By Rachel Murphy, founder of The Grafter and Advisor for Silver Buck
Selling a business is often portrayed as the big win: the day you cash out and celebrate years of hard work.
Getting there is no easy feat, it takes years of hard work, plans to avoid burnout, and building a strong support network, to name but a few elements of the journey.
I’ve been through two exits (myself), in companies where I’ve employed over 120 people.
Each time, I learned the hard way that selling your business is one of the most complex, emotionally involved and misunderstood parts of entrepreneurship.
That’s why, at Ideas Fest on 10 September, I’ll be speaking about what no-one tells you about selling your business. The reality is rarely talked about, but it really should be.
Forget about the bag of cash
Many founders believe someone will simply turn up with an offer and that’s that. In reality, selling takes years of preparation.
One of my own biggest mistakes in my career was holding on to too much for far too long instead of bringing in others to manage parts of the business.
I was running sales and delivery when I should have handed them over; I can sell but I’m not a born sales person and not all sales approaches are about an aggressive approach.
It slowed down growth, and in reality, it was counter-productive, making the business less ready for acquisition.
If you’re serious about growing and exiting, you need to face up to that truth that it’s not quick, and it’s not simple, there are many factors involved.
Start early, start with “why”
Following the sale of my previous businesses, I created The Grafter to help other businesses grow and maximise their potential, in addition to helping entrepreneurs plan for their exit through our Grow Raise Exit methodology – a service that I don’t believe exists anywhere else.
More than half of the founders we support are already three to five years out from an exit. That surprises many, but it shouldn’t.
Planning early means building a business that someone else will want to buy. And an exit isn’t always about the highest bidder. It could be a partial sale, a management buyout, or even an employee-owned trust.
The first question is not “what’s your magic number?” It’s “why did you build this in the first place?” That helps to shape the correct exit path.
The UK: easy to start, hard to finish
The UK is one of the easiest places in the world to set up a business. Our digitised government services make it quick and simple to form a limited company, open bank accounts, and get going, but on the flipside it’s far harder when you want to sell.
Entrepreneurs here are being hit with rising National Insurance costs and also higher Capital Gains Tax when they look to sell.
A few years ago, under the previous government, relief applied up to £10 million at 10 per cent. Then it dropped to £1 million.
Now, under a Labour government, tax has risen from 10 per cent to 14 per cent and is likely to climb to 18 per cent. It’s pushing many founders abroad to places such as Spain, Portugal or Dubai.
For me personally, somewhere like UAE isn’t an option. As a gay woman, I want to live somewhere I’ll be recognised properly. That’s why I’m testing and exploring Spain and Portugal instead.
But it’s frustrating that so many entrepreneurs feel forced to look elsewhere at all.
The UK should be doing more to encourage entrepreneurship. In the US, federal SBA (small business administration) loans underwrite 80 per cent of the loan to create a business.
Here, we’ve got the EIS (Enterprise Investment Scheme) and SEIS (Seed Enterprise Investment Scheme), but they’re outdated.
Without change, we risk losing not just jobs and tax revenue, but the skills and innovation that come with entrepreneurship.
What needs to change
The answer isn’t to keep squeezing mid-range entrepreneurs. Lower Capital Gains Tax. Rethink National Insurance.
Go after the large corporations that dodge billions because they’ll deliver far more revenue than chasing smaller businesses that could be growing and creating jobs.
And we can’t ignore the gender gap. Only 2p in every £1 of venture capital goes to female-founded businesses. That’s criminal. The system was built as an old boys’ network, and change is painfully slow.
At The Grafter, around 40 per cent of our clients are women. Three of our Exiteers are female founders too. Representation matters.
But to really change things, we need to encourage entrepreneurship much earlier, at school level, across all backgrounds, with access to networks and mentors, not just money.
Why I’m looking forward to Ideas Fest
Ideas Fest is known as a Mecca for entrepreneurs. This year will be my first time attending and speaking, and I’m excited because it’s a space for honesty.
With the Grafter my focus is about achieving the results for others, and with that in mind I’ll be presenting two sessions.
This first one is about planning for exiting a business, but also a second about growing your business in the first instance.
My message is simple: both growing and selling a business involves a lot of hard work. Both elements take time, planning and resilience.
It’s about emotional intelligence and having the support network around you to help you succeed, and when it comes to selling, it isn’t about waiting for someone to hand you a cheque.
It’s about knowing your “why,” preparing early, and making the right choices for yourself and your company.
No-one tells you that. But they should.
