled a large part of my online marketing spend. I’d just had a huge financial hit on my business which left me with nothing and I needed to recover, with a baby on the way and a new higher mortgage. It was also at this time I started smoking for the first time in years, although thankfully I quickly stopped again as soon as my son was born.

We took on our first member of staff to handle the printing and dispatching of our clients orders so that my wife and I got our evenings back again, and not long after my wife’s parents followed us up to Northampton my mother-in-law started working for us a few hours a day.

Those couple of years taught me a few more lessons. The first lesson is one that is perhaps old hat now yet so many businesses still don’t embrace social media, although when I was doing this the term Social Media hadn’t been invented. As a small business the Internet creates a level playing field for everyone, and by utilising social media any small or large business can compete with each other equally. It was big when I was doing this and to see how the use of what I called “networking online” has grown has been phenomenal. The important things to remember though is the same rules of etiquette apply online, do it wrong and people will dislike you very quickly. I wrote a blog post years ago about this topic so if you would like to know more, Get the most out of using a forum and then another blog post much later about Social Media. The most important bit I would like anyone to take away from this is, Use social media especially if you are a small business trying to compete in a big market. However, use it correctly and it will help you grow your business for little or no financial cost. I always say Social Media is the biggest influence and vehicle I used to grow Quick Formations.

The last lesson I learnt in this chapter is one I have learnt but chosen to ignore, and that is don’t trust anyone. The reason for this is because despite a few people telling me to not trust anyone, assume everyone is out to get you, become a hardened git, I believe that is wrong. I am who I am, my friends like me for who I am, and my family stand by me for who I am. If I let everyone who tries to kick me down change the person I am then they have won, so instead my advice is don’t let any negative experiences of life change the person your loved ones love you for who you are.

The year 2005 held a few more events for me and I’ll come onto those in the next blog post, trying to keep these bits as short as I can really. I know for a blog post they’re technically longer than they should be, but heh you are free to choose to read or ignore :).

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10 Years On…

I’ve just been writing my latest newsletter for Quick Formations, and part of the story for this newsletter is that the company turns 10 years old in September; and the newsletter had a very big risk of turning into a blog. The reason is because I’ve learnt so much, I’ve experienced so much, and I thus have so much to say about what the past 10 years had for me. I feel quite proud to be able to say I own and have run a successful, multi-award winning, business for 10 years and that I do still own it and that it is still trading. So with so much that I feel I have to share, perhaps for this blog post I should start at the beginning.

Quick Formations was not my first business, nor my second actually. I’d dabbled with a bit of buying and selling portable computers (before laptops), fixing and maintaining a few peoples computers and networks, and then my first real company was called Netrotech Limited. A website design company which grew into an ISP (Internet Service Provider) offering internet access, email and website hosting services in the days before broadband. Although that company has a number of success stories, some cracking deals, my real claim to fame is my work I did with a guy in America building the first website where people could bulk buy domain names, sell/trade them, and control them online through a basic control panel. That website was NiceNames, and really led the way with effectively printing money. I’d wake up each money having sold hundreds of domain names overnight and made a small fortune.

That company ran for a couple of years before it was absorbed by a company called Skymarket Limited where I became a Director and Shareholder in return for the shares in my company. I learnt this week that Skymarket sold for over £1,2m this year and my wife asked me whether I regretted leaving there, with nothing, to start Quick Formations. The simple answer is no, because although I may have done quite well out of that deal it would have taken 10 years. That is 10 years of the reasons why I left, which to be honest would have been a stretch. I also wouldn’t have the family life I have now, the business I have now, and of course I wouldn’t have built and then sold UK Business Forums. I’m never one to worry about the What If’s in life, you have to make the decisions you make with the information you have there and then. Once you make it, commit to it and just go. If you spend too much time always looking back and wondering what could have been you’ll likely to crash.

At the time giving up my company Netrotech Limited would seem a mistake, I effectively lost everything at that moment meaning I had to start Quick Formations on a personal bank loan and three credit cards. It hurt at the time, but jump forward 11 years since I lost Netrotech and I’m writing this blog to you now the owner of two companies, investor in a couple of others, and with a great social media success story behind me. Everyone makes mistakes in life, and I’ve made a few such as that one. The secret is not to regret your mistakes but instead learn from them, chalk it down to experience and move on, which I know is easier said than done as I have been there. Take it from a going grey, wise, getting older man who has made a few bad business decisions in his life :).

Anyway, back on track, I made the decision to start Quick Formations despite my accountant advising me not to. He warned me I had no experience in the industry and I should stick to doing stuff on the Internet. Well, my plan was to bring the industry onto the Internet in a big way. My theory was create a software platform that could run a business automatically, customers order online and their new companies get delivered by email direct to them – I wouldn’t need to lift a finger. Oh how the best laid plans go and all that, I should have realised this new venture of mine would lead to me working 20 hour days! A few days ago I read a great blog post by Paul Doran which I highly recommend reading if you are thinking starting your own business is easy, it isn’t.

The plan started with me having a business model based on some knowledge I picked up at Skymarket, I wrote the software requirements, and then put that out to tender. Got three quotes back and development started in June 2002 with it aimed to be finished around October. Well currently a long story short I left Skymarket in August, and the system didn’t go live until December and for the first few months Quick Formations trading activities were IT support, website design, basically anything that would put food on the table! I even did a bit of consultative work still for Skymarket. We actually got our very first company formation order on December 24th 2002 for a company in Flitwick, but when the floodgates were opened it flowed rapidly and by February 2003 I was in real trouble. We were over trading, Companies House wouldn’t give me a credit account as a new business and the bank was holding onto the funds from customers card payments for 3 months as security against Internet payments (the banks got badly burnt by the domain name charge-back fiasco of the late 90′s).

In June 2003 it was my daughters first birthday and I will never forget it. I had taken my family to the level of debt I’d never experienced, we were £49,000 in debt by three credit cards run to their max and a £20,000 bank loan for a “conservatory” which we already had. We had the home phone set for incoming calls only, Sky had been disconnected, I had sold the car, and we were just managing basic food essentials. I felt a complete failure that we couldn’t afford to celebrate my daughters first birthday or even get her a proper present, and felt even worse but eternally grateful when my mother-in-law came round our house and laid on a full birthday party for my daughter. Yet despite this, the cause for all this to happen was the success of Quick Formations and the fact I couldn’t fund it.

The facts of what was happening are explained as this. I had to pay in advance bulk payments to my supplier Companies House for them to hold money on account to pay for the future orders my clients placed with me. My clients paid by card but the bank was nervous as I was an internet business, so they held the payments in security meaning I wasn’t allowed to touch it, and I had to pay for advertising through Yahoo, MSN and Google which I was paying for by credit card. The net result is my profit on paper was great, but my cashflow was all flowing outwards.

I was aware that I was going to go bust at any moment, and I calculated I had about 2 weeks of borrowed money left before I went out of business. So immediately after my daughters birthday I went to my bank, Natwest, and tried to negotiate them releasing my money from security, trying to explain that selling Limited companies was not like selling domain names. They had none of it and said their hands were tied as I was an Internet business, and I was aware that within 2 weeks I would be nearly £50,000 in debt with a bust company. So I walked straight across the road to Barclays with the same paperwork I had for Natwest, and laid it bare to the business manager there. I explained that I didn’t need any borrowing, I have thousands and thousands of pounds sitting in a “security” account with Natwest, all I need is merchant facilities with instant settlement. I also mentioned that if I didn’t get any help from a bank within the next 2 weeks I’d be out of business.

Barclays opened my account there an then, they gave me a quick short term loan to keep me going, and arranged the transfer of my account with Natwest. It’s safe to say that this saved Quick Formations, but the bit that grated me about this whole situation was within a week Natwest transferred all the “security” funds into my Barclays account. So much for security requirements, but anyway that gave Quick Formations a huge cash boost for July 2003. That is when the business turned a huge corner and sky rocketed.

I feel I could write a book of what happened just in those few years alone, so many learning experiences, but I’m going to sign off here for now with the key lessons I’d like to share from above.

My first is don’t have regrets. You will make bad decisions in business and in life, things will go wrong, and people will try to do you wrong. It happens, get over it, and don’t look back. Get on with your own life, do the best you can, and everything has a positive even if you cannot see it right at that time. If you spend too much time being negative it will rub off on those around you, your prospective customers will pick up on it, people won’t want to deal with you and you will spiral into a miserable git. Look forward with an optimistic, but realistic, outlook. You’ll find it refreshing and others will like you for it too.

Secondly, when the world is against you, when everyone seems to be out to put you down, don’t panic. There is an escape route, a path to help, even if it isn’t the ideal route you’d like be realistic and find your escape path. You won’t see it with a mindset of panic though, so when it’s really hitting the fan, when you feel like it will be impossible to stop for a moment and think things through, that is exactly when you must do just that. Step away from the situation, breathe, and with a clear head thing things through and be honest with yourself and those you are dealing with about the situation.

I hope this blog post is of help to someone. When I next have a moment I think I’ll let you know a few more lessons I’ve learnt over the past ten years and what they taught me. Please feedback, let me know your thought :)

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Do you deserve it?

As we head into 2012, a year when so money business experts and analysts are predicting tougher times ahead, I can’t help but worry about much of the younger generation who have grown up in a world of expectation. Where they have been told “of course you can have it”, and it is this expectation I feel is just as much to blame for the state of the western world as it is today. Not the only issue, but the only one I’m going to talk about here.

Jump back some 20 or 30 years and the western world had a perceived problem of class, the rich and the poor. So what was introduced to overcome this image, an image of poor people the western world Governments didn’t want the poorer Eastern world Governments to see of their great countries and societies. To solve this they told people without freely disposable income that they could have everything they wanted. If you see something you like it doesn’t matter if you cannot afford it, just buy it on the Never-Never and pay it back as and when you can. So that is what millions of people did, they borrowed money they couldn’t really afford to repay to have all the things they wished for getting themselves into deeper and deeper secured, and unsecured, debt.

I grew up through those times, and as a child I was evicted from homes and had bailiffs arriving at our house to reposes goods or collect cash. I also have quite scary memories of heavies arriving at the door looking for for step-dad, who was never in, not your normal bailiffs. Yet we lived in times where the media was being used to publicise a wonderful world of having whatever you wanted, all for low monthly payments, and keeping up with the neighbours was something which was made great use of by the loan providers under the direction of the politicians’ agenda’s.

The Governments were seen to be stimulating the economy because money was moving, stuff was being bought and sold. What those politicians must surely have known is that they were creating a financial time bomb, but that isn’t the biggest problem. They were also creating a mindset, an expectation and problem in society which in itself was and still is a ticking time bomb. The adult generation of that time lived their lives being educated that it didn’t matter whether they had enough money to buy something, they could borrow money and buy it anyway, and that is how they raised their children. Their children grew up being shown that it didn’t matter whether you could afford it or not, you can have what you want anyway. That younger generation grew up and had children of their own, and what have they taught their children? Simply that debt is an acceptable way of live, and if you cannot afford it then borrow to have it anyway.

Jump forward 20 or 30 years and what do we have now? We have the third generation of children where so many are growing up having been told they can have what they want, when they want, and they expect it. So what will they are are they doing? Exactly what those nice people in power told their parents and their parents before them, that it is perfectly acceptable to get into debt and have whatever it is you want.

It gets better than that for this generation though, we’re now being told you don’t have to repay your debt. You can get the majority of it written off and only repay what you can afford!

Whatever happened to saving up for what you want, and then the satisfaction that when you have saved up hard for something and then get to finally buy it; the satisfaction you get from having worked so hard for it? The reality needs to be accepted by our Governments, by the public, and “those in power” that now economy will be restored with pretend money and debt, and we can learn a lot of good things from the Eastern cultures. If you can’t afford it then you simply don’t have it, but you can aim for it, strive for it, admire those who have achieved it, and anyway; isn’t it good not to have everything you want so you still have things to aim for? Surely that is a great motivator to push yourself to achieve better things.

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