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This Week’s Dilemma

Over the past 10 years, I have built a thriving packaging business and am now being courted by a buyer who won’t take no for an answer. The buyer is persuasive and obviously keen for me to agree, so they are bound to make such an attractive cash offer that I would be foolish to turn it down. But I’m too young to retire and spend my life playing golf. I’ve still got loads of energy and I want to remain active in the industry. What should I do?

Having sold a successful mortgage packaging business myself I know that you must first decide if you truly want to sell and then offer your proposition on the open market to see if it is worth more than the present offer.

In drawing up a sales prospectus – preferably with the professional help of lawyers and accountants – you will learn a lot about why buyers might want to own it. This process might reveal opportunities to keep your business, expand it and make more money – something that the prospective buyer has obviously already spotted.

Remember, selling costs can be considerable and the seller has to bear any staff redundancy costs. Also, if a sale is agreed and payments are staged, it’s advisable to negotiate a substantial initial payment as later payments tied to profits may not reach expectations.

After the sale, you want to remain in the mortgage industry. If you are tied to the business for a period, make sure this is in a role you enjoy, and also that you feel you can work happily with the new owner.

Alternatively, the cash realised will help you follow fresh opportunities, but watch out for restrictive covenants in the sale agreement. Consultancy is an option but we help each other and share knowledge in this industry already so there may be a limited market. But happily, with 10 years’ experience, you should be a marketable commodity.

Helen Hymos is lender relationship manager at the Professional Mortgage Packagers Alliance

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