Mayfair resident Fenton Higgins is a founding partner of Arygyll Street-based Higgins Fairbairn & Co, which provides business and financial advice to corporate and personal clients. He also takes a leading role on transactional matters such as business disposals, acquisitions, valuations and dispute resolutions. Here he talks to Selma Day about running a business and how to go about selling a business

Is running your own business all it’s cracked up to be?
It is the dream of many people to run their own business which usually means starting one from scratch. That was me many years ago when I launched my own firm of chartered accountants in Mayfair. It can be exciting, financially rewarding and personally fulfilling; but it can also be stressful, a drain on finances and it will definitely change your way of life. What I have learned is to enjoy the highs and not to whinge about the challenges but deal with them in a responsible way. Would I swap running my own business to be employed? I sometimes feel that way but not for very long as I soon remind myself how lucky I am to work with my wonderful team and with delightful clients in the centre of the best city in the world.

What attributes do you need to be successful?
To succeed in running your own business I believe that you need to have certain attributes which I refer to as “the three Rs” – resolute, resourceful, and resilient. They sound like synonyms but they are quite different: Resolute – determined in character, action, or ideas; Resourceful – having the ability to find quick and clever ways to overcome difficulties; and Resilient – able to withstand or recover quickly from difficult conditions.

From my experience, what has worked for me is to surround myself with good people; to value loyalty – to show it to those around me and to recognise and appreciate it from others; and a simple bit of personal discipline of always making an early start and dealing with the things that that I least want to do first.

When should business owners sell?
Most business owners will tell you that their work is not a job but it is a way of life. Therefore when it comes to selling it is a very hard decision for most.

Selling is a new experience for most owners, and usually quite a scary one. It is sometimes triggered by an unsolicited approach, or from a personal event such as forthcoming retirement, ill-health or pressure overload; and/or business reasons that can be: time to cash in, partnership fallout, staffing problems, technology lag, or it is simply that it feels right! Timing is difficult but “don’t leave to too late” is my advice. Buyers will be less inclined to purchase a business in decline – or if they do, it will be at a lower price.

What is involved with selling a business?
There are two things that kill deals – time and surprise. That is the message that I continually repeat to business owners. To avoid this happening I ask the owner to provide detailed data on the company. This will be required by a buyer’s professional advisors once a sale is agreed and so I make sure that I have this in advance.

I prepare a sales document that is called an “Information Memorandum” which explains the business and includes as much detail as possible to avoid surprises down the line. Yes, the construction of the document is to show the business in its best light but it also has to be factual and be “warts and all”! This approach is reassuring to potential buyers, saves time and is key to a sale being concluded.

Once a sale has been agreed with a buyer, lawyers and accountants will be instructed to take a more forensic view of the company which is referred to as “due diligence”. Undisclosed issues that are discovered at a later stage will often result in a price reduction or worse – the deal collapses! The point is that there is no point in taking a business to market until all the preparation has been completed.

What is the timescale of selling a business?
My best estimate is 14-30 weeks, although it can be more, but not usually less.

How did you get into selling businesses and why?
One of my clients asked me to help with an acquisition of a company. I ended up negotiating the whole deal and working closely with the lawyer involved who then introduced me to one of his clients who was looking to sell his business. It snowballed from there – acting for buyers or sellers. I love taking on new instructions and learning all about the business that my client is going to acquire or sell.

Sometimes, I know very little about the subject matter at the outset but this is the challenge. The first acquisition that I mentioned provided specialist services in geomorphology – I had never even heard of the word before, let alone what it meant. I mainly act for sellers and the fascinating part of the role is to truly understand the business model by immersing myself in the processes and procedures of the business and this is a massive help when I am talking to prospective purchasers.

How do you divide your time between running your accountancy practice and selling businesses?
First of all I try and maximise the day by arriving at the gym near my office at 6.30am every day followed by breakfast in my favourite cafe in Mayfair, Sunflower Kitchen, which is opposite Pollen Street Social. By being at my desk before 8.30am, I am ahead for the day ahead which involves 30-45 hours a week advising clients and running the accountancy practice and 5-20 hours a week handling business sales.

What businesses will you take on and can you give us some examples please?
I only take on those that I believe that I can sell, at a realistic price and I have empathy with the owners (and I am confident that they will provide the necessary information). I try to avoid handling more than a few at a time to make sure that I devote sufficient time to each and this keeps my record intact of successfully completing over 90 per cent of sales instructions. At the moment, I have three sales instructions: Online exchange for buyers and sellers of collectable fine wines; fulfilment service for online retailers; and FCA-regulated foreign exchange transfer payments.

I have instructions to take two more to the market later in the year – a yacht dealership and a pharmaceutical marketing company. Hopefully, this will be after completing at least two of the current sales files.

I also act for a client for whom I have just submitted an offer to purchase a manufacturer of process applications for the mining, quarrying and construction industries. I wish that I dealt more with manufacturers as I love seeing raw materials go in one end of the factory and finished products come out of the other.

If successful with the bid, I will be leading the due diligence exercise and contract negotiations – always with an eye on dealing with any difficulties with an open mind and trying to make the deal happen. Emotions can run high and professional egos can be a problem but locking horns is best avoided wherever possible.

Have you ever sold a publishing business?
Not yet, but I hope to one day! Please come and talk to me when you are looking to retire Selma. I love Mayfair Times and I won’t be the only one.