OPINION:
Several people have asked me about how we came to sell our business so here is a potted history. Names have been left out to protect the guilty and placate the innocent.
In the beginning
The day you start your business is the day you start preparing it for sale. That is unless you have the Logan Roy gene that makes you cling on decades past your sell-by-date. I’m more the Roman Roy type who fancies doing it just for a bit because it seems like fun.
In April 2008, in the middle of the last financial crisis, I joined up with my business partner to launch our own advertising agency. It was more of a relaunch, to be honest, as he already ran a small agency with a couple of clients and had premises and a financial structure. Also a photocopier. (Very important, photocopiers.)
Society seems to recognise young people starting a business as being particularly brave but spare a thought for the middle-aged. Kids often have family to fall back on and decades in which to recover their finances should things go bad. Starting in the late summer of a career means that although you have a lot more experience, you’re not only giving up your peak earning years, but it makes a financial comeback way harder. Youngsters might have nothing to lose, but we had a lot.
Always look good
Right from the start, we had as a guiding principle that we should look to build a business that might look good to a potential buyer. Not because selling was a priority, we even banned each other from talking about it, but because it’s pretty sound business practice. We had no wish to gouge profits, we wanted steady growth from a sound foundation.
Start your own business, they said. It'll be fun, they said
The first thing I learnt was how little I actually knew about running a business. While I was absorbing this tricky fact I was flung into a whirlwind of chaos, stress and the occasional flirtation with financial collapse. After several years we finally found time to lift our heads up, discovered we were actually doing OK, and wondered what we should do now.
The business had taken its toll on me personally. All my time and energy was sucked into the agency vortex, and I was aware that I couldn’t keep it up forever. We had some great lieutenants at the agency and considered leaving it to them to handle allowing us to step back and become background partners, but that would have its own issues. What if they left to go hiking in the Himalayas? What if there was a global pandemic that decimated business? What if they embarrassed us by being better than we were?
Why sell at all?
The handy thing about working for someone else is that you can stop whenever you want, mortgage and family dependent. Having your own business puts you in charge of a spinning plate with staff and clients sitting on it, that you can’t just walk away from because you’re feeling a bit tired.
Business for sale. One careful owner
The main issue with selling anything is finding someone who wants to buy it.
We were an advertising agency, not a category that you see very often on Trade Me. In the past, there had been a number of international agency groups who had bought up local agencies to get themselves a foothold in New Zealand (DDB, Saatchis, BBDO etc). The issue for us was that anyone who wanted them already had offices over here. Options were very limited.
The end game
We had a couple of vague conversations going on in the background when we were contacted by a global advertising company who were very keen to expand their foothold in New Zealand.
We had no particular imperative to sell at that time but were aware that the economic winds are extremely fickle, and that the chance might not come again. We also knew that the sales process is often drawn out and the nature of an “earn-out” sale meant it could take several years. So it wasn’t so much about our desire to sell “now”, we had to ask ourselves if we would want to sell in a few years. We did. All those years of having a stable, disciplined business paid off and our suitors liked what they saw.
Owning the agency was an invigorating, stressful and rewarding ride, but to be honest, I was really happy when it was over and I could have a cup of tea and a lie-down.
Looking back at it now I think that running a business was for me a bit like writing in that I may not always enjoy writing, but I do enjoy having written.
I think Roman Roy would know what I mean.
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