How to sell a business: interview with Mark Edwards from Boss Equity
Boss Equity specialises in mergers & acquisitions for small and medium-sized businesses in the software technology sector typically with a revenue <$100M. They partner with their clients to create their unique value proposition and maximise equity return at the sale. We had an interesting talk with Mark Edwards, founding CEO of Boss Equity, about how to maximize the equity value of your company and we also asked him for valuable sales tips for starting and existing companies.
Read, learn and enjoy!
Hi Mark, could you introduce yourself and your company?
“I am Mark Edwards, co-founding CEO of Boss Equity, previously known as Document Boss. Essentially what we are about as an organisation is that we are working with software technology companies to maximize the equity value of those businesses when they are moving towards a sale. We are a mergers and acquisitions company, and we take organisations through that process. We find a buyer for them, and we help them first understand their specific opportunity, build additional equity value, prior to us handling the negotiations to unlock and maximize the equity value of those businesses.
But we work in a slightly different way. We like to engage in the very early stage because if done correctly using our EVA framework, you can gain a much bigger advantage. I think many medium-sized business owners lose out in this process. For entrepreneurs, it’s not always easy to come up with a new idea and start a new business. It’s a long way and I think entrepreneurs need to be rewarded at the right time.”
What is your methodology or what is the EVA framework?
“The EVA has been designed to put the control back in favour of software tech owners. It is our innovative approach to help plan the exit strategy of companies and then 'hand hold' them through the process of selling their business. We are really excited about this approach. It started from the perspective that the reactions we received from our clients were very positive. They all said that they could not believe we did such a good job. We needed to do that at scale. We also had the opportunity to bring new people into the organisation, so we needed to be repeatable, to be scalable. Moreover, we wanted to achieve the same results, but better. So we spent a lot of time collating all that we had learned during those years and from that we built a framework. It gives us a consistent approach or framework which you can continually improve and build upon. And that worked really well. It also helps our clients in understanding what it is we are doing for them. Often organisations see us as a glorified real estate agent, and that is something we want to prevent. We wanted to turn a service that is very intangible into something more tangible or easier for our clients to understand. That was our first requirement.
Thanks to the framework the results we deliver are even better now. It improved what we do, and it changed our thinking. And our clients understand our approach a lot better. We also added a little video to it on our website. The framework covers five key areas: competitive space, marketing fuel, the sales engine - which is really important -, management drivers and the exit strategy itself.
Your exit strategy is a critical component of your business plan and needs to be in place from the outset to give you options and ensure alignment with shareholder expectations.”
What is your advice to increase equity value? Or how can entrepreneurs take care of this from the beginning?
“Start early and have a plan to build equity value. The biggest mistake we see entrepreneurs make is that they need to be building that exit strategy. Building equity value is something to consider when you are in a position to sell. That is where we specialise. Software technology is a very fast-moving industry. There are businesses out there that are acquired by really large organisations before they even traded. So when is it going to be most beneficial for your business to be sold? It’s almost impossible to predict that. The mistake that business owners make is that they set that time frame too late. They think: “We will sell our business by the age we are 65, or we first need to grow internationally, or we first have to have developed our software up to a certain stage.” And that’s their target. And most of the time that is 5 to 7 years away from now on. But actually, the reality is they need to be building their organisation in a way they build assets: really early on. And I have seen organisations that could have been sold 5 or 10 years earlier and have got far more money. Start early and have that business in a state that it can be acquired at any time because the markets change really quickly.”
What is your sales & marketing advice for starting companies?
“If you are not from a sales and marketing background, go and find that experience. We talk about the sales engine at the heart of your business. Unless a sale happens, nothing happens. It’s all about selling your service or your products.”
Do you also have some sales & marketing advice for existing software companies?
“It is very important to create a viable sales engine. It needs to be a machine that flows. You need to be able to feed that machine with marketing leads. You also need to have a sales process that is understood by your own employees and not just the salespeople. It needs to be a documented process, and it needs to be efficient. It also needs to have a close relationship with the marketing. It might be useful to let an outsider take a look at it. Sometimes it’s very difficult to have an objective view on your own organisation. Bring someone in with experience in the software technology sector or in your area who can really give you some good advice. Don’t be too proud to take advice from others. And be honest with yourself. You need to take a really frank look at your own business, and you probably need to reinvent yourself every five years.”
Would you rather look at the video? Check it out here.