Selling or integrating your business is often portrayed with negative connotations and perhaps we have Hollywood to thank for that with countless films depicting the corporate raiders swallowing up the smaller ‘good guys’, leaving their integrity in tatters and indeed fulfilling the ‘Wall Street’ prophecy that “Greed is Good”.
The reality is certainly to the contrary. Business integration provides an ideal strategy across many scenarios from growth through to succession planning, or it may come following the realisation that your idealistic post graduate vision of running your own business, hasn’t actually resulted in garage full of prestige cars and a holiday home on the French Rivieria but rather 16 hour days and an oil spill on the driveway from the 10 year old Hilux.
The idea that being an expert in a chosen field will enable you to run a successful, profitable business may be misguided and can prove to be both disheartening and financially challenging. An integration strategy, if managed well, can provide the ideal solution, allowing you to focus on your core skill & capability, while leveraging off the collective experience of those around you who are more commercially astute and can ultimately achieve your business objectives.
During my time working in the profession, one of the most endearing qualities I’ve found throughout the surveying community is the integrity and passion surveyors have for their craft. To lose that passion under the weight of the proverbial ‘mountain of paperwork’, would certainly be an injustice.
We have recently undertaken an acquisition and integration which has been an overriding success and most certainly a win win for all parties.
In November, 2017 LTS acquired Brunskill McClenahan and Associates who had been operating together for 30 years. Richard and Tony took a very wise and proactive approach to succession planning in order to ensure the value of their business was recognised and further to provide them the opportunity to continue working during the later stages of their career, without the added pressure of running the business.
Now some 8 months down the track, I caught up with Richard McClenahan to reflect on our journey so far:-
What prompted you initially to sell your business ?
We were seeking a succession/exit strategy and it was proving too difficult to obtain staff who were willing to take over the business from us. After trying for several years to put a succession plan in place we realised that the best option was to sell the business.
What was it about LTS that prompted your decision to join us ?
There were numerous reasons:-
- LTS was a firm with a similar culture to our firm and a similar commitment to quality.
- LTS, as a larger firm, offered opportunities for a wider variety of work and the ability to tender on larger projects.
- LTS also agreed to take all our staff.
- The LTS office was conveniently located for us, at Gordon.
- LTS provided us the ability to mentor younger staff members.
- The offer from LTS was attractive and included ongoing work for myself and Tony and the opportunity to scale back our work load in the future (working 3-4 days a week).
Now that we are 8 months down the track, are you happy with your decision to sell the business?
Yes, very happy.
How have you found the transition ?
What do you like particularly ?
Variety of staff, friendly office environment, reduced administration & HR workload
Is there anything you dislike ?
It is important to understand the impact that cultural fit has on the success of a venture such as this one. As pointed out by Richard, our businesses were very similar in approach. Commitment to quality and an overriding respect for all team members being key values demonstrated by both businesses.
Further, from the outset of the venture, LTS recognised the inherent value in the level of expertise and experience offered by Richard and Tony, having more than 30 years experience in the industry, not only technically but also in terms of the personal values they demonstrate to our up and coming millennials – hard work , commitment, quality, integrity, respect to name a few.
Undoubtedly this experience has been mutually beneficial and attests to the value of integration as a succession planning strategy. We would certainly explore the viability of similar ventures moving forward.
For the sake of transparency, we did ask Tony for his thoughts on the success of the venture, unfortunately he was unable to provide commentary at the time of going to press. Tony is pictured below floating somewhere in the Ionain Sea and clearly enjoying of the benefit of diminished business management responsibility!