And he says that most of the 50,000 plus businesses currently for sale in the UK are not selling for one simple reason – they just aren’t worth it.
Alchemy Network boss David Abingdon, who has made millions several times over both through his own businesses and by taking a share of the profits he’s made for others, is now telling business owners trying to sell their companies to get them fit and “investor ready” before even trying to put them on the market.
“I know there are a lot of people feeling the crunch, with difficulties getting customers and making profits, and they are making decisions under stress,” says David, who was formerly the CEO of both The Quantum Organisation and Insurety plc.
“The result of that stress is that many people don’t know what to do and they would dearly love to get out.
“The problem is that most businesses aren’t worth spit. They are worthless.
“A lot of business owners who are selling right now are deluded, and their thinking clouded. They believe their businesses are worth money, and they simply aren’t.”
David, whose company The Alchemy Network supports and trains business development consultants in countries including the UK, Ireland, Australia, Switzerland, Germany and the US, goes on to explain: “The trouble is that by definition most businesses are not businesses, because a business is an entity that should run itself. But with many companies, the owner has to be there all the time to make sure it is operating properly.
“In other words, they don’t have a business, they have a job. And who wants to buy a job?
“Most business owners looking to sell are operating on the Greater Fool Theory – they are assuming there will be someone out there who is a bigger idiot than me who will overlook what is wrong and buy it anyway. No wonder they aren’t selling.
“Any buyer worth their salt should be offering zero to a potential seller and let them justify why it’s worth anything at all.
“So what can the seller of a business do, in order to develop business value and to allow someone to buy it? They have to give their companies a business makeover.
“They need to make their business more systemised, and in doing so make their business “investor ready”. Systemising is really all about putting the company on autopilot, so that it runs without the owner having to be there. Then you have a money-making machine – and people will buy a money-making machine.
“There are very straightforward measures and steps that business people can take to increase the value of their business, by improving profitability and turnover. It really can be as easily done as said – I should know, I’ve done it enough times.
“As well as systemising, there is expertise available that can help the business owner to achieve the latent, real value in their company, by changing what they are doing that’s rubbish and looking at how to make it run well.”