How and where to sell a consultancy business?

Zascar

A friend of mine has a business in a fairly niche area of consultancy - essentially he helps businesses grow and provides the full package of expertise and guidance in a specialist field. He's operated very successfully for many years but he's retiring now and wants to see if he can sell the it. Basically, there are no real assets to the company bar the strong brand, and a long list of fairly prestigious clients who he has helped in the past. However, the amount of knowledge and expertise he has built up in a specific area is pretty rare, there are a small handful of people doing what he does, and none with the full end to end service.

Although he's retiring, he would still like to have some sort of working life, so the idea I was thinking is to sell the business to someone who wants to take it over - but the package would include total handholding for a long period of time - training, teaching, giving advice as much as needed.

My friend is very good at what he does, his knowledge and expertise are second to none - and he's made very good money, but he's not the best salesman, very old school, and I personally think someone younger and more aggressive would be able to do great things with this company and really be very successful.

The questions remain, how does he do this, how much does he charge and how to find a person who this would be suitable for?

Any comments appreciated.

Zascar

Zascar wrote: »

A friend of mine has a business in a fairly niche area of consultancy - essentially he helps businesses grow and provides the full package of expertise and guidance in a specialist field. He's operated very successfully for many years but he's retiring now and wants to see if he can sell the it. Basically, there are no real assets to the company bar the strong brand, and a long list of fairly prestigious clients who he has helped in the past. However, the amount of knowledge and expertise he has built up in a specific area is pretty rare, there are a small handful of people doing what he does, and none with the full end to end service.

Although he's retiring, he would still like to have some sort of working life, so the idea I was thinking is to sell the business to someone who wants to take it over - but the package would include total handholding for a long period of time - training, teaching, giving advice as much as needed.

My friend is very good at what he does, his knowledge and expertise are second to none - and he's made very good money, but he's not the best salesman, very old school, and I personally think someone younger and more aggressive would be able to do great things with this company and really be very successful.

The questions remain, how does he do this, how much does he charge and how to find a person who this would be suitable for?

Any comments appreciated.

Ideally for something like this he would have a son or daughter to take over!

It seems to me a business where the main asset has been your friend, his knowledge and his skill it would be very hard to pass a business like that onto someone he didn't know already and have some form of trust for. He probably would be very upset if the person he sold/passed on the business to make bad choices (in his opinion) and ruined the business name and prestige he has built up (again in his opinion). Its also likely going to be a stressful transition to a younger person with different ideas and strategies.

My instinct for a situation like this would be either A. look for someone he knows already and trusts, and work with them to transition the business maybe maintaining an income from it as opposed to getting a big payoff, and take a mentoring role for as long as is necessary or B. be much more calculated about it and sell it for a payoff to another company or interested buyer based around the companies clients, and perhaps withdraw from the business completely after an initial transition period. If your friend is old school and likes things done a certain way like I said it could be a very stressful transition.

pedronomix

He is the only asset of value, he cannot clone himself, he has nothing to sell. He could wind down by renting himself to another firm who might pay handsomely to have access/exposure to his methodologies etc as he works with their clients....tough to find.
He is rather like a top Barrister, they are their sole businees asset and are in the same position. Curiously, gifted employees are in the same position..nothing to sell!

The Corinthian

As others have said, the company's principle asset is its principle and he's retiring.

Consultancies are service based companies, so their value is largely based upon the people in them. So how do companies like Accenture and KPMG survive in the long run? Typically through a long term strategy of maintaining consistent quality of service without reliance on and individual consultants, through constant knowledge transfer, standardized processes and the like.

Basically, in your friend's context, they would need to bring in someone to take over introduce them to clients, work alongside with them and eventually hand over. Additionally continuity of service - the same processes, methodologies and the like - would have to be demonstrably offered.

If your friend wants to sell his 'consultancy', he'll realistically need to do it this way - effectively 'sell' his customers to someone who would come in and gradually, over a period of a few years, take over.

Graham

Zascar wrote: »

there are a small handful of people doing what he does, and none with the full end to end service.

Could any of them be potential purchasers of your friends business? Subject to the hand-holding/knowledge transfer already mentioned.