I met with a dynamic, communicative and highly articulate business owner the other day. Meeting with entrepreneurs like him represents one of the aspects of my business life that I enjoy the most. It was a stimulating conversation. How and why he started his business, the team he had built, the ups and downs of trading, the risks, the rewards and the exciting times that lay ahead. He spent an hour recounting his fascinating story. He was earning well and appeared incredibly happy with his lot.

He finished speaking and asked me to share my views. We had been introduced by a very successful former client of mine who is, now, also a mutual friend; he had been assured I would be candid. He shuffled in his seat and appeared nervous of what I was about to tell him. I pulled no punches. I was professionally direct.

“Your business is highly attractive, but completely ‘un-sellable’.

Sadly, I am confident this is the case. It would be impossible, I explained, for him to sell his business for so many reasons. I was almost apologetic for my candour, but reassured him, as well as I was able, that this should be no reason for disappointment. Notwithstanding what I expected, he appeared remarkably upbeat and was in fact encouraged that I had described his business as ‘highly attractive’. And then it struck me, there must be thousands upon thousands of entrepreneurs that are in a similar position; I see a fair few that knock on my door every week and I am always equally professional and direct. Nice business, not saleable.

As with many others, the businessman I was meeting with had built a classic and very successful ‘Lifestyle Business’. Nothing wrong with that at all. He had started small with the objective of being his own boss and with a desire to earn enough money to put food on the table for his family, fund an increasingly elaborate taste for holidays and pay never-ending school fees. Oh, and pay the mortgage.

However, as a result of a number of factors, the chances of an exit for him was remote. His income was lumpy and the quality of this income was poor, his management team was under-developed and with incongruous goals to his, his ability to scale was severely limited by a number of factors and the business revolved far too heavily around him. The Intellectual Property he ‘thought’ that he had created was not properly protected and the barriers to entry were almost non-existent. I could go on. However, as a machine to generate income and provide his family with what they needed, it did exactly what he had set out to do.

I did point out that he would not be able to benefit from the key tax break available to entrepreneurs on their sale (Entrepreneurs Relief at 10%), but he had considered alternative tax planning with his accountant and was content to remain as his own boss, firmly in control of his own destiny and enjoying an income that many would desire. As he left my office, he asked me directly whether I thought he was mad. Absolutely not.

Businesses can be built for many reasons. These reasons can, and often do, change as a business and its owners mature. Situations change and people form different views on life as they journey on. Building a business for sale from the outset is simply one option. An attractive one I have to say. However, I believe that entrepreneurs often feel inappropriately pressured to realise their exit or build too aggressively for the future. It is not what they want and not what advisers should overly encourage. Endless marketing from a plethora of advisers teasing business owners with unrealistic and unachievable valuations in a hope to satisfy their hunger for short term fees.

And therein lies the lesson. At some point in your business life, start thinking about what your objectives truly are. Are they to sell the business one day or, equally as compelling, to create a Lifestyle business that will provide income without the requirement for a lump sum at the end. Is your business for lifestyle, fun, income or capital gain? Ask yourself this question.

Lifestyle businesses and the entrepreneurs who have created them should certainly not be viewed in the dismissive way that they often are. That is hugely insulting to these often very talented entrepreneurs. Lifestyle businesses are ‘what they say on the tin’ : they suit different lifestyles. They form a massive part of the SME community and entrepreneurs should be encouraged down whichever path they choose.

And, for those that are not content with fitting into the ‘Lifestyle Business’ box, harbouring ambitions to sell… you know where I (together with my hugely talented team) are. We will happily provide an honest assessment of how saleable your business is and then assist you in selling your business using one of our award-winning, fixed-price ‘Sell My Business’ packages. All while saving you thousands of pounds and allowing you to control your own destiny.

If you are thinking about selling your business and would like a call to discuss how Velocity can help, please call us on 0203 924 5150, or email us at info@blueboxvelocity.com.