Succeeding through succession
*Article originally from the Evening Post Business
Starting up a business is not the only route to owning your own
business. Acquiring an established business is another option and
potentially a better choice for some.
Chris Griffiths, Fund Manager and succession
expert at Finance Wales believes that the next generation of Welsh
business managers are increasingly taking advantage of
opportunities to buy into existing businesses. Finance Wales
has so far backed new management teams with over £29 million,
helping them acquire 91 businesses.
Griffiths believes that with the right backing
there are an increasing number of opportunities open to ambitious,
committed management teams. He also believes that there are
significant benefits for the Welsh economy as a whole.
“An estimated 1 in 5 business owners in Wales
have run their businesses for over 20 years and an increasing
number are considering their options with a view to realising the
value they’ve worked hard to build up. This is good news for
aspiring and ambitious Welsh entrepreneurs and management teams
because there are more acquisition opportunities.
“Passing the baton of business ownership to
the next generation of managers can be an attractive option and if
the process is properly managed, it can be a great way of ensuring
business continuity. The existing owner can take a step back and
benefit from years of hard work, while the new owner can inject new
impetus into the business, enabling it to go from strength to
strength and creating more value on their original investment.
“We’ve seen a significant rise in these types
of deals in the last year and Finance Wales can provide existing
managers thinking of a management buy-out, or those looking to buy
into a business, with a funding package tailored to their
Wales Environmental has grown significantly
following a management buy-out by Managing Director Dave Busby and
Business Development Director Llyr Williams in 2011.
Now one of the UK’s fastest-growing waste
management companies, it received funding from Finance Wales
earlier this year to purchase Cardiff Drain Cleaning
Company as part of
its continued expansion.
“Acquiring Cardiff Drains has allowed us to
expand the business faster than it would have taken us to grow
organically. The acquisition is a key part of our long-term
expansion strategy. It has significantly increased our capacity as
well as our client base and also provides us with an operating base
in Cardiff,” explained Dave Busby.
Griffiths is keen to dispel some of the common
misconceptions around successions: “Existing owners can mistakenly
believe their management teams either aren’t interested in buying
the business or can’t raise the necessary finance. Equally,
many managers who’d like to own their own business are often
unaware of the funding options open to them.
“We’re keen to clear up some of these
misconceptions and demonstrate how succession investment can help
them achieve their ambitions,” Griffiths concluded.