Why is external advice important in your view?
Is there a problem of owner managers resisting advice?
After a company has secured funding or made an acquisition, what challenges might it face as an enlarged organisation?
They (advisers) bring experience of leading similar transactions before. A good adviser will try to ensure that the deal agreed is the deal which completes. You don’t read in the press about the deals which do not complete at enormous cost to both sides. Most people who make an acquisition have never done one before – getting it wrong can be costly.
It is a common mistake for owner managers to think they don’t need advice when financing an acquisition because they’ve run their business very well so far. Why should they need other people to tell them what to do? Advisers can avoid emotion and can really help to achieve the right deal. Fees are sometimes viewed in isolation rather than in the context of avoiding a bad deal or losing a great deal.
After a company has secured funding or made an acquisition, what challenges might it face as an enlarged organisation?
There can be a major transition in going from a cash rich business to a highly geared business with the greater emphasis required in terms of cash management.
The interests of bankers and investors will become more important and their relationships have to be managed so they become as asset rather than a liability. Also there can be a philosophical change going from an owner manager to having shareholders to report to – and be responsible to. It means things changing on the ground, how you behave in the boardroom and how you plan for the future – no longer dealing on a whim because you’re the owner manager.