After ten years hard work building a successful marketing services business, its two owners were tired and wanted an exit:
‘As soon as we stop pedalling, the business slows down!’.Business Co-Founder
The challenge was that they had never discussed an exit between themselves, and each wanted something different.
Read this case study to understand how we found a way forward that met both parties’ needs.
An Investor’s Perspective
Before this challenge had become clear, and as a response to the Owners’ fatigue, we had an early-stage conversation about the different routes to building equity in a business.
We talked about the distinction between working on profitability and on their business as an asset. Specifically, we considered areas that would impact an investor’s assessment of its future earnings potential.
This ‘asset-based’ perspective was new to both Owners and they agreed to invest in a more rigorous assessment of it. We connected them with experts to examine the potential exit value of the business in more detail.
This focused minds and it became apparent that the two owners had quite different aspirations both financially and personally.
Business Exit Valuation
Two external specialists led an end-to-end financial assessment of the business, including workshops with the owners. One thing became clear: neither was likely to achieve what they wanted without more work on their business.
They would need to bring operationally critical yet contracted service providers in-house. The business also needed a more differentiated positioning versus competitors and a credible succession plan. Otherwise, an investor would quickly spot that the owners had been right; if they did stop pedalling by exiting the business, it might indeed screech to a halt!
The assessment recommended a series of actions which the Owners worked on over the following year. During that same year, they also won a number of industry awards.
Having done so, they still had different and largely incompatible aspirations that neither felt much closer to realising. If anything, they seemed further away!
Personal Aspirations and Options
During a new phase of coaching, we worked together to first distil what they each really wanted now and why. We then began to explore what some options might be, albeit none of us could see any obvious answers.
As is often the case, this process was iterative rather than sequential. As each began to connect more clearly with what they really wanted for themselves and each other, new and unanticipated options began to emerge.
Forging A New Way Forward
The Owners began to realise that exiting the business was not a prerequisite to achieve what they wanted. Instead they could restructure their respective relationships to it and the contribution they would each make, consistent with building a succession plan over the medium-term.
Rather than projecting their aspirations into a future post-exit, they realised that they might start to achieve them sooner. This in turn reduced the sense of urgency to sell, which might otherwise have cost them much of the potential value they had worked so hard to create.
The next phase was then to begin to build their capability to formulate and execute this plan.
Get In Touch
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