I was one of the three co-founders of leading online accounting startup, Nudge Accounting. We successfully sold Nudge in March 2015 when Nudge was only two and a half years old. When we sold, Nudge was at a point where we were experiencing month-on-month the strongest growth we had ever had. We had a strong brand name in the market, and potential clients were getting in touch with us through referrals from existing clients. Added to this, our focus on providing good content through our blogs and contributions (such as to startup daily), had also earned us the top spots in google for online accountants and small business accountants.
So why did we decide to sell? And why would I give up being a founder of a high-growth startup for the uncertainty of starting all over again and in a completely new market?
Why we sold
It was in a co-founders meeting two years into the business when myself and one of the other co-founders presented to our third co-founder that we wanted to sell. We had both raised with each other that whilst we loved our business and our clients, we had lost a lot of the passion we once had. We found ourselves dreaming of other businesses and business interests. We knew we were at a stage in the business that to take it to the next level, we really needed to have our heart completely in it.
It was hard to admit at first, because Nudge was quite literally our baby. We had been working on Nudge a year or so before launching, and since then it had consumed all our thoughts. We also had grown close to our clients, many of which had become friends, and would be sad to end our business relationship.
A lot of our clients were startups, and we had been on the journey with them as their startup grew, and felt part of their team as we celebrated their successes and talked through the ups and downs with them.
We also knew that having a business with strong growth and brand presence, there should be good interest in our business and this would present solid financial opportunities when it came to the sale.
How did we sell?
In this meeting we had discussed how we would sell. For the three of us, this was our very first business we had sold. We had developed some strong relationships with other accounting firms who had taken an interest in us, and considered approaching them. We decided not to do this. We thought it would be best to approach the market as a whole to gauge greater interest. We then considered whether we would manage the sale ourselves or use a business broker. In the end, we decided to use a broker. This was the best decision for us.
While business brokers take a decent cut of the sale price (generally around 5% for the finance industry), we wouldn’t have had the time to maintain the strong growth while spending time filtering potential buyers. During the sale process, it was crucial to find a buyer who saw and understood the maximum potential of the business. For us it was also important that our story matched our performance so it didn’t give buyers the upper hand in negotiations.
Starting again – Itchy Baby Co.
Shortly after starting the Nudge sale process, I was having a coffee catchup with my sister Julia who is a pharmacist and mum to two toddlers. Her toddlers (my niece and nephew) had experienced very bad eczema and itchy skin since birth. Not happy with the existing products on the market, and lack of natural and effective products for toddlers, she had created her own bath soaks.
Since using these natural bath soaks her toddlers eczema had improved significantly. Now wIth the success she had managing her own toddlers’ eczema, Julia told me she wanted to offer the natural bath soaks to other parents and commercialise her natural bath soaks. Immediately I agreed to jump on board to manage the operations side of the business.
I have a very close relationship with my little niece and nephew and had seen the pain that they had gone through with their itchy skin. I wanted to be part of this journey with my sister. I really believed in it and the good it had done for my little niece and nephew. It was from there that Itchy Baby Co. was born.
I have to admit that starting a business in a completely new industry than what I had experience in has been a challenge, and it’s amazing how much the online startup space has developed over the last three years now that I’m entering it again with Itchy Baby Co.
However, one thing I didn’t realise was how transferrable skills are across completely different industries (accounting to health) and even when moving from a service-based industry to a product industry.
The key is that you really need to believe and live what you are offering to your customers. I think once you have a passion for business, whilst you may lose that passion in one business, you will find it in another and it will continue to reinvent itself.