It's one of the biggest decisions a founder of a firm can make - whether to sell the business or not. But help is out there to make the experience more heartwarming than heartbreaking.
SoGlos speaks to Peter Mardon, board director and head of company commercial at WSP Solicitors, to draw on his extensive experience of the emotional business of buying and selling a firm.
About the expert - Peter Mardon, head of company commercial at WSP Solicitors
Peter Mardon has more than 25 years of experience advising businesses from initial concept, through start-up, growth, consolidation and exit. He is a director of a successful international manufacturing group and knows from first hand experience the value of expert advice and building long term relationships with trusted advisers.
How long have you been working in this sector?
I have been a corporate solicitor, specialising in restructuring, buying and selling businesses, for 32 years. During this time, I've acted on a wide range of businesses of all sizes, from corner shops and pubs to multinational companies.
Some of my most memorable transactions have included the sale of a Caribbean shrimp fishing fleet, the purchase of an adult entertainment shop and the purchase of a tech company in exchange for a luxury yacht.
I have a particular interest in engineering and have been a director of a multi-national engineering group specialising in the manufacture of valves for the energy sector.
What is the most common thing people don’t realise about buying and selling a business until they seek advice?
The time and focus needed to put a deal together and see it through to completion.
Clients can find the process overwhelming, so should seek legal advice at the outset to structure the deal efficiently.
Too often, clients only seek advice when the deal is already underway and having agreed things they should not have.
If you wanted to buy a business, is there a short checklist of things to consider first?
The most important thing, and this sounds obvious, is to ensure there is a viable business.
Many businesses are overly reliant on the owner (in effect, the owner is the business), so if you buy and the owner leaves, you have very little left.
It's also important to be really clear in your mind why you want to buy the business.
The best deals create synergy, so the business you buy adds value to your existing business and your existing business adds value to the one you are buying.
When you’re coming to sell your firm, what kind of considerations should you be making?
Undoubtedly the most important thing is to be very honest with yourself; do you really want to sell and sell at this point in time?
Very often, sellers cannot let go and this scuppers deals far more than anything else.
Selling can be an emotional step; for some, it's the emotional equivalent of letting go of your baby.
Buying or selling is a life-changing moment, what are some of the greatest joys of the job?
The best deals are where the seller has been the founder and poured heart and soul into the business, but has reached a natural point in life when it is time to move on. At this point, the founder wants the business to continue being successful, so finding a buyer who is going to take the business to the next level is a great match-up.
Founders usually care passionately about their legacy, so will want to the see the buyer make a great success of it.
Often, I will have acted for the founder, maybe a decade or more earlier when the business was set up, so I will have an emotional attachment too. It's great to see the business progress into the next chapter of its history and see the founder ride off into the sunset.
Could you share any unusual Gloucestershire sales you’ve helped with?
One of my employee’s mentioned that her husband had looked at buying a business, but was worried about giving up his job and taking the plunge. So, we looked again at the business and I could see what a fantastic opportunity it was and persuaded him to proceed. He had lots of doubts along the way and what got him over the line was me saying that if he did not buy it, I would!
The fear of losing the opportunity was stronger than the opportunity itself at that stage. Since then, he has made a huge success of the business and has created a really great lifestyle with a great work/life balance.
The most rewarding sale I worked on was by someone who had been bankrupted by his bank. He went to court, won and started the business all over again from scratch. He went on to sell it a few years later for a very large sum. All of his loyal employees shared in the proceeds of the sale and all his creditors were paid in full - even the bank!
In your experience, why is Gloucestershire such a great place to base a business?
Gloucestershire is very diverse, with a strong mix of industry and countryside, young and old, and a lot of innovation.
We are not reliant on a few big employers who may relocate away from Gloucestershire, but are built on numerous small and medium sized businesses needing a wide range of people and skills.
