Peter Boolkah: Five Things You Need To Know If You Want To Build, Scale and Prepare Your Business For a Lucrative Exit

An Interview With Jason Hartman

Start with the end in mind. You must know what the end looks like in order to build your business for sale. Is it going to be a private acquisition sale or are you selling it to the generation below? Whatever your final exit looks like, you need to have a clear picture because that is. What direction is your business going in? You must structurally and strategically build your business knowing what it will look like when you come to sell.

As a part of our series about “Five Things You Need To Know If You Want To Build, Scale and Prepare Your Business For a Lucrative Exit, I had the pleasure of interviewing Peter Boolkah.

Peter Boolkah is a world-renowned business coach, speaker and entrepreneur who inspires and empowers you to create the business of your dreams, igniting real and lasting change for you and your business.

Thank you so much for doing this with us! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a story about what brought you to this specific career path?

I got involved in coaching more by accident than by design. I left a corporate career after 16 years, opened my own business, sold it after a year and was going to go back into another corporate position. I got approached by a franchise called ActionCOACH and met the man who was to eventually become my business partner. I was so fascinated by the industry and what he wanted to achieve that I turned down the corporate role and signed up to become a coach. I haven’t looked back.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?

This is potentially more embarrassing than funny. I was doing a presentation and went to the wrong venue in the wrong city. I then had to work out how to get to the correct venue in the correct city and still be able to do the presentation. It has never happened since thankfully and has taught me to triple check where I am going and the time! I also decided to hire someone to take care of my diary.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

“The more you learn, the more you earn.” Life is about adding value, not about how often or how hard you work. During the last 40 years it has been all about exchanging time for money. How many hours you did and the perception of how hard you worked. In today’s economy that is much less important. It is all about the value you add. We are in the knowledge worker age now, not the Industrial Age and it makes perfect sense that the more you learn, the more you will earn because you are adding value to the marketplace.

Ok super. Thank you for all of that. Let’s now shift to the main part of our discussion. Can you tell us a story about how you were able to build a business from scratch, scale and sell it to a bigger firm?

I don’t work with businesses at conception. I come in when a business is failing to grow, stalling or needs to be scaled up for sale. I have had many successes but one of the biggest is taking Sportsafe UK from a business which was turning over £90,000 per annum and over 9 years I helped to build it up into a company that was turning over significantly more than that and sold for 8 million pounds. The major shift with this particular business was that it had stalled due to a lack of a proper team behind it. The entrepreneur who started it, Jon Neill, was still working on the contracts himself with a small team of engineers. He was working 7 days a week and was struggling. We ascertained that John needed to build a business development team and a backroom team to take care of the general admin. We also started hiring more contractors as the contracts started to flow in. Importantly Jon stepped back from the coal face and started overseeing the company. We paid real attention to the hiring process and getting exactly the right team in place. For example we needed a business development team who could sell on the phone. We stopped doing face to face interviews for these roles and instead interviewed on the phone. That way we got the best people for the job. If they could sell themselves over the phone, they could sell the business. That is just one example of what we did to grow the business.

Based on your experience, can you share with our readers the “Five Things You Need To Know If You Want To Build, Scale and Prepare Your Business For a Lucrative Exit”. Please give a story or example for each.

1. Start with the end in mind. You must know what the end looks like in order to build your business for sale. Is it going to be a private acquisition sale or are you selling it to the generation below? Whatever your final exit looks like, you need to have a clear picture because that is. What direction is your business going in? You must structurally and strategically build your business knowing what it will look like when you come to sell.
2. Put together a five year strategic plan. Once you know what your business looks like at exit you need to put in a really detailed plan on exactly what needs to happen to get it there. That will allow you to achieve those goals and that outcome. If you don’t plan, the chances of a successful sale are dramatically reduced. Essentially, failing to plan is planning to fail.
3. Get your team in place to achieve those strategic aims. You may need to change the team you currently have. You need the specific expertise to move you forward and your existing team may not have that. The correct back team is one of the most important things to move you forward and a degree of ruthlessness is needed.
4. Make sure your point of exit is a clean break. Beware of earn outs which can reduce your profit drastically. For example if you agree to a 3 year earn out period which means you have targets to hit to ensure a percentage of the final sale price, you could be caught out. A lot can change in 3 years in the market. I know business owners who have agreed an earn out and the market has changed. They then failed to meet targets and lost a large part of the value of their sale. Ensure that you grow the business so that it works without you at the helm. That means that you are not of value to the buyers. That is a clean exit.
5. After three years of planning, start working with a business sales expert who will ensure everything is in place for the sale and you get the maximum valuation. These are the people who will broker the deal for you. Selling a business is a long process. You must do all your due diligence. They are expensive but you will see that money back and more as long as you choose the right partner.

In your experience, is there a difference in approach for building a service based business versus a product based business when you have the intent to eventually sell the business. Can you explain?

No. Ask yourself what your business model is? A product based business that is non contractual will be continuously turning over products and its value will be based on the size of its database. However, a service based business can operate on the same principle although they have more one off sales. Their database and their marketing ability to continuously grow their revenue through acquiring new clients is still just as important. If you want to achieve the highest value for your business look at the guaranteed revenue. It is about the contracts you have in place regardless of being a service or product based business. The more contracts you have in place the more income is guaranteed.

How does one go about the process of finding a buyer?

How you find a buyer depends on the kind of sale you want. If you are passing it from generation to generation, your accountant can possibly take care of the process. If you are looking at a sale to maximize your value then you need to get a business sale specialist involved. They will look at the marketplace and tell you where you will get the most money for your business. Get involved with that person three years before exit as you may still need to tweak the business model before an exit is agreed. Sometimes, but it is rare, you will be approached by a potential buyer.

How can one decide if it is better to build a business in order to exit, or if it is better to stick around for the long term and let the company bring in residual income, or if it is better to go public?

That is a personal choice depending on what you want out of your life and what the plan is. I believe every business should be built so it can be sold. If you build a business this way then you give yourself options. You have a solid structure with the right team in place. If you have built it to run without you then if you don’t sell you have a strong residual income. It may be that you have had enough and there is not a family member who wants to take it over. In that case, sometimes selling the business outright and benefiting from schemes like the entrepreneurial release where on the first 10 million of the sale value, you only pay 10% capital gain tax could be the best option. That may be a real good strategy if you want cash. I have a client in Finland that needed to go down the IPO route. Not because they necessarily needed the money themselves, but they wanted to raise the capital to be able to expand the business because the business needed additional capital to continue its aggressive growth campaign. So it really depends on what your strategy is.

Can you share a few ways that are used to determine a good selling price for the business?

Determining a good sale price is subjective. Very often I will give you multiples of 4/5/6 times your ‘EBITDA’. That tends to be your standard sort of valuation point. But then you’ve got to look at the desirability of the business. Some people will pay a multiple or 20 or 30 times, depending on the desirability. It may well be that they have a product or service that is unique to them. Your database may dovetail into theirs and that is very valuable to their market share. If your business is a standalone business running without the founder or current owner that becomes a very good investment for something like a pension fund where there is a return for little work then that is also valuable when pricing your business. To maximize your sale price: Have a strong team in place, predictable cash flow, five years of predictable sales which will indicate strong business growth.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)

We are currently working on a campaign to provide laptops for women who have fled Ukraine. This is to help them access remote work to feed their families ultimately. Remote work is a life line not just for these women but other people all over the world who can access more flexibility when it comes to work. I want to continue to guide people when it comes to flexible working. I think this way of working benefits companies and individuals and levels the workplace. It provides so much more opportunity and allows talent to get to where it needs to be. It can help people who are in the worst situations to be empowered and earn money to grow. I also think that it tackles the very real problem of damage to the environment. Remote working is a growing movement and I want to help it continue.

How can our readers follow you on social media?

I have a YouTube channel https://www.youtube.com/c/TheTransitionGuy/videos and podcast https://boolkah.com/podcasts/ where I feature prolific business guests who give expert business advice and I share my tips on how to grow your business. My website https://boolkah.com/ has webinars and other free resources on it. Type my name into Google, you’ll find me. I’ve spent the last five years marketing so that I’m highly visible.

Thank you so much for joining us. This was very inspirational.