Emerald Group Publishing Limited
Copyright © 2008, Emerald Group Publishing Limited
Haigh has brought all her expertise to bear in this highly interesting new book on buying and selling businesses. The world of mergers and acquisitions is such a complex one that without the kind of knowledge she can boast it is difficult to know where to start and therein lies the secret to her success. Buying and Selling a Business is a step‐by‐step guide that encompasses an enormous amount of topics related to the entrepreneur's journey towards a, hopefully, successful purchase or sale.
Haigh's biography is clearly the story a woman that has had a sizeable impact on corporate management in Britain. As an experienced dealmaker, she has the necessary hands‐on experience as a corporate financier to guide the would‐be entrepreneur from start to finish through the pitfalls and intricacies that surround the often bewildering experience of attempting to buy or sell a firm in its various forms. Her drive and skill have won her several accolades from the business world, including those of “Businesswoman of the Year, 2005”, “Yorkshire and Humber Business Advisor of the Year, 2006” and she has received international recognition by bodies such the American Biographical Institute. She is also the author of the bestselling book The Business Rules: Protect Yourself and Your Company From Over 100 Hidden Pitfalls (London, 2006). This first publication (now being translated and published in Chinese) highlights sound business practice and provides essential advice for SMEs. Its popularity encouraged the author to write this equally valuable guide for entrepreneurs considering buying into or getting out of an existing business. Her impact as a successful businesswoman and advisor has led the author to plan a new publication for the coming year entitled Women in Business. She is also a visiting fellow at Leeds Metropolitan University and a mentor for Enterprise Challenge undergraduates at Sheffield Hallam University.
The book is separated into three main sections. Part one contains the general groundwork needed to buy or sell a business. Part two is dedicated to the needs of the buyer and enters into the more technical side and the legal pitfalls of buying an existing business. The third section helps vendors to tackle issues such as the right time to sell, finding the right buyer, protecting staff and management and offers advice to owner.
As it is considered that entrepreneurship plays an important role in economic development, the entrepreneur and the creation of small firms is a determining factor for establishing a solid economic base (Goedhuys and Sleuwaegen, 2000; Studdard, 2006). The importance of entrepreneurship for the economy is reflected in its visible growth as a topic both from a scientific and business viewpoint. Although an entrepreneur does not have always have to adopt rational behaviour, Zafirovski (1999, p. 363) proposed that “entrepreneurs are normally prompted by motives and impulses that have little to do with rationally following up opportunities and profits, such as the power to create”. In Buying and Selling a Business, the subjectivity of the business is analyzed and broken down in an attempt to rationalize the process of buying and selling a business.
Part 1 begins by posing the most basic of questions for the would‐be entrepreneur, i.e. do I really want to do this? The amount of time and energy needed to run a business is made clear to the reader from the first page; having your own business may be many people's dream, but the author is quick to point out the practical aspects that are necessary in order to get the business exactly where you want it. In this context, she has a very clear idea that buying an existing business can be a whole lot easier than starting from scratch, pointing out that “three quarters of all start‐ups fail in the first year. A quarter of those that succeed in the initial 12 months flounder in the second year due to lack of knowledge and understanding of the market and also an absence of basic working capital” (p. 5). She goes on to state that other forms of business ownership such as franchises tend to entail a much lower risk of failure. In this first section, one thing becomes patently clear; that buying a business can be a laborious process and what may look like a simple deal taking perhaps six to 12 months can become long drawn‐out affairs that can last years. As a result, Haigh gives some sound and possibly crucial advice on laying the right foundations for buying a firm, advising the potential entrepreneur to be as ready as possible for any eventuality, particularly where funding is concerned. She provides both buyer and seller with a useful checklist and those that take the time to read this book will be forced to ask themselves several important questions about whether they are fully prepared or motivated to begin this process. For example, “Have you got the resources to make this work?”, “Have you got the right internal team?”, “Are your funders/family supporting you?”, “Have you got a first‐class external professional team?” This last question is something Haigh is particularly insistent upon: that the help of experienced professionals, though it may appear to be a cost that most new owners would like to avoid, is an essential factor for ensuring the future success of the business.
Part 2 starts with a chapter designed to make buyers aware of exactly what they are purchasing. Other topics dealt with in this section range from shareholders agreements to the legal framework of the deal, the different kinds of agreements that can and should be reached and finding sufficient finance. The chapter ends with notes on commercial, financial and legal due diligence and a useful checklist of pre and post completion actions to be taken into consideration.
Among other more technical issues, the third and final section offers advice to owner‐managers themselves on the advisability of staying on in the firm in some capacity. Despite offering sound advice for those that do decide to stay on, she has very clear views on the subject. “My motto for vendors is clear: sell out, get out and take your consideration in cash” (p. 163). The appendices contain some very useful and practical examples of letters, agreements and questionnaires that would provide vital information for both sides of the agreement.
One of the strengths of the book is that the author adopts a style that is unfussy, clear and follows a logical path through the “minefields that can affect a transaction”. It is true that some topics are dealt with rather lightly, but the objective of the author is to make the reader aware of the agents and issues rather than provide specific cases or answers. Though this book is aimed at potential entrepreneurs, academics will find it informative, entertaining and useful. One of the weaknesses of the book is perhaps its lack of depth in some areas, though logically this is remedied by reading specialized books and journals on entrepreneurship (Audretsch et al., 2005). I am sure that in her lecturing and mentoring, the author brings an air of reality and practice to the study of business management that should form an inherent part of any educator's portfolio.
It is clear that Haigh has been successful in reaching the objectives she set herself in writing this book. Buying and Selling a Business is above all a practical guide to the topic. Almost all of us have thought about having our own business at one time or another and, logically, the intention is for it to be a success. It is ridiculous to suggest that people go into business thinking that their project will fail, and as a means of support they use knowledge gained from useful books such as this. An easy‐to‐read guide to take them, almost step‐by‐step through the process which might galvanize the would‐be entrepreneur into action. In short, if your aim is to take a deeper look at entrepreneurship then this is perhaps not the book for you. If, on the other hand what you are looking for is a practical guide from a highly successful and experienced businessperson, and you possibly possess the necessary technical skills and knowledge of a product or service to move into business, but you lack the necessary business skills, then this is a highly useful tool.
Audretsch, D.B., Castrogiovanni, G.J., Ribeiro, D. and Roig, S. (2005), “Linking entrepreneurship and management: welcome to the International Entrepreneurship and Management Journal”, International Entrepreneurship and Management Journal, Vol. 1 No. 1, pp. 5‐7.
Goedhuys, M. and Sleuwaegen, L. (2000), “Entrepreneurship and growth of entrepreneurial firms in Côte d'Ivoire”, The Journal of Development Studies, Vol. 36 No. 3, pp. 122‐45.
Studdard, N.L. (2006), “The effectiveness of entrepreneurial firm's knowledge acquisition from a business incubator”, International Entrepreneurship and Management Journal, Vol. 2 No. 2, pp. 211‐25.
Zafirovski, M. (1999), “Probing into the social layers of entrepreneurship: outlines of the sociology of enterprise”, Entrepreneurship & Regional Development, Vol. 11 No. 4, pp. 351‐71.