Business idea, where next?
Discussion
Hi all,
Posting under a throwaway as I don’t want this tied back to my business just yet.
I’ve been an electrician for about 20 years, went self-employed in 2008. For a long time, things were steady but never took home more than £100k once everything was counted.
In 2019, I spotted a genuine opportunity and since then, net profits have averaged around £450k/year, consistently.
Now, I’m at a crossroads. My accountant reckons that because it’s an owner-driven setup, selling the business wouldn’t get me anywhere near its “real” value, unless one of my main clients buys it (unlikely—they’ve tried to copy what we do and failed twice).
He suggested I might be better off packaging what we’ve built into something like an online training course, workshop, or similar—basically showing exactly how we do it, with real numbers and systems.
My question is, do you think this is actually something people in the trade would pay for?
Not looking to be a business influencer—just want to turn the know-how into an asset that’s not 100% dependent on me showing up every day.
Would appreciate any advice from folks who’ve been through this or have ideas.
Thanks
Posting under a throwaway as I don’t want this tied back to my business just yet.
I’ve been an electrician for about 20 years, went self-employed in 2008. For a long time, things were steady but never took home more than £100k once everything was counted.
In 2019, I spotted a genuine opportunity and since then, net profits have averaged around £450k/year, consistently.
Now, I’m at a crossroads. My accountant reckons that because it’s an owner-driven setup, selling the business wouldn’t get me anywhere near its “real” value, unless one of my main clients buys it (unlikely—they’ve tried to copy what we do and failed twice).
He suggested I might be better off packaging what we’ve built into something like an online training course, workshop, or similar—basically showing exactly how we do it, with real numbers and systems.
My question is, do you think this is actually something people in the trade would pay for?
Not looking to be a business influencer—just want to turn the know-how into an asset that’s not 100% dependent on me showing up every day.
Would appreciate any advice from folks who’ve been through this or have ideas.
Thanks
GR_Yar said:
My accountant reckons that because it s an owner-driven setup, selling the business wouldn t get me anywhere near its real value, unless one of my main clients buys it (unlikely they ve tried to copy what we do and failed twice).
You could approach them and find out. It seems the quickest way to get a large chunk of money for relatively little effort.GR_Yar said:
He suggested I might be better off packaging what we ve built into something like an online training course, workshop, or similar basically showing exactly how we do it, with real numbers and systems.
You know the business and industry better than him - what do you think?If you can put together a training course for little outlay (ie so if it flops you haven't lost much), launch it and see what happens. You know the content inside-out but marketing might be the issue. And how do you stop people copying it?
£450k net profits is pretty healthy - I wasn't quite clear from your original post, are you now wanting to sell or just step back a bit?
Founder led businesses can be tricky to exit, as you've already been advised. But there's often a tipping point where you need to take on people to run parts of the business (like sales or finance) and one of those people could take it forward whilst you take a less active role.
I have bought and sold a couple of businesses and now advise companies in my sector who wish to exit.
Much will depend on your age, your appetite/ambition for the business etc. Some might say that you should be running this as a very easy lifestyle business, those profits look attractive for that.
Founder led businesses can be tricky to exit, as you've already been advised. But there's often a tipping point where you need to take on people to run parts of the business (like sales or finance) and one of those people could take it forward whilst you take a less active role.
I have bought and sold a couple of businesses and now advise companies in my sector who wish to exit.
Much will depend on your age, your appetite/ambition for the business etc. Some might say that you should be running this as a very easy lifestyle business, those profits look attractive for that.
GR_Yar said:
Now, I m at a crossroads. My accountant reckons that because it s an owner-driven setup, selling the business wouldn t get me anywhere near its real value, unless one of my main clients buys it (unlikely they ve tried to copy what we do and failed twice).
He suggested I might be better off packaging what we ve built into something like an online training course, workshop, or similar basically showing exactly how we do it, with real numbers and systems.
My question is, do you think this is actually something people in the trade would pay for?
Is it actually a training offering at present?He suggested I might be better off packaging what we ve built into something like an online training course, workshop, or similar basically showing exactly how we do it, with real numbers and systems.
My question is, do you think this is actually something people in the trade would pay for?
I am involved in setting up a training business in a different sector and it is far from straightforward.
Significant investment in branding and design tends to be needed. The hardest part is, without question, protecting your intellectual property - especially when it comes to online and takeaway materials.
I’ve seen materials produced for one organisation be quite fluidly “shared” by clients. You also have the risk that someone basically nicks your materials and sets themselves up doing the same, with better marketing or undercutting you. Hard to detect, hard to prevent.
Then you have the perverse situation where you have the cheaper you make it, the less people often value it. Make it too expensive and it’s hard to gain traction.
Depending on what it is, actual tools (ideally delivered online/via app) with a purchase or subscription model may be better?
I have been in exactly the same position and whilst not actively looking to exit at the moment, the same issue will exist when I do.
But it is possible.
Some years back, my previous business started as a brand name only. We had identified a gap in the market and rapidly developed a very strong niche and good reputation. At the time, we didn't think the market would last more than a couple of years so simply adopted a brand name to emphasise our speciality. The company itself was part of a group of interconnected companies all sharing a common owner.
Out of the blue, we were approached by a very large global company who wanted to buy what they assumed was the company. We explained that no businesses technically existed (they weren't interested in any of the non-niche stuff) and that all we had was the brand name and me. We had no staff, no assets... just some good ideas and good reputation.
To cut a long story short, we ended up forming a company so that they could buy it. The valuation was done on a combination of what investment was needed to build the business to a certain level and an amount that would motivate us to sell, and stick around to help build it with a clear exit pathway built in. The figure we arrived at made it a no-brainer. To say we were gob-smacked would be an understatement and spent some weeks expecting them to say, sorry, we got our sums wrong.
The deal didn't happen - corporate HQ had a change of direction and market focus and our inclusion was no longer part of their long term strategy. But, we ended up with a very solid business, trademarks, IPs, etc... all paid for by them and the reassurance that were were onto something,
If you're wondering why they didn't just hire me and/or set up a similar business themselves, we wondered the same and remains a bit of a mystery.
GR_Yar said:
My accountant reckons that because it s an owner-driven setup, selling the business wouldn t get me anywhere near its real value
He's right. For a business to be attractive for acquisition you have to become unimportant to it.But it is possible.
Some years back, my previous business started as a brand name only. We had identified a gap in the market and rapidly developed a very strong niche and good reputation. At the time, we didn't think the market would last more than a couple of years so simply adopted a brand name to emphasise our speciality. The company itself was part of a group of interconnected companies all sharing a common owner.
Out of the blue, we were approached by a very large global company who wanted to buy what they assumed was the company. We explained that no businesses technically existed (they weren't interested in any of the non-niche stuff) and that all we had was the brand name and me. We had no staff, no assets... just some good ideas and good reputation.
To cut a long story short, we ended up forming a company so that they could buy it. The valuation was done on a combination of what investment was needed to build the business to a certain level and an amount that would motivate us to sell, and stick around to help build it with a clear exit pathway built in. The figure we arrived at made it a no-brainer. To say we were gob-smacked would be an understatement and spent some weeks expecting them to say, sorry, we got our sums wrong.
The deal didn't happen - corporate HQ had a change of direction and market focus and our inclusion was no longer part of their long term strategy. But, we ended up with a very solid business, trademarks, IPs, etc... all paid for by them and the reassurance that were were onto something,
If you're wondering why they didn't just hire me and/or set up a similar business themselves, we wondered the same and remains a bit of a mystery.
Ideally, I’d like to sell the business. I’ve taken it as far as I can, but our industry is about to go through some big changes.
In five years, the company will probably look very different and likely be much bigger..
It’s not that I’m negative about the future; I just don’t know if I have the appetite to steer it through the next phase. Honestly, I think someone else could probably take it further than I could.
The whole idea behind the course was to give myself the option to be a bit more hands off. I imagined it as a proper toolkit—sharing the exact tools, processes, and (importantly) the mistakes I made along the way, so others could avoid the same pitfalls.
Right now, though, I’m just a bit unsure about which direction to take.
In five years, the company will probably look very different and likely be much bigger..
It’s not that I’m negative about the future; I just don’t know if I have the appetite to steer it through the next phase. Honestly, I think someone else could probably take it further than I could.
The whole idea behind the course was to give myself the option to be a bit more hands off. I imagined it as a proper toolkit—sharing the exact tools, processes, and (importantly) the mistakes I made along the way, so others could avoid the same pitfalls.
Right now, though, I’m just a bit unsure about which direction to take.
Is it Franshisable? If you've got a tried and tested product / service that can be duplicated by others if they follow a certain process/procedure etc, then I suspect it may be possible to set things up as a franchise offering. Other folks then buy a licence/franchise from you, go and do their thing based on the process/procedure you've licensed and you sit in the middle monitoring things and taking some sort of cut. That's probably not explained well, but it may be worth looking into franchising as a concept.
fridaypassion said:
Sounds like you need to hire an experienced CEO.
This sounds like the solution doesn’t it. £1-200k for someone that has the drive and ability to push the job forward still leaves the same amount left over even at current profit levels. A few million in the bank and walk away would obviously be nice but it’s probably not likely.
I would think it’s easier to repackage an 'owner-driven setup' that already makes £450k a year into a ~£2M sellable business, than it is to launch a course / training programme from scratch and hope to achieve similar results and valuation.
I’m currently at the early stages of exploring a business purchase: it makes around £700k, has been family owned for 25 years, and has loads of loose ends (particularly around structure, unpaid family workers, it's not even a ltd company). Even so we are at a valuation of 'millions'.
I’m currently at the early stages of exploring a business purchase: it makes around £700k, has been family owned for 25 years, and has loads of loose ends (particularly around structure, unpaid family workers, it's not even a ltd company). Even so we are at a valuation of 'millions'.
Steve H said:
This sounds like the solution doesn t it. £1-200k for someone that has the drive and ability to push the job forward still leaves the same amount left over even at current profit levels.
A few million in the bank and walk away would obviously be nice but it s probably not likely.
A superstar CEO should be able to navigate the transition to a sale. 3 year earn out plus cash sum and a shares in the acquiring company sounds pretty sweet to me. A few million in the bank and walk away would obviously be nice but it s probably not likely.
IS it just you, or are there employees? How many? Premises? What are the barriers to entry?
It sounds like it woudl be worth spending some of that £450k on replacing yourself with 2 or 3 people (MD, Sales, Finance, Ops etc etc), so you become non-exec owner and guide from a distance. Then sell it, you now have an Exec team that could buy it from you by MBO as well as the company that has failed to do it themselves twice who can now buy your team and setup.
It sounds like it woudl be worth spending some of that £450k on replacing yourself with 2 or 3 people (MD, Sales, Finance, Ops etc etc), so you become non-exec owner and guide from a distance. Then sell it, you now have an Exec team that could buy it from you by MBO as well as the company that has failed to do it themselves twice who can now buy your team and setup.
Mr Overheads said:
IS it just you, or are there employees? How many? Premises? What are the barriers to entry?
I think this is important - to put it another way WHAT is the OP actually selling? If it's a One Man Band and the earnings are generated purely by the OP's know-how then there is very little if anything to sell. i.e. let's say the OP was a Consultant Neurosurgeon in Harley Street. Without the OP there isn't much of a business unless he can train somebody else up to do his job and pay him for the privilege.
Countdown said:
Mr Overheads said:
IS it just you, or are there employees? How many? Premises? What are the barriers to entry?
I think this is important - to put it another way WHAT is the OP actually selling? If it's a One Man Band and the earnings are generated purely by the OP's know-how then there is very little if anything to sell. i.e. let's say the OP was a Consultant Neurosurgeon in Harley Street. Without the OP there isn't much of a business unless he can train somebody else up to do his job and pay him for the privilege.
In some scenarios, credentials, track record and reputation - in other words, the 'brand' - can acquire a value in their own right regardless of anything else because this can allow company acquiring to accelerate their growth by benefiting from the brand attributes that have been built. In these scenarios the exit would be soft and likely to span at least 12 months - possibly longer - to allow time for the transition to taper across. I don't think this appeals to many business owners who's rather sell and go.
This assumes that the work being done by the owner can transition to other people. If that's not possible then the Harley Street surgeon scenario applies.
Hi all,
Thanks for all the feedback—really appreciate the range of perspectives.
Just to clarify, this isn’t a one-man band. Depending on the time of year and the legislative cycle, I have between 20 and 40 engineers out on the road. In the office, there’s a core technical team of four, plus six admin staff based in South Africa. Accounts are fully outsourced, and sales is largely automated with a process the team sticks to.
At this stage, I think the next logical step is to bring in a Managing Director—someone who can take the reins and steer the business through the next few years of growth and transition. That would free me up to focus on other ventures....
Thanks for all the feedback—really appreciate the range of perspectives.
Just to clarify, this isn’t a one-man band. Depending on the time of year and the legislative cycle, I have between 20 and 40 engineers out on the road. In the office, there’s a core technical team of four, plus six admin staff based in South Africa. Accounts are fully outsourced, and sales is largely automated with a process the team sticks to.
At this stage, I think the next logical step is to bring in a Managing Director—someone who can take the reins and steer the business through the next few years of growth and transition. That would free me up to focus on other ventures....
I am in a relatable situation though in a very different sector.
Before pursuing a CEO or deciding on anything I would recommend engaging a corporate finance/M&A advisor that is active in your sector - their advice will be invaluable.
You may not need a CEO - you yourself can provide that role easier than you think - a CEO is a delegator and strategist, usually less hands on. A commercial exec in some form that can run the company and grow the company without you is far more valuable - this is what an acquirer will look for.
I went through the process and ended up without a decent offer. Am currently sucking up getting on with it and driving the company forward for a few years before reevaluating. But all done with feedback from an advisor that knows what acquirers want.
You sound like a hugely capable individual. Don’t underestimate your ability to stick with it.
Before pursuing a CEO or deciding on anything I would recommend engaging a corporate finance/M&A advisor that is active in your sector - their advice will be invaluable.
You may not need a CEO - you yourself can provide that role easier than you think - a CEO is a delegator and strategist, usually less hands on. A commercial exec in some form that can run the company and grow the company without you is far more valuable - this is what an acquirer will look for.
I went through the process and ended up without a decent offer. Am currently sucking up getting on with it and driving the company forward for a few years before reevaluating. But all done with feedback from an advisor that knows what acquirers want.
You sound like a hugely capable individual. Don’t underestimate your ability to stick with it.
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