Buying a small business is not only about finding a “good deal”. It is also about structuring it in a way the buyer can finance, whether with or without their own funds, while protecting the business and giving the seller confidence in what happens next.

In the first episode of Season 2, Unsung host Will Maunder-Taylor speaks with Daniel Beaumont, a former chartered accountant who moved into his family’s textile business, experienced the emotional side of selling a company and then went on to acquire seven small businesses.

Daniel’s path into buying businesses started with his own experience on the other side of the table. After time as an accountant, he joined his family’s textile business in the North West of England, where he was “thrown in the deep end” and eventually helped sell the company in 2017 after its best year.

At first, the sale looked like the right outcome. The buyer had scale, the family had found an exit and Daniel stayed on to run the business as an employee. But the experience taught him something he would later carry into his own acquisitions: selling a business is an emotional journey, especially when the owner remains close to it.

As Daniel puts it, when you own a business, “you go home at the end of the day, and you take the business with you”. Becoming an employee again meant he still felt responsible for the results, but no longer had the same freedom to make decisions.

That experience shaped how Daniel now thinks about sellers. In his view, small business owners are usually looking for more than a headline price. They want some fair value, of course, but they also want freedom from the daily pressure of ownership and confidence that the business will continue.

Many sellers may want to reduce their time gradually, come back as a consultant, act as a sounding board or simply know that the team they built still has jobs in five or 10 years. Daniel describes the buyer’s role as being a “custodian” of what the seller has created.

That is where selling to a private buyer can feel different from selling to private equity or an industry buyer. Daniel does not dismiss those routes, but a private buyer can often be more flexible, especially when the seller cares about freedom, continuity, protecting the team and seeing the business handed to someone who wants to keep building it.

Daniel’s first acquisition came in 2020. Because he had signed a non-compete after selling the textile business, he had to look outside the sector he knew best. He considered several areas before focusing on manufacturing, partly because COVID had exposed pressure on supply chains and partly because manufacturing businesses often have tangible assets, a debtor book and staff who know how to operate the equipment.

He began by writing hundreds of letters to manufacturing companies in the North of England. The first deal came from an engineering company with a simple business model: customers sent drawings, the company quoted and, if it won the work, made the product. Daniel could not get on the tools himself, but he could understand the model, the cash flow and the sales challenge.

The way Daniel paid for that first business is one of the most practical parts of the conversation. The company owned the factory it operated from, and the sellers wanted to sell the business including the property. Daniel agreed a structure where the property would be mortgaged and used to pay the day one initial consideration, while the remaining agreed value of the business would be paid over several years out of net profits. 

Roughly two thirds of the total value sat in the property and one third in the operating business. Daniel found a property investor rather than take a commercial mortgage out himself, the property was sold on completion and the company entered into a lease. The remaining consideration was then paid from future profits. In later deals, he used variations of the same logic, including commercial mortgages himself instead of bringing in external property investors, cash from earlier acquisitions, invoice finance and deferred payments.

For Daniel, the discipline underneath all of this is cash flow. He says people talk about EBITDA because it gives a valuation on paper, but he always works out the cash the business actually generates. If a deal includes debt, deferred payments or a new general manager, the real question is whether the business can afford those commitments with enough headroom.

That clarity matters with sellers too. Daniel now tries to be explicit that deferred payments come from the operating cash flow of the business. He wants sellers to understand that if the business does not perform, the payments may not be made. That honesty can be uncomfortable, but it also helps both sides understand the risk.

In one case, a seller even extended the deferred payment period to reduce the annual cash pressure on the business. For Daniel, that is when a deal structure works well: the buyer, the seller and the business are all aligned around keeping the company healthy.

Daniel’s value-add after acquisition has often been straightforward rather than flashy. In the first business, he focused on management information, cash flow, quote volume, pipeline and sales activity. The inherited website still had a previous owner’s picture on it, so they refreshed the website, brought in simple PR support and used basic LinkedIn marketing to reach buyers. The pipeline (potential new business that had been quoted) increased by about six times.

From Daniel’s perspective, these were relatively easy wins because he was looking at the business from the outside while the team was focused on day-to-day operational issues. That outsider view allowed him to focus on the commercial engine: enough quotes, enough pipeline, enough future work and enough cash flow to support the business.

Daniel is clear that first-time buyers need to understand the acquisition process themselves at a high level. Lawyers and accountants matter, but the buyer is the one driving the transaction. If you do not understand the process, you cannot judge which risks are material, when advisers are arguing over immaterial points or when to push towards completion. They should also partner with the sellers and guide them through the journey and what to expect when.

For sellers, his advice is practical: prepare before you go to market. Get the accounts, contracts, bank statements and management information in order. Think about what the business looks like without you in it. Reduce customer, supplier or staff concentration where possible. Understand the legal process and how long it can take, because signing heads of terms is not the same as completing a sale.

As Daniel says, there are always surprises you cannot plan for: “There are some things which will crop up that you never thought of.”

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