July 1, 2016
The Brexit result came as a real bombshell to friends, family and colleagues with whom I have been deliberating the future of Britain over the past month or so, with many Brexiteers now regretting voting for the side that they never thought would actually win! Brexit will, if it happens in the form we expect it to, change the status quo in so many ways. The economy, the political ecosystem, regional divides, immigration, defence and, concerningly to me, the way in which the British are now seen by our European friends and business partners.
The result was, as it had been forecast, incredibly tight and, post vote, resentment has been building from the losing side (of which I form part). One never knows whether a 2016 General Election will, possibly, in some crazy twist, reverse the outcome. For what it is worth, my views became increasingly ‘Remain’ in the run up to the vote. I had toyed with voting Brexit some months back, but I changed my mind, gradually, when I was sat down quietly with a cold towel on my head and when I recognised the complete absence of detail contained within any of the economic or business proposals mooted by the Brexiteers. My resolve to Remain was strengthened by a number of other matters including an observation of over 70 years of uninterrupted European peace and considered reflection on the numerous benefits that being part of the EU currently brings – and would likely to have continued to bring – to future generations.
What comes next for ‘Great’ Britain is anyone’s guess. New leaders for our two main parties (and for UKIP as of today), a softer FTSE-250 (more important to me than the FTSE 100 for assessing the health of our domestic market), a weakening pound, Scottish independence ‘round two’, 27 freshly negotiated trade agreements, changing immigration rules and a new defence regime to ensure that Putin remains tethered to his Westernmost border. Frankly, there is much to consider.
Many clients have asked me to assess what Brexit means for their business or their impending exit and I thought that it would be helpful to share some thoughts and tips for small business owners to assist them in managing the inevitable volatility in the next few months before the ramifications of this self-harm exercise become clear:
Here at Bluebox, a Brexit Committee has already been established. We did so a day after the result. We have met on a number of occasions and have reviewed our business and the actions that we may need to take to respond to a changing environment. I suspect that overseas buyers will not be jumping headlong into the UK market in the coming weeks or months until things quieten down, but that presents a great time for reflection.
Explore your own growth opportunities, in detail, in the current period of uncertainty and, specifically, in a post-Brexit world. Take time away from working ‘in’ your business and starting thinking bigger picture. Working ‘on’ rather than ‘in’ your business. An exercise in free thinking. Changes create opportunities for sure and there will be opportunities that your competitors will exploit so be a first mover and enjoy the benefits. It is often the case that new initiatives implemented in a changed environment become value-creating in their own right. Being ‘forced’ into the change exercise is no bad thing.
Take decisive action, but nothing knee-jerk. Your team will want to see quick action and it can be a demonstration of strong leadership. You will be looking into the same crystal ball as your peers, but with a deeper insight into the workings of your own business. Consider your opportunity map and growth plans ahead; it may be wise to place some markers in the sand or at least develop some KPIs that can be used as benchmarks to measure future performance.
Undertake a formal ‘International’ trade review internally. Are you aware of the widespread implications of what has happened (or looks likely to happen)?Bluebox has created (and now use as of last Friday) a specific toolkit to consider your reliance on, and interaction with, the International market. Magnified currency movements and volatility, overseas customer and supplier relationships, international members of your management team and other staff and International growth opportunities. It is a great time to consider the way in which your business operates specifically within the ‘International’ ecosystem.
I have heard from numerous ex-clients the importance of cost control in challenging or uncertain times. Clearly it is a matter of one’s appetite for risk, but Brexit (including this period in the run up to the invocation of Article 50) could be a catalyst for a comprehensive cost review across your business. Carrying an overweight cost base in challenging times presents more risk, whilst cutting cost too aggressively may prune the opportunities that are driving value. Balance is important here, but take some time to reflect.
Review the timing for your exit and consider whether you can, or should, wait until the uncertainty passes. My experience would suggest that few deals will be actually ‘completed’ in the summer period, but that leaves a perfect opportunity for methodical planning. Use the time wisely and plan for that Exit. It is precisely what Bluebox specialises in, using our bespoke methodology ‘Blue Diamond’.
In summary, this referendum result will inevitably present certain businesses with certain challenges. The pride I took in seeing democracy at work in the UK has been overshadowed by the result itself. However, as a Nation, Britain is Great. We are innovative and world-leaders. Yes there will be uncertainty in the months and possibly years to come, but this is exactly the environment where winners will be created and business owners will prove their mettle. Use Brexit not only as a catalyst to review your business with a critical eye, but also to capitalise on the exciting opportunities that lie ahead.
“We were delighted with the services that Bluebox offered us. Bluebox’s attention to detail through their Diamond Programme ensured that we were well prepared for when the business was taken to market and that the sale process itself was managed expertly.
We challenged Bluebox with finding the right strategic buyer and thereafter negotiating a deal that met our requirements. In helping initially to identify and to secure the deal with Mountville Mills they accomplished just that. Communication throughout was excellent and professional, managing each stage of the process. I would have no hesitation in recommending Bluebox to any corporate shareholder or private business owner looking to divest their business.”
Richard Millward, Former Client
“We were delighted with the services that Bluebox offered us. Bluebox were challenged with finding us the right strategic investor and, thereafter, negotiating a deal that met our complex requirements. In identifying and securing the deal with LGC they have done exactly that. The process itself was efficient and smooth, largely due to the excellent communication from the Bluebox team, who also demonstrated excellent experience at managing a very engaging auction process. I would be delighted to recommend Bluebox to any corporate shareholder or private business owner looking to divest a business.”
Helen Dickinson, Former Client
It has been a real privilege working with the team at Bluebox over this last year or so. Bluebox’s attention to detail ensured that we were well prepared for when the business was taken to market and the sale process itself was managed expertly. Starting the process, I had no idea exactly what this would entail and the volume of work that has been produced by everyone and the result reached today is nothing short of brilliant.
Hugh Morris, Former Client
We are delighted with the services that Bluebox was able to offer. They showed an intimate knowledge of a deal cycle, managed a tight auction process and were highly communicative from the start. I would happily recommend Paul and his team to business owners contemplating a sale of their business in the next 24 months. Experience is key and this has paid off for us.
Laurence Seward, Former Client
Aligning ourselves early with Bluebox, and entrusting the team to guide us through their process proved to be a highly rewarding investment from all viewpoints. Bluebox’s support significantly enhanced both the value of our business and its ‘saleability’. I would highly recommend Bluebox to business owners contemplating an exit in the next two years. The earlier the engagement the better so far as I am concerned.
Mike Minett, Former Client
We began working with Bluebox in early 2015 through their Blue Diamond Programme, as we were contemplating an exit. We found that the process focussed our minds on the key areas of growth in the business, and prepared us well for the inevitable rigours of due diligence. During the sale process itself, the advice offered by the Bluebox team was invaluable. We found them to be helpful, straightforward and honest.
David Stokes, Former Client
When selecting our adviser, it was extremely important that they had access to international buyers and were experienced in cross-border M&A. The team at Bluebox proved to be invaluable by identifying a strategic acquirer from America who was not known to us and by negotiating an excellent deal for all parties. I was also impressed with the process management from Bluebox, which ensured that the deal was closed in a timely fashion.
Jeff Weinstein, Former Client
When I first engaged with Bluebox, I was hesitant as to the benefits of using an advisor to firstly, find a buyer for my business and secondly, to get a deal over the line. However, now that the deal has completed with KPM, I can honestly say that the finer negotiation points handled by Bluebox and their overall management of this process has been nothing short of first class. I would be delighted to recommend Bluebox’s services to any entrepreneur contemplating the sale of their business.
Bill Ballard, Former Client
Bluebox worked closely with us over the following six months and helped us to implement some key initiatives which made InferMed a more attractive acquisition target. Once we decided to sell the business, the Bluebox team were very diligent in ensuring that no stone was left unturned. They negotiated expertly on our behalf to ensure we got the best deal possible.
Alan Montgomery, Former Client
The pre-sale planning programme that we signed up for with Bluebox made us develop our strategies and focus on the bigger picture. It proved to be a very rewarding investment from all viewpoints and significantly enhanced both the value of our business and its ‘saleability’. I would highly recommend Bluebox to business owners contemplating an exit in the next two years.
Nigel Parsons, Former Client
I have experienced first hand the value that can be created through highly structured pre-sale planning. It amazes me that it is not something that everyone does. It is so disappointing to see around 90% of transactions collapse before they complete and pre-sale planning will not only enhance your price, but also significantly enhance your chance of a closed deal.
James Caan, Investor
We worked incredibly closely with our advisers who provided expert knowledge of the sale process with which we were not familiar. We were truly delighted with the results.
Marten Nielson, Former Client
We appointed advisers to manage the sales process after we had received a number of unsolicited approaches for the business. I was incredibly impressed by the immense value that could be created by expertly negotiating with a group of already interested parties.
Paul Duckworth, Former Client
I was delighted with the service that the team offered and their real attention to detail. The deal was not without its complexities and it was reassuring to have such experienced advisers assisting me throughout the negotiations.
Peter Bennett, Former Client
Truly delighted with the way my sale process was managed. The fact that the team I worked with achieved such a great multiple is testament to their experience and their ability to create some true competitive tension.
James Averdieck, Gü, Former Client
The team at Bluebox provided invaluable support in negotiating this complex transaction. Their access to international purchasers, and exceptional knowledge of cross border M&A ensured that the deal was concluded efficiently, achieving a highly successful outcome for us all.
Jon Parslow, Former Client
“We selected Bluebox after a fairly long round of evaluating potential advisors because of their scientific, yet challenging approach to maximising value. During our initial meetings they showed us how far short of “ready” we were and consequently we completed more preparation in the early stages which meant we were equipped for what was to come. We were delighted with our choice of Corporate Finance partner. I do not hesitate in recommending Bluebox for any SME to consider.”
Simon English, Former Client
Bluebox provided invaluable advice in managing the negotiations with incoming investors. Their skills in handling these discussions were evident from the outset and the vital interface that they provided between the incumbent team and the incoming investors was truly beneficial.
Henry Braham, Former Client
Bluebox have a professional, dynamic and experienced team that is greatly assisting me with my focus on my exit within the next 24 months. Their structured approach is very refreshing and their ‘Blue Diamond’ programme is adding immense value.
Matt Evans, Former Client
The team at Bluebox provided me with a seamless service from the start of the engagement until our deal was completed. Attention to detail was commendable and their understanding of corporate M&A very impressive. I could not recommend them highly enough.
Victor Lewis, Former client
Having tried to sell my business previously – and failed – I was only too aware of the importance of pre-sale planning. This is a talented team offering a service that most people find out about, but too late.
Simon Hulme, Former Client
Bluebox are a quality outfit. Their access to International acquirers and relationships with the highest quality domestic investors was impressive. My shareholders and I received excellent service from start to finish and it was refreshing to be dealing with a senior team throughout the sale exercise.
Michael Clapper, Former Client
I cannot recommend the team at Bluebox highly enough. Their expert guidance throughout the entire sale exercise resulted in my shareholders securing an excellent deal with which the entire team was delighted.
Mark Rodol, Former Client
I’m really pleased with the service Bluebox provided. The team demonstrated excellent knowledge of the process to follow and led negotiations for the hospital in a way that allowed us to ensure we received appropriate value whilst focusing on reputational risk. Communication and service were of a very high standard.
Steven Davies, Former Client
With Bluebox’s expert advice we were able to find the right buyer that will benefit our business strategically. We’re delighted with the outcome and look forward to starting our new chapter
Clive Hillier, Former Client
The advice offered by the Bluebox team throughout the process was invaluable to the shareholders. We strongly believe that participating in Bluebox’s pre-sale planning programme was a significant driver behind the success of the deal. Their project management and negotiation skills throughout the sale process itself resulted in an exceptional deal being delivered to all parties involved.
Harpal Singh, Former Client