Trust Your Instincts – How to Sell Your Business
Entrepreneur Nicole Kersh has sold 4Cabling, the business she founded at age 21, in what she describes as a “heart-wrenching experience”.
“There’s so much literature out there about starting a business and a lot of emphasis on start-ups and how exciting it is,” Kersh says. “But there’s very little that can prepare you for selling and letting go and all the surprises along the way.”
Kersh founded 4Cabling, an online retailer specialising in technology cabling for consumers, when she was 21 and built it up to mid-market size before selling earlier this year. She says revenue was $10 million a year at the time of the sale, and profit was a healthy percentage of that.
The buyer was family-run private equity firm Gernis Holdings and the price was undisclosed, though Kersh describes herself as “very satisfied”. BRWestimates the price would be in the millions based on the company’s revenue and growth. Kersh owned 51 per cent of the business and her mother was the other main shareholder.
Kersh says she was fortunate to have a pipeline of potential buyers approaching her about acquiring 4Cabling, but Gernis was not the first. In hindsight, she says it is very easy for an entrepreneur to get “manipulated” by potential buyers and it is important to surround yourself with good advisers and above all to trust your instincts particularly if something seems too good to be true.
“The first offer we had was very alluring and attractive and we went through all the due diligence and at the last minute, the conditions changed and [I believe] the buyer wasn’t sincere, it was actually an exercise in market research on his behalf,” Kersh says.
“There was nothing illegal about it, but [I felt] it was unethical. It was an incredible learning curve on my part that people are not always what they say they are.
Taking stock
“So the second buyer that came along we treated with a little more scepticism and decided to pull the plug on that one because it just didn’t feel right.”
Going through the process with the first buyer was not a complete waste of time as it forced Kersh to take stock and crystallised her desire to sell the business. Before that, she had been too wrapped up in sustaining growth to think about the longer term.
“From where the business is at now, what it would take from me in terms of investment and my skills to take it to the next level wasn’t something that I was interested in,” Kersh says. “For me, it was about reaching that goal and moving on so it started to feel the right time.”
Kersh says the things that made 4Cabling appealing to buyers were the strong web presence, company culture and the high-growth trajectory.
After the sale, she and her partner went on a walking holiday in Spain and Portugal, partly a belated honeymoon and partly a way for Kersh to think about what she wanted to do next.
“I got married in January amidst due diligence and a handover,” Kersh says. “It was an ‘I’m so sorry that I spent our wedding day looking for a fax machine’ holiday. The apology was accepted. My wife is a creative director and she brings a nice creative energy to our home, whereas I’m quite left-brained.”
After spending her 20s watching SEO results for 4Cabling, Kersh had grown to love the digital marketing side of the business but she was less enthusiastic about manufacturing. She could not imagine applying for a job so she is starting another business.
The new venture is a web content agency called The Content Folk and the site is currently under development.
“It’s not content for contents sake, it’s content with purpose,” Kersh says. “Content is a buzz word at the moment and everyone is talking about engaging via content but I don’t think people really understand how to create content. For me, it’s . . . about sharing your voice. That was something that with 4Cabling that really worked for me, giving the company a personality and engaging via genuine content.”
*Oringinal Article by Caitlin Fitzsimmons: http://www.brw.com.au/p/business/mid-market/trust_your_instincts_cabling_founder_Jnef8uVSRTNb9h7BAoWjtK