How to Sell your English Language School Business (Part 2)

How to Sell your English Language School Business

Issue 7 is the second part in the linked series describing the 12 Critical Steps to a successful sale of your Language School business.

James will also share what he got right when he sold Pilgrims Language & Teacher Training Courses of Canterbury and also, the mistakes he made!

The second 4 Critical Steps on the way to a successful sale...

Write down all the USPs/PSPs of your business from a Buyer’s perspective

• What have you got to sell that will appeal to a Buyer of your business?
• Ensure your list is thorough and complete.
• Consider taking advice to extract all the USPs/PSPs; owners are often too close to see all the possible Selling Points.

Step 6: Address Confidentiality

• Decide on the importance to you and your business of Confidentiality about the fact that you are For Sale.
• Consider the possible reactions of Agents, former students, future students, competitors, suppliers, staff, etc; and, the Media if news leaks
• If Confidentiality is critical to you, engage A N Other to front and lead the sale process for you at least until all Targets are approached; and very strict Confidentiality Agreements are in place.
• A business broker like James Dixey Limited can keep your name and the name of your business Confidential until Targets are approached.
• Beware of ELT Window Shoppers! There will be lots of them just wanting to know what is going on without any intention of buying you. They will waste your time.

STEP 5: Business USPs...

Write down all the USPs/PSPs of your business from a Buyer’s perspective.

1. What have you got to sell that will appeal to a Buyer of your business?
2. Ensure your list is thorough and complete.
3. Consider taking advice to extract all the USPs/PSPs; owners are often too close to see all the possible Selling Points.

STEP 6: Confidentiality...

Decide on the importance to you and your business of Confidentiality about the fact that you are For Sale.

1. Consider the possible reactions of Agents, former students, future students, competitors, suppliers, staff, etc; and, the Media if news leaks.
2. If Confidentiality is critical to you, engage A N Other to front and lead the sale process for you at least until all Targets are approached; and very strict Confidentiality Agreements are in place.
3. A business broker like James Dixey Limited can keep your name and the name of your business Confidential until Targets are approached.
4. Beware of ELT Window Shoppers! There will be lots of them just wanting to know what is going on without any intention of buying you. They will waste your time.

STEP 7: Action Plan...

Write an Action Plan to sell.

1. Understand the Corporate Sale Process in detail.
2. The terminology alone can be baffling: Teasers, IMs, NDAs, Cas, HOTS, DD, VDD, Data Rooms, S and P, Warranties, Covenants, Earn Outs, Def Cons etc.
3. Plan to avoid the typical mistakes made by others. The mistakes I made when selling Pilgrims are attached on page 3.
4. Decide whether you can continue to run the business yourself and run and control the Sale Process at the same time.
5. Warning: don’t take your eyes off your business, just when you want it to be doing really well!
6. If you cannot do both properly, engage somebody experienced to help you, such as a business broker like James Dixey Limited.
7. Build Go/No Go Reviews into your sale TT; so that you can pull out if you change your mind.
8. Seriously consider professional support and advice. Most people only sell a business once. It is worth getting it all right first time!

STEP 8: Preparation...

Do the Preparation.

1. Get the business Ready for Sale.
2. Remember the 6 Ps: Perfect Prior Preparation Prevents Poor Performance.
3. Sort out any Nasties/Weaknesses/Risks for the Buyer before you put yourself up For Sale.
4. Businesses with clear and exciting Prospects always command the highest prices. So a Budget for the next business year together with a simple 1 page narrative plan explaining how your business will grow.
5. Put advanced Tax Planning in place. If you are successful in selling your business, you are likely to suddenly find you have a nice mountain of cash. Prepare for this.
6. Engage Solicitors and Accountants who are experienced at Corporate Sales. Use Fixed Fee contracts for both, against very clear specifications. Beware of engaging people to advise you who sell their time on an hourly basis. Consider an Invitation to Tender (ITT) for both.
7. Prepare the Data Room. This is an electronic Filing Cabinet in which you put all the documents that you think a Buyer of your business will want to see before they buy you.

Please contact james@jamesdixey.co.uk for further information.

www.jamesdixey.co.uk

James’ mistakes on Steps 5-8...

5. I did not know what was involved in the Corporate Sale process; nor did I bother to find out.
6. I engaged nobody to help and advise me. I thought I knew all the answers.
7. I did not list my USPs/PSPs.
8. As a direct result, I completely under-estimated the power of the Pilgrims Brand in my negotiations with the Buyer.

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