How I unexpectedly negotiated to sell my company

Andrew Johnston founded Alliance Environmental Engineering five years ago, and since then the 37-year-old has turned the company into a solid business turning over $3.8 million a year.

But this year he received an offer to sell the company. It was something he wasn’t considering at that point – but he tells SmartCompany how he eventually made the decision to turn the business over.

So why sell the company?

It seemed like a good opportunity. The offer was attractive enough to set me up but also enable me to get into different lines of work if I wanted. It was a different role, rather than having the headaches of human resources and so on.

I’ll still run Alliance, but eventually it will just all merge together. It’s a good thing.

Did you ever think about selling at some point before this?

That was always the goal. I didn’t expect it to come at this point in time, we’ve been running for about five years but the first two-and-a-half were just me working out of my lounge room. I employed my first people three-and-a-half years ago, and now we’re at 14 plus a heap of contractors. I thought I’d be ready to sell in about 10 years, and the goal was to grow a national network.

We were just starting to get to that point when the offer came through.

I actually rejected it at first, saying that I wasn’t ready. But they kept knocking and made me another offer. It seemed pretty good.

What would have made you reject the offer?

If they offered an amount and didn’t give me something attractive, it wouldn’t have been a good deal. I wouldn’t have considered it. But there were a few things about it that were good. First, the money; and secondly, the role they have me earmarked for is good. They’ve got some big mining clients I’ve spent 10 years trying to get involved with, and I see me accelerating growth in those areas.

What about the money?

It’ll definitely open up opportunities. I’ve had the company valued by a few people, and they suggested the amount was favourable. It’s also good to reduce the amount of the risk that I’m carrying. I mean, we’re giving advice to some pretty big property developers and clients. There’s always risk, but the bigger you get the more you have to think about the advice you’re giving.

Story continues on page 2. Please click below.