Small Business: Planning your exit and selling up

Robyn de Bruin-Judge and her husband Wim sold their business de-Bruin-Judge Furniture in May this year.

This week, a look into how small to medium-sized New Zealand firms planned to exit their operations.

In May this year Robyn de Bruin-Judge and her husband Wim sold their business de-Bruin-Judge Furniture, which produces bespoke kitchens, furniture and fit-outs.

You very recently sold your business de-Bruin-Judge Furniture. What were your motivations for exiting the business at that time?

We founded the company when we were in our twenties, which was young to start a manufacturing business, so after 21 years we felt that we'd achieved our goals and vision for de Bruin-Judge Furniture. The company has grown a lot and we feel it's time for it to move to the next level under someone else's guidance. We took the opportunity to establish one startup and one emerging brand under the umbrella of our larger company, and now it's time for us to put our energies into those. We love the buzz of entrepreneurial ventures.

Can you talk me through the main practical steps involved in the exit process? What things did you do to ready your business for sale?

I think many of the factors that contribute to a successful exit are just good business practice for growing companies - things like establishing and documenting systems, upskilling staff, delivering strong and consistent financial performance, making sure plant and machinery function well and that the premises are tidy and presentable.

We held the international environmental standard ISO14001 and ACC Tertiary Certification, which demonstrated to potential buyers that we had robust systems. We also consulted our accountant - BDO - and brokers to get an understanding of how businesses are valued and what our company might be worth in the market. Due diligence is demanding so you need to have good business records.

COMING UP: Social enterprises balance doing business with doing good. What are some small Kiwi companies doing in this space? If you've got a story to tell, drop me a note.

What did you find the most challenging aspect of the exit process?

Definitely it was telling our 38 staff that we had sold the business. We have great relationships with our staff and quite a few had worked for us for 10 years or longer. Carefully planning the announcement and follow up and just being straight up and available was important. People didn't necessarily anticipate the sale as they might have if we were closer to retirement age.

One of the big challenges that can face owners who have exited a business is 'seller's remorse', when after a few months they find themselves twiddling their thumbs. What sort of planning did you do for life after exiting de Bruin-Judge Furniture?

I miss the daily interaction with staff but can honestly say I'm still hanging out for a day off! It's been really busy tying up transition details from de Bruin-Judge Furniture and establishing an independent profile for our high-end kitchen design company, AVÉORA Design Studio.

We also have a research and development venture and we're in the process of commercialising the IP we've developed in that offshore. So there's a lot of new learning and plenty of new challenges to keep us focused.

As someone who's 'been there and done that' what words of advice would you have for business owners currently without an exit strategy or plan?

Talk to your advisor early in the process and attend a seminar or do some reading so you have time to prepare your company - sometimes years in advance. That will help you get maximum value from your years of input when the opportunity or desire to move on arises.