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Post by Deleted on Nov 18, 2018 17:14:26 GMT
>>Presumably a combination of educating others/handing on acquired knowledge, and seeing a new challenge to have a go at?
Most certainly both of those, but also a fair chunk of paying it forward.
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Post by Deleted on Nov 18, 2018 17:17:03 GMT
>> if the buyer was a large corporation, who would be much more likely to do as you're suggesting than a business which is only slightly bigger than Espada's.
And this is my point precisely. I do not have the words to concisely tell you how far wrong you are. Dealing with a small[ish/er] company is far, far more dangerous, complex and unpredictable. Way, way more. Not for someone like me of course, but for the person doing the selling.
I can see why you think what you think, but you are quite wrong.
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Post by Deleted on Nov 18, 2018 17:24:45 GMT
Sorry to reply piecemeal, I could have thought this out better;
>> to get out if things don't suit him, and set up a consultancy.
I bet you a million to one there's a non-compete in there somewhere.
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Post by Humph on Nov 18, 2018 17:27:01 GMT
As you said Otto, it's the little things more than the big ones that serve to at least niggle. When you've been used, for many years, to making your own decisions and standing or falling by them, even feeling slightly obliged to occasionally justify them to someone else can feel a bit odd.
I'm lucky enough to have almost total freedom to choose when, where and how I spend my time or direct my efforts, so I've little room to complain, but it is different to being your own boss.
Hard to explain really, and I shouldn't grumble. Just me probably. I'm sure if it's right for you Espada, then you'll make it work for you.
All the best in any event.
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Post by Deleted on Nov 18, 2018 19:21:58 GMT
You are all very kind with your good wishes and well meant advice. In particular Otto makes many valid points and as Avant has said, I would be very surprised if I was doing this with a large corporate. I am lucky to have by my side three people; my FD who is a Chartered Accountant of over 45 years experience; the family and company accountant who is also a close friend and my father, who despite being 84, has the brains (and body) of someone much younger. He has been in the UK for the last couple of weeks, which has been helpful.
We were all very skeptical initially, and probably the approach came about two years too early, but my view was that; 1 - we had to listen to what they had to say; and 2 - I looked at all the other firms in Manchester and couldn't really work out who else might be interested in my firm in two years time. The one other firm who I might have thought would be interested in principle, is run by people who are my age or older.
Luckily I do know the MD, have met the FD and know some of the other senior people, so if the MD does fall under a bus the day after we sign, I am fairly sure that after a period of panic, things will be OK for me.
Having said all that, we have to sort out the money..... Want I want and what they have offered are some distance apart, but I reckon we can square that circle. I am taking it very slowly and not chasing them; in fact it is obvious that they are keen to get us, so I am relaxed.
The beauty of the interest is that they have identified some weaknesses in our operation (in terms of staff) which we have taken steps to deal with, so that if it doesn't work, I will have a stronger business than before.
I do have to get my head around being an employee again for a few years, but they know what I need to be an effective worker. I have taken on people of a similar age in my business and they tend to be hard workers who if you leave them to their own devices, get on with it and produce the fees without thinking about it. I intend to act in the same way, if permitted and hopefully they will be happy with the results.
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Post by Deleted on Nov 18, 2018 19:30:32 GMT
All good news.
Make sure there is something in the contract about exit. Either them wanting you out or you wanting to be out. Be careful of what events payments may be tied to. e.g. you get ill and need to retire. Or you need compassionate leave. These must not impact your payments. Make sure it is set out in writing what they expect from you. Have some kind of resolution/arbitration approach in place.
The more and more you document, the safer you will be. People believe contracts can be restrictive, in fact done properly they are liberating for all concerned. They avoid misunderstanding, resentment, irritation or frustration.
My last moment of teaching you to suck eggs; None of you, your Father, your FD, the Family accountant represent objective advice. The more time you have spent doing something the less time you have spent experience variety.
As I am sure you are aware, valuing a business is an argumentative affair with a bunch of approaches. Your comfort with an agreement is more important than hammering every cent out of it.
Enough.
If you pull it off then it is a success that you should be very proud of. Very few people create their own business, fewer make a success of it, and hardly any get out of it successfully.
Well done and good luck.
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Post by Humph on Nov 18, 2018 19:37:44 GMT
Hey, and if you work jolly hard, in time, you might qualify for a company Fabia ( with metallic paint if you're really good )
😉 ( joking ! )
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Post by Deleted on Nov 18, 2018 20:20:02 GMT
Otto
That is useful advice. What happens if.....
I'll bear it in mind.
Thanks.
And Humph, it's not me who won't have the Skoda, it's Espadrille. I'd take a Fabia any day. I'd even have a Felicia... But perhaps not a 1977 Rapid!
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A-levels
Dec 16, 2018 11:33:04 GMT
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Post by Deleted on Dec 16, 2018 11:33:04 GMT
The deal to sell my company is making good progress. Some of the points Otto made were very valid and we have done some tweaking at the edges of the deal to incorporate changes which make life a bit easier in the event of things don't quite work out as planned. The main issue is that if the purchasing company goes into administration or worse then the name of my business automatically reverts back to me.
The overall package is fair. In broad terms it matches what I said to my FD what I wanted and further discussions with the buyers indicates that we are pretty much on the same wavelength as to how the company will progress over the next 5 years.
The interesting thing is that I made a previous comment about not be able to identify another company in Manchester with whom it was sensible to merge. I have spent the weekend making a list of all the appropriate companies my son should approach to seek a year's placement as part of his degree. Having identified about 20 companies I realised that whilst I knew and trusted pretty well all of them there wasn't one who I would either would want to work with or if I did they were too small and too niche to actually merge with.
There are a couple of points that we need to firm up before we go to heads of terms and this week I will be meeting the 4 other directors who I have not yet met formally to discuss how various departments will merge and where there are some niche clients who need treating differently to the general client base. If that works then all being well on April the 1st....
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Post by Humph on Dec 16, 2018 11:35:55 GMT
April the 1st?
Oooookay...
😉
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Post by Deleted on Dec 16, 2018 14:06:09 GMT
That also sounds good, and sounds like you're taking a thoughtful approach.
Just a couple of things which you may already have thought out, but better said needlessly than missed;
Protect the company name in the event of a sale. You don't want it sold to a bunch of cowboys. Protect your position if the company is resold. Ideally you want a way to insist on being paid off and released. Be careful about being restricted by a non-compete. It is, to an extent, inevitable, but you don't want it too broad or too long. Discuss employees; redundancies (process, criteria and terms), protection of existing terms and benefits, process in the event of change in terms or role. Discuss how long anything you put in place now (e.g. niche customer management) must be retained
And finally make sure you have your head around the idea that the company is no longer yours, the leadership is no longer yours and that it will live without you. It can be an emotionally difficult shift in approach for you.
The very best of luck; a fantastic validation of the worth of all that you have done over the years is that someone else wants to buy your company. Approval doesn't come any higher than that.
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Post by Deleted on Dec 16, 2018 15:20:41 GMT
Thanks.
Some of your points are valid, very much so - others less so in this situation. Once I sell, I become a shareholder and director together with only about six others. So any decision to sell will be made by Chartered Surveyors who have reputations to uphold so they won't just sell to anyone. I will be the oldest so if any sale is considered, they will have to keep working (like me now) and will not want to work for a dodgy firm. Valuations in particular are very reputation sensitive; Manchester is a village in that regard and we all know that if you are told that 'so and so' valued a building, then you take their opinion with a large pinch of salt.
Certainly we have discussed those employees that I feel would work well in the expanded firm and would be a great benefit; and others whose loss I and they would not miss. If I was walking away, I would not be doing this deal. But I can see myself in the expanded firm for the next five or six years and that will give me the time to consider all options post my daughter reaching University or even graduating.
And I am very happy to be handing over the reins of power to a more focussed and yonger team. I shall simply get on with my professional work and be as involved in business management as much as they want me to be, but I know it won't be that much. I will not be volunterring for stuff. Been there, done it and got the T-shirt. Time for others to become decision makers.
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Avant
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Post by Avant on Dec 16, 2018 15:36:10 GMT
Leaving aside the finances for a moment, from a personal and professional point of view that could be a very good place to be in at a time of life when you're too young to retire but have already got to 'the top' in terms of running the business. Your business has been successful largely because in the first place you were good at the job that you trained for. It should be gratifying and rewarding to go back to that professional work.
Best of luck.
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Dec 16, 2018 17:27:39 GMT
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Post by Deleted on Dec 16, 2018 17:27:39 GMT
Thank you.
I am looking forward to doing more work in the RICS, particularly in the area of qualification of trainees, where I have done bits over the years.
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Post by Humph on Dec 16, 2018 18:51:51 GMT
Yes indeed, best of luck Espada, if this is the right move for you, then enjoy all that comes with it.
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