My Journey Since Selling My Company
Welcome, dear readers.
In this blog, I'm going to discuss why I sold my last company and what I’ve been up to since then.
Sections as follows:
Source Accounting - last company
Capital Allocation - what I did with the cash
Personal MBA - what I focused on learning
Power BI - new business idea
Epilepsy - my epilepsy diagnosis
Abandoning Power BI - why I shut down this company
Inaequo - new company
Source Accounting was an accounting practice I founded in 2015 which was focused on SMEs and limited company contractors. I built this company up over 4 years before deciding to exit in 2019.
The client base was made up of around 80% smaller businesses and contractors, and 20% "traditional" companies.
A potential upcoming change to IR35 government legislation meant that operating as a contractor via a limited company was going to be lot trickier which would result in a huge decrease in the TAM (total addressable market) and potentially a loss of lots of clients.
The decision I had to make was:
"Do I cash out my chips now before this law comes in, or do I try and pivot the business?"
I thought long and hard about it and came to the conclusion that I preferred to work with the 20% "traditional" companies by adding real value to the business in a virtual finance director/controller capacity as opposed to just doing the accounts and tax return compliance work for smaller clients.
I decided to cash out my chips.
After speaking to a few potential buyers I managed to secure a successful exit. After the sale, I worked as a consultant for 6 months for the buyer to manage the transition process before exiting the business completely.
What would I have done differently?
I’m comfortable that I made the correct decision to sell the company based on the information I had at that time. Looking back, the things I would have done differently while running the company were:
Marketing spend - the vast majority of new leads came by offering an amazing service to existing clients, which resulted in a steady stream of referrals. As a result, my marketing spend was peanuts compared to what it should have been if I was truly focusing on growth.
Hire earlier - even in the later years I was still spending around 60% of my time doing client work. I should have hired additional staff earlier so I could spend more time “on the business” instead of “in the business”. I won’t make this mistake again.
Social media presence - having a strong social media presence is a huge advantage and can result in big opportunities. It’s like investing - the sooner you start, the more compounding the effects.
I used the cash & final dividends from the sale in the following ways:
I angel invested a portion of capital in a fintech startup (currently in stealth mode) founded by an amazing entrepreneur with who I’ve had the pleasure of working with over the last 4-5 years.
I’ve got high hopes for this one and it could be a real game-changer on a global scale. I’m sure I’ll be writing a blog on this in the future!
I invested the majority of the cash into a mixed portfolio predominantly made up of tech stocks. My current portfolio is as follows:
AAPL - Apple (tech)
ATVI - Activision Blizzard (gaming)
BNGO - BioNano Genomics (biotech)
BTC - Bitcoin (crypto)
BYND - Beyond Meat (retail)
ETH - Ethereum (crypto)
GOOG - Alphabet/Google (tech)
JAGX - Jaguar Health (pharmaceuticals)
KO - Coca-Cola (retail)
MSFT - Microsoft (tech)
NAKD - Naked Brands (retail)
NVDA - Nvidia (tech)
PLT - Palantir (data analysis)
SNOW - Snowflake (cloud data storage)
SOL - Solana (crypto)
TSLA - Tesla (electric vehicles)
TRUP - Trupanion (pet insurance)
TWTR - Twitter (social media)
V - VISA (finance)
The above is NOT investment advice. Always do your own research and don’t rely on some random person from the internet for stock tips.
I kept £10k in liquid low-risk investments as a "rainy day" fund for emergencies. This cash was effectively "blocked off" and forgotten about and only to be used in an emergency.
The rest of the cash was allocated to general living expenses for the next 24 months while I planned my next move.
Now that I had at least 24 months runway and no other commitments, I decided I would allocate a few months to close some knowledge gaps.
I brainstormed a list of topics I wanted to learn more about and took various online courses and read lots of books.
The topics I decided to focus on were:
Digital finance - new technologies and their impact on the financial sector
Data analytics - analysis of data sets to draw conclusions
Systems design & process mapping - designing complex processes and systems
Economics - something I had always been interested in but never properly studied
Logic & tools for thought - how to “think” better and analyse problems using different models and tools
My next business idea was a Power BI & financial consultancy company. Power BI is a tool that can visualise data to produce dashboards - this kind of thing:
The idea being that the company would target £500k - £5m revenue companies and provide the following services:
Design & implementation of Power BI dashboards which allowed companies to track their financial & non-financial data. Power BI would link directly to the client’s software packages and pull through the data in real-time (where possible)
Virtual finance director services for cash flow modelling, reporting and forecasting
Compliance accounting & tax returns
Strategy support and benchmarking
Mindmapping is my tool of choice when it comes to planning, here is a screenshot of how I planned out the business (and indeed how I do most of my planning):
I spent around 3-4 months working with a co-founder to develop the idea and we were almost ready to launch and start marketing, until something happened would cause me to re-evaluate everything……
I was in the car with my dad on a trip to visit my parents when all of a sudden I had an epileptic seizure (this has never happened before).
Thankfully I was not driving or I might not be writing this today.
My dad took me straight to the hospital where I was admitted to Accident & Emergency and suffered a further two seizures.
I woke up with zero recollection of what happened, the last thing I remembered was being in my apartment. I looked around and thought “UMMMMM WTF!?!?”. I was super confused and thought I had been abducted or committed to a psych ward.
My phone had no charge so I decided “I’m getting out of here” and that I would rather go down fighting so decided to make my escape. I disconnected the IV drips and picked up the nearest weapon I could find (my belt in this case) and exited the room into the corridor.
I walked down the hall holding the belt ready for some combat (in retrospect, a bad decision as I was weak as a kitten) and I encountered a nurse and walked forward with my belt demanding to know where I was. The nurse took a few steps back and managed to calm me down and explain the situation and then brought me back to my room and a doctor came along and explained what happened.
After spending a couple of days in the hospital, I was put on an anti-epileptic medication called Levetiracetam (also known as Keppra).
Keppra has an effect called Keppra Rage, which causes you to get pretty angry and agitated for no apparent reason. You can be having a great day and then all of a sudden *BBBbbzzzzzz* emotion drop and angry.
This was pretty tough to deal with for the first few weeks but got a lot better once I got used to the medication. These days it only happens once every couple of weeks, however, everyone has a bad day once every few weeks so it’s a price I’m willing to pay to keep the condition under control.
I also had to hand back my driving license and I’m unable to drive again until I’ve been seizure-free for 12 months. I’m happy to report I've had no further seizures since the initial incident and assuming all goes well, should be able to reapply for my license Q2 2022.
I had never previously had a seizure so being diagnosed with epilepsy came as a bit of a shock and caused me to flap a bit (pun intended). I spent a lot of time over the first week or two thinking really hard about my life and priorities and decided to focus on the following areas:
Health - I was always pretty healthy, but decided to make this a top priority. I cut down on carbs, sugar and junk food, increased the amount of daily walks and upped the intensity of my workouts.
People - I now have zero time for any bullshit. If a person is remotely toxic or a bit of an asshole, they're removed from my life. Life is too short to deal with toxicity.
Ambition - If I was driving my car the day I had a seizure, things could have been very different. I thought about all the things I wanted to achieve and decided to double-down and work harder to achieve my goals.
Abandoning Power BI Business
After carrying out some analysis, I decided to abandon the Power BI business. Reasons as follows:
Pace of technology
The ease of use and accessibility of data visualisation technology for my target market (£500k-£5million revenue companies) over the last few years has increased exponentially and is only going to get better and better.
Tools like Fathom, Syft and Spotlight Reporting connect directly to cloud accounting software like Xero and they had released major updates which meant that the reports were easier and quicker to produce and looked better than Power BI.
Here is an example of a report which was generated using Fathom
Power BI does have third party connectors that can link into cloud accounting software, however, these are fairly limited in terms of their flexibility. Knowledge of a coding language called DAX is required to properly build a model.
Power BI & DAX require additional skill and time to implement and a custom model would need to be built for each client which eats into profit margins.
Why pay a Power BI developer a £50k salary when I can use a tool like Fathom which costs £33 per client license and is fairly user friendly?
Makes no sense for my target market - right?
I came to the conclusion that Power BI was best suited to companies outside of my target market (£5m+ revenue) with more complex data sets. I gave the bad news to my partner (he was the Power BI developer) and then brainstormed a new business idea.
Inaequo means "level up" in Latin is closely related to the previous idea of data visualisation and consultancy, but uses different processes, tools and workflows than the old Power BI company.
The process works as follows:
Step 1 - Getting to know you
Have a chat with the business owner about their vision for the future - some entrepreneurs are interested in building up a business quickly to sell and then moving on, while others are focused on growth.
It’s important to understand the entrepreneur’s motivations from the start
We then carry out a strategy session which includes completion of a Business Model Canvas and guided questions so we can get a full understanding of the business from all angles
Step 2 - Finance operations
A review of the bookkeeping and accounting data using AI and manual analysis and identify areas for improvement.
A finance systems audit and identify areas where we can introduce technology to reduce debtor days, improve cash flow and reduce time spent on payments.
Step 3 - Review & forecast
Full KPI & financial performance analysis of the company’s historical performance with follow up session to review.
Discussion around non-financial data (website visitors, social media followers etc.) to track and include in future reports.
Creation of a budget along with a detailed 3-year cash flow, P&L and balance sheet forecast and assignation of targets.
Step 4 - Ongoing reporting
Beautiful monthly KPI performance reporting along with custom written analysis and commentary along with access to dashboards to monitor data.
In-depth quarterly Zoom meeting to review performance, readjust any KPIs & targets and offer strategy support.
Step 5 - Compliance work
Taking care of the tax returns, accounting, bookkeeping etc. with a laser-focus on tax efficiency.
I hope you’ve enjoyed this trip down memory lane.
My goal is to grow Inaequo into a market-leading accountancy and advisory firm along with growing my social presence. I’m toying with the idea of starting a podcast and starting to push out some content via video as opposed to just writing.
Let’s see what happens over the next few years 😉