It’s 2020, and to mark the new decade that will herald FSB’s 50th birthday, Golden Anniversary, FSB Greater Manchester’s has launched the Veterans’ Club.
To qualify, you’ll need to have been a member continuously for more than five years. If that’s you, and you’d like to see your business profiled here, email your Development Manager on email@example.com.
Here we meet husband and wife team Alex and Paul Dodgshon, who between them run Uscita Solutions Ltd. They’ve been FSB members since 2008…
Alex, tell me a bit about your business?
We started in 2005, and there are two sides to what we do. Firstly, we help business owners prepare exit strategies – hence the name. Uscita translates in Italian to ‘the best way out’. After we’ve done that we then help them find a buyer.
For the business sales side, we are part of a franchise with Business Partnership, which is a business brokering service with partners nationwide. It has a large database and all the tools to sell a business, including a large bank of historical sales to help us understand current business values.
The two sides of our business have one goal, to help business owners achieve the sale they need when they need it.
So how do you do that, Paul?
To begin with we look at ways to add value to a business. We help owners reduce risks and improve potential, simply, we make the business attractive to potential buyers. Most businesses will need to plan an exit strategy three or four years in advance to get the most from it financially, although many businesses don’t plan that far ahead unfortunately. Sometimes it is something unexpected that forces a quick sale, like illness, or bereavement.
However if a business owner can plan ahead, it can add on average around 70% to the value. All the things a buyer wants to see, Uscita helps the owner put in place first. It’s similar to if you were selling a car you make sure it looks good. If it has a full service history, runs well, and appears to have been looked after, you’ll get a better price.
The facts are that 80% of businesses up for sale, don’t sell. If someone needs to sell their business quickly, perhaps due to change of circumstance, unless it’s really fantastic then they will struggle.
Most of our clients are from £0.5m - £2m turnover businesses. Below that it’s usually retail and hobby lifestyle businesses, and then it can be tough.
What do you class a hobby/lifestyle business?
Where the owner has to work in it, so it’s their job as well as their business. A valuable business is one that can be invested in - you can’t buy the hobby business outright and expect the old owner to continue working there and running it. So an investible business is one that does not rely on the original owner.
Where did the business idea come from?
We both have banking backgrounds. I had many years at Barclays but took redundancy to have our first child. Paul was at HSBC then left to become FD of one of his client’s businesses. He grew the business to a turnover of £10m in four years, so we knew we had the right experience to go it alone. We came across Business Partnership and they asked Paul to join them in 2005. As the business got going Paul decided he needed a second pair of hands and so we joined forces.
What skills do you need/did you have to learn to run your business?
Both being bankers we already had financial skills, which was great, but we had to brush up on our sales skills. Latterly, I was working in a training and development role at Barclays, so I needed to hone my skills around selling businesses far more than Paul. Most important was knowing how to design and execute a deal, as well as learning how to coach.
Like many small business owners, you have to learn to do most things yourself. There are no other departments to help, or staff to delegate to.
What is the hardest part of running your own business?
The unpredictability of it all. We’re always waiting for deals to complete, which is where we make our money. No deal, no profit. We have coaching income too, but the real money is when a client sells a business.
You must have seen things change?
The market has changed significantly in the 15 years since we started. Before the financial crash, smaller retail businesses were selling regularly, but now fewer people are interested in shops on the high street. We therefore keep on top of the changing market, and understand what will sell and what people are prepared to pay. For example, if you want to start a coffee shop, do you buy an existing business or establish from scratch? Where are the costs? If you buy, is it an investable business, and will the customer base stay loyal?
As an example, we sold a restaurant in Manchester city centre in 2009. Three years later it came up for sale again having been improved and is was making better profits too. But we couldn’t sell it. At that point in the market there were more empty premises and available leases, so people were starting their own business from fresh wanting to establish their own brand, instead of buying our clients. The owner kept hold of business and it’s still going strong today and making good money, despite a competitive market.
What’s the best piece of advice you can give someone starting a business?
Work on your business acumen. Most people start a business based on a passion, technical skill or something they love. But it isn’t enough, you must acquire business skills as well.
Learning the best way to keep accounts and understand cash flow. Every business owner should understand their own numbers.
Ensure you comply with employment, HR, Health & Safety and other legislations as your business evolves. And when the time comes to manage a team of staff, get yourself on leadership training.
There is really no excuse with FSB and other organisations offering numerous courses, seminars and learning events. There’s lots of free support available too through local councils or business districts. Just look for it.
So, you mentioned support – why and when did you join FSB?
We started the business in 2005, and joined FSB in 2008. The main reason we joined was for the free banking with Co-op, which is who we still bank with today thanks to FSB!
We have also used the HR portal & legal helplines when occasional issues have arisen.
So, Brexit. Thoughts…
The uncertainty has been very bad for business. There has been no confidence to plan in the business or consumer market. But now, following the December election, we have some clarity and people know what they are dealing with, and where we’re heading. However, I think it will likely take two or three years to emerge from this Brexit hangover.
We feel more optimistic going into 2020, we know something will now happen at last. Government policy has been tied up in Brexit, so let’s hope other things can now move on as well.