Your Kensington & Chelsea

Selling for success Business broker Mark Mills is a serial entrepreneur and claims to be able to sell any business for a profit.

Here he tells us why a favourable tax regime means there has never been a better time for business owners to sell up and enjoy the fruits of their labour.

Building up your own business is about so much more

get a business ready for sale. Mark explains that most

than the investment of cold hard cash, few things will

companies he deals with will be able to identify a sector or

ever take up as much of your time or weigh as heavily on

division of their business that, if it were run as a separate

your mind. So making the decision to sell your business is

company, would be hugely profitable.

perhaps one of the most difficult you will ever make.

Mark Mills has gone through this process five times and

“One company I sold had a sales force of about 500 called Tactical Solutions that had a very good system for

founded Comerga Consulting in 2011 to use his experience

product recall, which is obviously very relevant in light of the

to broker the sale of businesses. He helps a business

horsemeat scandal, so we designed a website for it and

increase its profitability before launching the sale process

started generating business through that because basically

and believes there have never been better conditions to sell

they had 500 people on the road calling in on supermarkets

your business.

and convenience stores and they’d never told anybody

“We’re in a very, very good tax regime for selling a

that they did it and it was a great piece of business, so we

company as opposed to earning an income from it

publicised it, ramped that part of the business up and it was

because the highest rate of tax is 45 percent, but you can

very profitable because it was all incremental income.”

sell your business for £20million, if you’ve structured it

Mills has a very specific process that he applies when

correctly with your wife, husband or partner, and get out

working with a business with a view to selling it, he explains:

at 10 percent. So you can sell it for £20million and keep

“What most advisors do is try and give advice from the

£18million.” He said.

outside whereas I tend to go in, become a non-exec

“So it’s a really good time – until probably the election in

director and do what I call tidying up, then improvement

May 2015 – I think it will probably change whoever gets

and then the [selling] process whereas most people selling

in. So this is a very good window for people to sell their

launch a process then realise the need to do the tidying

business and typically it takes 12 months, that’s why I’m

up and improvement and they’ve got it all the wrong way

pushing now, even if they don’t do it with me they should

round and you’re doing it in front of an audience of advisors

think about selling if they’ve got a sellable business.”

and buyers. Doing it my way tends to make things go more

Mills believes whoever gets into power at the next general election will raise the level of Capital Gains Tax as a revenue raiser.

smoothly and you get more for it.

“It works really well because if you follow that strategy you can build value before you tell anybody and also you can be

“I think we might see them go up to 28 percent, not the

more careful with the information that goes out, because

heady days of 40 percent. If we get a socialist government

another big mistake people make is information goes out

in then they historically have it at 40 percent. I really think

to lots of different people, in lots of different forms and you

that in May 2015, whoever gets in, they will look at it and

end up with a protracted, fractured process that normally

think that is an easy tax to put up. It’s not a vote loser

ends up without a sale and they get disillusioned with the

because it only effects people who are going to sell their

whole thing and usually just end up continuing running their

business but the take on it is very good because it’s big

business. Most business owners are very good at running

lumps of capital.”

their businesses but they’ve never sold it.”

Mills began his business career early, describing himself as “one of those annoying people at school selling anything that moved for profit”, before working with businesses

Rather than selling out to competitors Mills has found that many of the sales he brokers are with private equity clients.

“The city, London in particular, is awash with cash

including Halstall Toys International, Tactical Solutions and

because the private equity guys have all made their money,

Card Point Plc.

we’ve been through the recession in their life cycle. So lots

“I had a couple of bumpy starts where I didn’t make much

of them have either got spare cash from having raised it

money but then I came up with an idea for postboxes in

five or six years ago and/or they’ve raised additional funds

petrol stations with advertising that went really well and

because those guys have done really well in the recession

I sold it to More O’Ferrall Adshel, then I sold it for them to

because they tend to concentrate on things like cash

Royal Mail so I cut my teeth on selling the same business

generation. So at the moment most of the buyers are in

twice because I realised it had what I call a hidden value,

London, it’s the private equity houses, to some degree

so it had the value of the advertising but once we’d put up

competitors, but more likely trade where they’re looking

1,200 postboxes I realised that the intrinsic value was in the

for strategic purchases. One rich vein is listed companies

post we were collecting because it was at a time when the

who’ve generated cash and are now looking to bulk up

Royal Mail was supposed to be privatised.”

because during the recession they’ve hunkered down,

Finding this hidden value in a business is just one stage of Mills’ ‘process’, the series of steps he takes to

stuck to their knitting and are saying now we can expand because they’ve got spare capital.”

35