Interview: 29 year old behind startup Bizdaq talks SME’s and what makes an entrepreneur
Meeting 29 year old Sean Mallon,founder of online business-selling platform Bizdaq and serial entrepreneur himself, was pretty refreshing.
A down-to-earth and completely unpretentious Yorkshire entrepreneur (and you may be unsurprised how many have reached Sean’s level without becoming completely insufferable) he has a genuine love for what he does.
I spoke to him about the complicated process of acquiring a business, his launch of Bizdaq as well as his championing of small businesses nationwide, from the independent coffee shop to the £2 million turnover business.
Sean, originally from Knaresborough, decided university wasn’t for him after attending a few lessons - becoming a bona fide entrepreneur with the launch of his business at the tender age of 21.
Bizdaq itself was only launched just over a week ago, with 250 buyers and sellers on board and targets already smashed for their first month.
Why Bizdaq, what gave you the idea for the firm?
Buying a business for people is making a total life change, and I wanted to make it easier for people who want to invest in a business, and to give them this opportunity and enable them to do that.
97% look online for small businesses and yet other websites only list them, rather than take people through the process, so I saw that gap in the market and went for it.
The idea behind Bizdaq was that everything happens online now and the costs of selling or buying a business are huge - and will seem even more so to smaller business owners.
So if you’re buying, say, a coffee shop worth £50k, an agent will take £5k or £6k in fees and you’ll pay your legal costs, so you could end up paying 10-15% of your sale value.
That sum is the difference between working for 10 years and being able to have a good holiday and pension, and having none of that. It’s the reality - it’s an expensive thing to do, buying a business.
There are around 5 million small businesses in the UK, and 1 ½ -2 million are small sole traders or really small firms so they don’t have the same kind of capital as a bigger business to spend on expenses while selling or buying, such as legal costs.
With businesses it is more complicated and subjective than, say, real estate, but we guide people through that.
Before Bizdaq, there was no real choice, you had to sell with an agent and sacrifice a big portion of your sale value, or you could put it on Gumtree or Ebay - it’s crazy but people were being successful on those sites.
But the problem they’d have is that they’d pay £50 and put it on Gumtree, but they wouldn’t know what information they’d need to sell the business unless they’d done it before, and each business is different. They would have no one to help them through the process, it was just flawed.
In a nutshell, Bizdaq is on the surface just a website, but the process behind it guides you through the whole process, exactly how an agent would, with the same confidentiality.
The system takes you right through to getting that sale document in your hand.
What can be done to encourage small business owners and make it easier on them?
Banks aren’t lending enough against small businesses, and this is probably the biggest barrier to owning one. It is very difficult for anyone to buy a business if they haven’t got the cash behind them.
Only a small proportion of the people interested in buying a business can afford to, sellers can’t get the best price for their business because, post-recession, they have to go for cash buyers.
High streets are reportedly half empty especially in the North, and small business owners who want to retire, for example, and sell their business, can’t. In one case I know of, there was a lot of interested parties but none of them could raise the funding, so this shop would have to close up, and everyone working there will lose their jobs.
SME’s also need a better knowledge of and access to funding. They often don’t know who to approach or where to go.
Bizdaq will be offering lending facilities in partnership with banks and get involved with finance specialists to counter this, and the balance is slowly being redressed, with more lending to small businesses, but it still needs to continue.
Did you explore any other avenues of funding for the idea before encountering Tim(Whitworth of high street retailer Republic)?
We did, but I think local funds saw it as too big of an unknown, they didn’t understand how a small business marketplace could be tapped into.
Any business of a value smaller than £2 million could easily use Bizdaq. After that it gets a bit more complicated and out of our target market range and you’ll need a proper corporate finance team, but people initially couldn’t see how it could work in the way we wanted it to, it was too much of a big idea to wrap your head around.
What are your targets for the future?
I want to establish Bizdaq as the most credible place online to buy and sell businesses. We want anyone buying and selling to think of us first.
Why did you decide to keep the operation in Leeds?
I’m a Yorkshireman, with a family here, and Leeds is a growing technology and digital hub, more than the city is given credit for.
There are a lot of really good digital agencies in Leeds, but there is definitely a skills shortage here, the advanced online and digital skill sets that we require means it’s hard work finding people - but we still intend to grow here.
What is your target audience, what makes an entrepreneur and what makes them right for Bizdaq?
Well we’re dealing with business people, and I think the term entrepreneur fits anyone who owns a business and anyone who’s passionate about a sector and wants to drive it to better things, from coffee shop owners to restauranteurs, small manufacturers, anything.
They are as much an entrepreneur as myself or Tim. Just because it’s one shop in Sheffield and only reaches so far doesn’t mean its not worthy of the term enterprise.
Small businesses really are my passion, they don’t get enough support and are given too hard a time, there’s too much red tape and not enough flexibility.
People underestimate how hard it is to run a business as the main business owner, have to do their own VAT, tax returns, bookkeeping, stock taking, not just a case of being able to sack it off on accountants.
These people are used to doing everything themselves and it’s the nature of the people using it, people with get up and go, familiar with people doing things themselves that we hope to attract.
Agents are an unfortunate necessity for some people, but Bizdaq gives small business owners the freedom to choose.
This was posted in Bdaily's Members' News section by Clare Burnett .
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