We nearly lost our company. Now we’ve sold it for millions10th November 2021
A few months ago, we helped one of our clients sell the company they founded for several million pounds.
Any company owner would celebrate an exit that size.
But in this case, the achievement was truly monumental....
“Just a few years earlier, we would never have imagined we’d be able to sell!” marvels one of the former owners of Paralaw, Murray Duncan. “We were in administration...”
It’s one of the greatest turnaround successes we’ve ever been involved in and we’re enormously proud of the company’s achievement - and the role we played in it.
So today I’d like to share with you a real feel-good story, which also has some critical financial lessons for your own business.
We first met Murray and his co-directors in 2011. Just a little earlier, Paralaw, which provides paralegal services, seemed to be growing and profitable.
However, a major client had delayed payment to them - and this left them unable to pay a very substantial VAT bill.
The company was put into administration - and that could easily have been the beginning of the end. But rather than go into liquidation, they entered an agreement to repay HMRC on the unusual condition that we took over management of their finances.
“It was a super stressful time,” recalls Murray. “We had put so much time and effort into our company, and so had our staff. It was upsetting to think that it could all end. But we still believed we had a good business and wanted to continue trading.”
When we got involved, we realised that they had no forward-looking financial information like cashflow forecasts, monthly management accounts, budgets or even a Work In Progress document.
They essentially had no financial oversight of their business whatsoever - which is why they got into so much trouble.
We immediately put in place all the financial systems and processes that a company turning over close to £2 million should have as a matter of course. This made it easier to spot problems in advance and to plan the company’s growth. And we worked closely with them to help them make good financial decisions.
The impact was swift.
Previously, dealing with financial issues had taken up huge amounts of the directors’ time.
“We were stuck dealing with complications that shouldn’t have existed, and only happened because we didn’t have a proper finance function,” says Murray.
Now their time was freed up to focus on what they were good at, “which was keeping clients happy, not finance,” says Murray. “We proved that...”
They were immediately happier themselves.
“Insight freed us up from the paralysing stress of not being totally in control of our business.... We were much more relaxed when we could focus on our core competencies, selling our services and serving our clients.”
And the business result followed.
For a few years before they went into administration, the business was vacillating between £1.4-£1.6 million.
“For the next 10 years, we consistently grew the business at 15-18% a year,” says Murray happily.
By 2020, they were an attractive target for a large American company, which purchased them for a very respectable sum. We helped them through the process, preparing the documentation that allowed them to justify the price they were asking for; and dealing with the purchaser during due diligence.
“The way Insight dealt with the purchaser established a level of trust and got the deal done much faster,” notes Murray.
The moment when the sale was completed “felt brilliant,” he adds. “We went from the company nearly being taken away to a sale. And in the meanwhile, we had 10 years’ good living out of it - both for us and for 75 team members.
“I’m proud of it, and Insight should be too...”
Looking back at the journey they’ve been though, the key decision which made everything possible was “asking for help quickly, while there was still time to reverse things.
“Had we waited another couple of months we would have gone bust. And not just seeking professional help - but help from the best.”
That’s the power of world-class financial management.
And it’s something we can put in place for your company too - whether you’re currently distressed...
...Or whether you’re doing well and simply want to run your business more professionally, and set yourself up for smoother, faster growth.
Get in touch today by email or calling us on 01279 647 447 to find out how we can help you.
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