The owner manager set up the business ten years ago. It has grown steadily and profitably but he can see that changing conditions will make the future more uncertain. He would like to realise the value of the business, so freeing him to take on new challenges.
The business has got by without a Finance Director, but the owner recognises that maintaining profitability, and achieving the maximum from the sale of the business, will need the assistance of high quality financial expertise.
Paul Kelly worked with the company for over two years as part time Finance Director. His key actions were:
- creating reliable and useful management information and forecasting that allowed the management team to understand better the performance of the business and trends, and hence the outlook;
- arranging new borrowing facilities so the business could operate more efficiently;
- varied financial housekeeping that made the business more attractive and valuable to a buyer;
- close support of the negotiations for the sale of the business, to ensure the business was presented in the best possible light;
- leading the due diligence process, so that the rest of the management team could continue running the business.
The benefits to the business (and shareholders) were:
- clear understanding of where the business was heading financially, and so the motivations/ constraints on the sale of the business;
- a financially clean, presentable and easy-to-understand business that is more attractive to a buyer and commands a higher price;
- a variable resource (and cost) that is minimised when things are running smoothly, and increased to deal with peak work loads such as due diligence;
- freeing operational management as far as possible from the sale process, so they could run the business;
- a maximised sale price at a minimum extra cost.
The specific skills that Paul brought to this assignment were:
- experience of buying and selling businesses;
- taking an outsider’s view of the company’s prospects, and of what makes it appear attractive or risky to a potential buyer;
- presenting performance information in a way that all users can understand and act on it.