The Business Owner: Sean Mallon, bizdaq
Backed by Republic's Tim Whitworth, bizdaq's founder explains why it's worth the wait to find the "right" investor and why cash really is king...
Founders: Sean Mallon
Proposition: Online platform to help business owners buy and sell small and medium-sized businesses quickly and easily
Size: 6 employees
How is your business different from what’s already out there?
Bizdaq is an online platform to help business owners buy and sell small and medium-sized businesses quickly and easily.
Traditional brokerages tie business owners into strict 12 month contacts, are often too slow to act and charge sellers up to 15% of their sale fee. Bizdaq is about giving small businesses the tools needed to complete their sale as well as giving them choice.
We want to give them more freedom to choose the option better suited to their needs. While a typical business transfer agent may take a commission of up to £15,000 on a business sold for £100,000, Bizdaq expects most of its subscribers will only ever pay an average of £500 to find a buyer and complete the sale, saving thousands in agents’ fees.
How did you finance your business?
I put some of my own capital and equity in there to raise the funding, but overall we raised £1m from a seed funding round. This venture funding came from respected British entrepreneur Tim Whitworth, co-founder and former chief executive of clothing chain Republic.
It was difficult as it was a very long process, taking the best part of 12 months from start to finish to find someone. For me, it was more important to find the right investor. I didn’t want to end up securing funding from a board of investors who didn’t share my passion for what we were trying to achieve.
What is the most important thing to keep track of in business and why?
Cash – many businesses fail, even good ones, because they spend too much time looking at P&L’s as opposed to keeping track of their money and cash generation processes.
What is the biggest day-to-day challenge you face?
The biggest frustration I face is probably not being able to move fast enough. I’m sure any aspirational business owner is likely to feel the same way. In the past, finance has probably been one of my biggest challenges. Although I have moved past that stage now, I remember when we were trying to grow – we were a profitable business trying to raise funding and the banks weren’t interested at all.
What marketing techniques do you use to attract new customers?
Like most businesses, we utilise social media as a marketing tool for brand awareness and attracting potential customers. It’s a cheap and effective marketing tool which allows you to respond instantly to industry developments and become heard in your field.
We also use it to indirectly boost links to our website content which improves traffic and search result rankings. We also find that content marketing is an effective technique to increase inbounding traffic to our site, build brand awareness through engagement and generates natural link popularity for SEO.
Do you think it’s important for small businesses to export, any tips?
I think exporting is an important option to consider if small businesses want to expand. Levels of growth can be achieved by exporting that would not be feasible domestically. The benefits of accessing new sources of revenue and introducing your business to new markets could significantly increase your potential revenue and exposes you to a wider market range. It is for these reasons that we are planning on moving into European markets within the next few months.
My tip would be to make sure you do your homework prior to making the step of exporting. It’s one of the biggest business decisions you will make which exposes you to risk which comes from unknown variables. It’s therefore vital that you research your market thoroughly before committing to the decision. Small businesses should also take advantage of the fact that trading abroad has become significantly easier over the years as a direct result of the internet. For example, UK Trade and Investment’s (UKTI) e-Exporting Programme can help UK retailers and brands sell products overseas through online channels. This provides small businesses with simpler and quicker ways of increasing reach of their brands globally as well as identifying new e-marketplaces around the world.
What’s the business app you couldn’t do without?
Zopim as it enables us to immediately engage and interact with potential and current customers by inviting clients to chat rather than waiting for them to take the initiative. This real-time interaction provides us with immediate customer feedback that we wouldn’t be able to access elsewhere and the app’s customisation features allows us to tailor and personalise chat invitations to suit us.
The other is Xero. As a small business, we faced various challenges using the conventional and restrictive desktop packages, however, Xero is specifically tailored to meet the needs of small businesses and its unlimited user access gives us the ability to work as a team on our businesses finances.
Describe your company’s culture in three words:
Empowering, trustworthy and committed.
What would you like the government to do for small business?
Create simpler accounting rules. Small business owners find themselves spending large amounts of time, at the end of the year especially, making complex accounting adjustments.
These, along with other required accounting calculating, are designed for larger business in mind, so simpler accounting rules created specialty for small businesses would make managing accounts a much easier and time efficient process.
Who’s your biggest small and medium enterprise hero?
Roy Drury, Xero’s founder. He founded his accounting software company in 2006 and has since managed to expand into over 100 countries with over 400,000 global customers.
Where do you want the business to be in three years?
My sole focus is on getting Bizdaq to become the only place where UK businesses are bought or sold. We are looking to move into European markets as well as a longer term vision of entering the US market within three years. However, for now we are grounded and clear in our approach that we must concentrate on disrupting the UK market successfully first.
What’s your top tip for keeping it lean and making profit?
Take a bottom up approach. It’s hard to become lean from the top down. Improving efficiency starts at the frontline so allow the ideas of outward facing employees flow up the chain.
Delegating some control and empowering employees to change processes that aren’t efficient can dramatically improve business performance. All business processes should be regularly analysed for efficiency and poor performing processes should be replaced or eliminated.
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