Thinking of buying a business in 2023? WSP Solicitors advises on what to weigh up first
It’s one of the biggest decisions a company founder can make – whether to sell the company or not. But help is out there to make the experience more heartwarming than heartbreaking.
SoGlos spoke to Peter Mardon, Board Director and Head of Company Commercial at WSP Solicitors to draw on his extensive experience in the emotional business of buying and selling a business.
About the Expert – Peter Mardon, Head of Company Commercial at WSP Solicitors
Peter Mardon has over 25 years of experience advising companies from concept through incorporation, growth, consolidation and exit. He is a director of a successful international manufacturing group and knows from personal experience the value of expert advice and building long-term relationships with trusted advisors.
How long have you been working in this area?
I have been a corporate lawyer for 32 years, specializing in corporate reorganizations and the acquisition and sale of companies. During that time I have worked for a variety of companies of all sizes, from corner shops and pubs to multinationals.
Some of my most memorable transactions have been the sale of a Caribbean shrimp fishing fleet, the purchase of an adult entertainment business, and the purchase of a technology company in exchange for a luxury yacht.
I am particularly interested in technology and I was director of a multinational engineering group specializing in the manufacture of valves for the energy sector.
What’s the most common thing people don’t realize when buying or selling a business until they seek advice?
The time and focus it takes to put a deal together and see it through to completion.
Clients can find the process overwhelming, so they should seek legal advice at the outset to structure the deal efficiently.
Too often, customers only seek advice after the deal is already underway and things have been agreed upon that they shouldn’t have.
If you’re looking to buy a business, is there a quick checklist of things to consider first?
The most important thing, and it sounds obvious, is to make sure there is a viable business.
Many companies rely too much on the owner (the owner is, in fact, the company). So if you buy and the owner leaves, you have very little left.
It is also important that you are clear about why you want to buy the company.
The best deals create synergy, so the business you buy adds value to your existing business, and your existing business adds value to what you buy.
What considerations should you make if you want to sell your business?
The most important thing is undoubtedly to be very honest with yourself; do you really want to sell and sell at this point?
Very often sellers can’t let go and these scuppers offer far more than anything else.
Selling can be an emotional move; For some, letting go of your baby is the emotional equivalent.
Buying or selling is a life changing moment, what are some of the job’s greatest joys?
The best deals are where the seller was the founder and has put their heart and soul into the business, but has reached a natural point in life where it’s time to move on. At this point, the founder wants the company to continue to thrive, so finding a buyer who will take the company to the next level is a great combination.
Founders are usually passionate about their legacy, so they want the buyer to make a big impact out of it.
I’ve often acted for the founder, maybe a decade or more since the company was formed, so I have an emotional connection too. It’s great to see the company progress into the next chapter of its story and see the founder ride into the sunset.
Can you share any unusual sales in Gloucestershire that you have helped with?
One of my employees mentioned that her husband had considered buying a business but was apprehensive about quitting his job and taking the plunge. So we looked at the business again and I could see what a fantastic opportunity it was and convince him to move on. He had a lot of doubts along the way and what got him over the line was me saying if he wouldn’t buy it I would!
The fear of missing out on the opportunity was stronger than the opportunity itself at that point. Since then he has made the business a huge success and created a truly great lifestyle with a great work-life balance.
The most rewarding sale I’ve worked on was from someone who was broke by their bank. He went to court, won and started the business from scratch. He sold it a few years later for a very large sum. All of his loyal employees shared in the proceeds of the sale and all of his creditors were paid in full – even the bank!
Why do you think Gloucestershire is such a great place to start a business?
Gloucestershire is very diverse, with a strong mix of industry and countryside, young and old and plenty of innovation.
We are not dependent on a few large employers potentially relocating from Gloucestershire but are built on numerous small and medium sized businesses that require a wide range of people and skills.