speaker-0: Welcome to Master Your Merger, the podcast for leaders navigating the people side of mergers and acquisitions. Each week, your host deal makers, HR leaders, and integration experts to uncover what really works when it comes to people, culture, and performance during a deal. From retaining top to retain leadership, you hear real stories and actionable insights from the people doing the work.
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speaker-0: Welcome to the Master Your Merger Podcast. Today's guest is Guy Bartlett. Guy is a seasoned entrepreneur, MA expert, military veteran, and founder of Fidelis Advisory, a fractional MA firm helping established business owners grow through acquisition, exit successfully, and navigate complex company transitions. With nearly 30 years in business and over two decades of transaction experience, Guy has bought. built, advised on, and guided businesses across multiple sectors. He previously founded Business Buyers Club, where his coached clients acquired an estimated hundred and forty five million pounds in transition revenue, and now leads Fidelist Advisory as a complete bolt-on MA capability for businesses ready to grow by acquisition. Guy's work is rooted in a people first approach to deal making, protecting the legacy of retiring owners, supporting buyers through smart acquisition strategy, and ensuring the business, team, Customers and culture are considered throughout the transition. Alongside his MA work, Guy served 42 years in the military, including commissioned service in the Royal Engineers, infantry leadership, UK operations, resilience, and liaison work with counterterrorism teams. Today we'll talk about how Guy's experience shapes his practical approach to leadership, communication, resilience, and decision making under pressure, and we'll explore ways we can apply military-style discipline to your MA. Guy, welcome to the podcast.
speaker-1: Thank you Clint. Amazing introduction. Appreciate that.
speaker-0: Well, thank you. You have an incredible background. And and you know, I I was sharing before the show started that that I'm an army brat. I've spent a lot of time around military and defense contractors. And so I I have a certain appreciation for the kind of discipline that takes. And I'm really curious how you got into MA and how that military background shapes how you approach the high pressure negotiations and decision making that comes during a deal.
speaker-1: no, good, good question. So I guess it goes back to childhood. My father fought at the end of the second world war in the far East. ⁓ my uncle, ⁓ took part in the rescue at Dunkirk and also, ⁓ battles in, North Africa. So, ⁓ always had a, an upbringing surrounded, I guess, by the sort of military stories. And I was born in 1965, so there was still a legacy of the cold war and all that kind of spy stuff. I was, a boy growing up, was fascinated by it really. And I think I kind of mentally prepared to join the military. So I joined at the age of 18 thinking I wasn't going to go to university and really loved being a boy soldier effectively. And then to my surprise, I got enough qualifications from high school, as you would call it, to qualify for university or college. So I then had a conundrum and the army said, look, you can go to university and we'll sponsor you or you can stay as a private soldier. So I thought I'd take the first option and I had a gap in time. So they moved me to what was then called the territorial army. It's now the British army reserve. So that's why I joined the Royal engineers. And I had a bit of time to fill. So I got myself a job just to earn some money, love the job, love being in the reserves and spent most of my 42 years in the army reserve. But went to the Royal Military Academy, Sandhurst was commissioned. You received the same commission as a regular officer, but you're just part time. So same regulations, same responsibility, same command structure, all of that learning curve really. And went through all the different command postings. I had two tours as a company commander, then joined the staff. So I had an amazing experience really in the military. that gave me leadership experience, planning, emergency response tools, obviously the sort of military leadership and management was a massive part of that experience as well. And then I was fortunate enough to go to staff college. So you've sort of taught all the higher level planning, is all of those are very strong transferable skills really into civilian life. And it transpired that by the mid nineties, I was headhunted to join a guy who'd built up or been the managing director of a marketing services group. He left there. So to me once, one day my son, all this would be yours. So I was kind of, okay, let's give it a go. And in fact, that was my first taste of ⁓ &A because it was a very small consultancy and we needed to grow quickly. And I found a business that was acquiring other agencies. And I thought that might be a way to inject some working capital into the business, which led to a partial share sale. So that was my first taste really. And that was sort of 1997, 98, something like that. And I found the experience really interesting. I'd written business plans and, you know, raise money for companies, but I'd never been involved in a share sale before. So that was really, really interesting. And that kind of whet my appetite. And then the business took off. We turned over 6 million in six years from a standing start, ended up with lots of blue chip clients and specialized in direct marketing for retail, which is a really, really interesting subject. But the promise of one day my son or Lisa be yours didn't quite transpire. We ended up with a fairly painful shareholder dispute. I decided to go on my own and very quickly people were coming to me saying, can you take this project or that project? And, the worm was in my head of doing acquisitions really. And I'd studied how we might be able to buy our supply chain, which obviously didn't transpire, but still that was the idea really. And so 2005, I started looking in earnest and then 2006 did my first two transactions. So that's really the evolution, how I went from a very different military career to a hybrid kind of military career of, you know, part-time service and then full-time civilian life really.
speaker-0: Well it's a it's a heck of a story and I can see how I mean the military's a great ground for leadership, for project management, especially in the ⁓ in the engineering ⁓ core. So ⁓ it makes a ton of sense. Yeah. So ⁓ guy, you obviously in the in the years since you've seen a lot of deals and you know, so starting with with the headlines, we always see, you know, seventy to ninety percent of deals fail, or th those numbers have come down recently, which is great, but but we know a large percentage don't work out. So When you take a look at at why that happens, what do you see most often?
speaker-1: There are a number of factors at play. think the, the, biggest one is, and we all are often guilty of it. We don't start with the end in mind when we start businesses, particularly founders, entrepreneurs, ⁓ less so perhaps when it's second generation or third generation, but any business that was set up 20, 30, some cases 40 years ago. ⁓ and I do deal with, with business owners of that age. ⁓ they. almost never think about the exit from the business. And there is a lack of what I would call financial planning, personal financial planning. So when it comes to selling the business, they tend to fall into the grip of either a business broker or an accountancy firm or corporate finance who are by nature generally transactional and often incentivized to try and get the best possible price without really thinking about what's best for the seller in the context. what I try to do these days is encourage, and it amazes me how few people have any kind of interaction with a wealth manager or financial planner to say how much is enough. In the UK, there's a great book written called Enough, which was centered on this whole idea of we get locked into this mental expectation of I'll work to a certain age and then I'll retire. Well, the glide path for that should have started a long time ago. So people come to that realization and often it's a family pressure. So a male founder, his wife will say, you know, you promised me we'd travel around the world and spend time together. When's that going to happen? And so often the planning doesn't happen at the right time. And so they come to market. And then human nature being what it is, people worry about, I leaving money on the table? Am I getting the best deal I could get? All those sort of factors come into play and still they don't have context. heard a really, really good YouTube video probably now about 12 months ago, but it absolutely encapsulated what I see all the time. it was, it's an IFA who runs the channel and he described being contacted by a business owner said, I want to my company. I need to get some wealth management advice. And they were like, yeah, great. Arranged to meet up. And the first thing that the guy said is, I think my business is worth 10 million. So the IFA said for once said, well, where'd you get that number from? And his response was really telling Clint, said, well, my parcel for eight and I think mine's worth two more. And that was it. So they carried on the conversation and then that transformed from, you don't need 10, you need five, and we can do it in half the time that you thought. Now, then that's a very different context. It's a very different conversation. It's a very different negotiation. When you know how much is enough and it's a realistic figure, and then you can start to couple that to your business. And I talk about businesses being a sausage machine. The more sausage machine like the business is, the better the chance of getting the deal that you want and you need.
speaker-0: Yeah, a absolutely. You know, one of the things I I've worked on the buy side of a a ⁓ number of founder led sales and it it is amazing to me how often ⁓ the advisory layer is missing. You know, they ⁓ they trust the buyer and and from the buyer side, we we certainly don't want to mess anybody over. That's not our goal at all. We want this to work out for everybody, but we have our interests in mind and ⁓ you know what you do with the cash afterwards. We're not particularly concerned about. You know, we we may want you to stay on board and help with the transition, or that may not be your plan. So we want to figure out how to do that. But what you do with the money on your end is really between you and and your family. And I I have been surprised to have some of the sidebar conversations where folks are they need to work for another year or two to get the the money they need. They need that retention bonus and They may not want to work. They may want to go travel. So I I really love what you're pointing to, which is, you know, understand what the exit strategy is so that you can go live your dream when you're done selling the business.
speaker-1: Yeah, I think that's right. And the other component to all of this is, that ⁓ &A for a long time has been quite what I would call confrontational between the advisory teams, especially the lawyers, it's all part of their training really. what I try to do is to find a way to collaborate because if you're faced with a situation where let's say that the owner is ill and they need to sell, then It's even worse because they may not have done the preparation. They're faced with life changing challenges and there's a lot of value locked up in the business. Now you have to get creative sometimes in transactions that, know, notion of a hundred percent on the day is for the birds. You know, there are all sorts of protections in there for a buyer. So sometimes sellers don't even know that, you know, it comes as a shock to them that that's, that there's such a thing as a deal structure. So what I try to do is to first of all, get people comfortable with what is enough. And if there's a gap, as you suggest can happen, then it becomes a conversation. It's okay. How do we close that gap? Do we delay the transaction or do we do the transaction now, but we build in certain hurdles that if the business achieves those numbers, then you can get that higher exit figure and so on. And that's what collaboration is about. It's understanding the human component. in all of these transactions between the buyer and the seller. you know, is the buyer the right buyer? You know, are they the right people to take on that business? Because it's not about the dollars in the bank. It's, it's, it's actually about the people in the business. You know, one founder is leaving, someone else is coming in and there's a bunch of people in the middle, all going, am I keeping my job? What's happening to the company? You know, all of those human emotions, ⁓ you know, are in that soup really. So. For me, it has to be about the human components and the collaboration required to get the right deal. And if you do that, I truly believe that the numbers follow.
speaker-0: Yeah. Well let me ask ⁓ just just pushing on this this point of collaboration, which I think is is really important, I'm sure you've seen more than your fair share of situations where the deal goes pencils down once or twice, ⁓ where, you know, it's a good deal, but the collaboration just isn't working out. What causes a good deal to start falling apart and and how do you and your role help keep it moving with all of those players?
speaker-1: There's lots of factors at play. People can, on the buy side, can sometimes make the mistake of how they assemble the information and how they present it. So if there's a funder involved, for example, then the funder can be subject to external factors that you don't even know about. So for example, a funder may well have a whole series of sectors that they would lend into. And their book might say that they might have an internal control that says no more than five companies in sector X. And you don't know whether your deal is the sixth deal that the credit committee have looked at. So it might be, there's nothing wrong with your deal, but they're just maxed out on that particular sector, but they're never going to tell you that. So they'll come up with some reason why, well, your figures don't work out and you can be left scratching your head thinking, why? know what's wrong with my numbers. So that's one factor. having an experienced financial team who know how to structure the numbers properly and present them properly and avoid that kind of degree of naivety that can creep in sometimes helps a lot. Being realistic around what is achievable, what levels of multiple of EBITDA, for example, a lender is willing to do. And then having an open conversation with the seller around what is achievable and what isn't achievable and where does that get us? You know, these are all factors where the deal can start falling over. If people, you know, especially advisors start telling their clients, look, you know, they're just trying to trip, chip the price and, you know, bring the price down. I, I always make a point that that's not our business. We're not here to offer one price and then try and negotiate it down. It has to be. open and transparent. And if there's a problem, then have that conversation to go, well, here's what we thought we could do. The market is saying something else. What can we do to solve the problem? is, a much better question than just sort of, I should say, pencils down and saying, ⁓ well, that's it. ⁓ because that doesn't achieve anything. ⁓ it might achieve some abort fees, but nobody really wants to abort fees. Everyone wants the deal to complete. So It's understanding where human nature can intervene. It's for me, 80 % of transactions or more are emotional and only 10, 20 % are technical and financial. understanding that and understanding where the pressure points come, you momentum is important, keeping the thing moving forwards. People get deal fatigue, they get stressed out, they start thinking that... There's an ulterior motive and all these kind of human emotions start clouding the issue. And once that starts to happen, that's when, you know, the rails diverge and the thing starts to head for the buffers really.
speaker-0: So let's let's talk about this emotional piece for for just a moment. I I know that founder legacy is a really important factor that gets emotional. ⁓ I would love to hear a story about where really understanding what the founder needed their legacy to look like made ⁓ made a deal work out.
speaker-1: ⁓ pretty much 95 % of transactions start with legacy. I've seen deals, and I'm not being horrible, but I've seen deals of business that I bought where the founders were all over legacy. It was a massive part of their consideration. And about six months after the transaction, all they cared about was the money. They had checked out, know, all the people, the team didn't mean anything to them. So, and that... I'm not, again, I'm not being harsh. It's just human nature. It's just the thing, because I think once you, once you leave a business, and it's only one of them died, ⁓ as well, which was grim. So then we were left dealing with the widow of one of the directors who passed away. ⁓ and the reality is we're all human beings when, when we're no longer close to something and involved in it, why would we have the same passion? Why would we still have the same? interest really. So what I try to do is to say what aspects of the legacy matter to you? Is it the name over the door? Is it the customer base being maintained? Is it your reputation? Do you feel that if you've sold and the business changes dramatically, people will think badly of you? What are those human components that matter to you in your version of legacy? Because again, we can use the word, but it might mean different things to different people. So we try and tease out the other thing that we use, excuse my language, but I call it the shit list. ⁓ and we say, they look at me and they go, what do you mean? And so, well, everyone wakes up at three o'clock in the morning with a sudden panic of, this could go wrong and that could go wrong. So what do you think might go to shit? And then I've got my list as a buyer, let's compare the lists and let's start striking out the things. are the factors of mitigation? that both of us can then sleep easy when we wake up at three o'clock in the morning thinking, ⁓ my God, what am I doing? We've gone through that process and we struck out the things and we've agreed between us. And here's the crucial thing. Then we tell the lawyers, this is what we want. What often happens is people abdicate through fear, through naivety, through lack of experience. They abdicate responsibility to their advisors. And I've had it loads of times where people will say, ⁓ well, that's what my lawyer's here for. That's what I'm paying him for. You go, this is your transaction. Their job is to produce the paperwork. If you abdicate responsibility to your advisors, more often than not, it will fall over.
speaker-0: Yeah, I see that a lot. And then if your advisors don't agree with one another or have different perspectives, that that can get even messier.
speaker-1: Yeah, for sure. And I'm sure you've seen it, Clint. The lawyers have their little competition about whose clause is better worded than the next guy's clause and all of that. And I went to a better law school than you and so on and so forth. And sometimes, less so with accountants, but sometimes financial due diligence will throw out oddities that people will then debate. And again, you have to kind of step back and try to have the helicopter view. Is it a material matter? Is it something that really fundamentally is going to cause a problem? If so, okay. What's our mitigation factor? People start talking about deal breakers. It all starts getting a bit emotional. So, you know, it's more a case of, okay, we found a problem. How do we mitigate it? That's my favorite word is what's the mitigation. I've sometimes said to lawyers, okay, so you've identified a problem. What would have to happen for that not to be a problem? And they hate that. Cause then they go, well, that's not my job. go, okay, but it's not your job to raise a problem and not come up with a solution. You're, you know, you're giving us a problem. have to participate in the resolution of that problem because your colleagues down the hall that do something called litigation will be rubbing their hands in glee when you've washed your hands of a clause that could be a problem down the road. So this is the sort of. approach that I try to take with legal teams as well. Ask that question, what would have to happen? What would that have to look like for that to be okay? And that changes the tone and the conversation.
speaker-0: Yeah. You know, I'm curious, guy. One of the things on the buy side that that we see more than occasionally is a high degree of founder dependence. So earlier on you talked about the more that your business looks like a a sausage machine, the the better off you are selling it. But ⁓ I've seen businesses where everything has to run through the founder and and then as a buyer, we're sitting here going, Okay, can we retain this person? We're about to make them a millionaire, right? And then we try to figure out how to do retention. Is it a holdback? Are we going to do some sort of earnout? Like what's the mechanism for us to hang on to this individual because the business is so dependent upon them versus one that is ⁓ you know, plug and chug. Yep. Had do you have a story, a situation where you've seen that founder being really dependent and and how did you overcome that with this with the buyer?
speaker-1: Yeah, I've seen, I've seen those situations, a couple of examples that didn't really kind of end the way I would have wanted. acquired a business that was founder dependent. We did a lot of engineering to fix the business, make it better, et cetera. And he got ⁓ a good lump of cash, is, which is what he wanted. But the deal was that he would stay to really kind of provide the sales part of the business. He knew the customers. He, the logic of doing the deal was actually to take away all the operational stress, admin, et cetera, finance, which was, which was a big driver for the sale. the, but the reality was that the amount of money that he received meant that he spent more time on the golf course, ⁓ than, actually really paying attention. And we started to see the key numbers dropping off and that resulted in selling a business back to him because we couldn't really get away from that owner dependency. ⁓ so that was, that was interesting. We made some money, but it didn't really end where we wanted it. Similarly, I made a massive mistake when I bought the business, my due diligence was poor. We bought it on the premise that we knew that there was a heavy concentration. 80 % was a government contract. ⁓ and all the indications were the government contract would be fine. ⁓ the seller got big lump of cash to finish his house in Cyprus. And then the contract was terminated. Government policy changed. We got wind of the fact that he probably knew that was coming. And so the conversation turned to, well, what do we do now? And he was very much kind of, well, not really my problem. So we just said, fine, we'll, you know, we'll close the company. And it was a small business and, he, said, well, what about the guys? I said, promise me, I promise you they will get jobs in it in an instant. They were in high demand for the skills that they had, which was exactly what happened. So again, not the outcome that we'd set about really. that's a lot of it is in the early days for me, was mistakes in due diligence. was mistakes in going back to my point. And one of the things that I stress early on in conversations with sellers is so the day after completion, what's changed, what happens in your life? You know, what do you see? And in NLP, they call it future pace, where you project your vision of where you think you're going to be. I really work hard at getting the seller to future pace what they think they're going to do. And then almost kind of war game that to go, okay, let's test that. Because if there's a role for them in the business, they need to feel like they're making the right contribution. For us as a buyer, we need to make sure that it's financially it makes sense, but you also have the challenge of the shift of culture. So if the previous owner is sticking around, even if they've sold and they're a consultant, you've got the challenge of the staff. Do I look at him for instruction or do I look at her for instruction? Where does my focus go and who do I listen to? So the role that someone has post-sale is critical to really work that through, not just hope for the best. I did a deal where we didn't really pin down the role of the seller, but he was genuinely helpful. And we had to realize that we needed to sort that out some weeks, months into the transaction to get that cleaner. And that was okay. That worked out. But that was after the lessons, if you like, of what had gone before. And in the UK, there are tax issues associated with selling. So we have a form of tax relief for sellers, which needs them to step away from the business whilst they can still be a consultant. So that can work quite well, but these days we've put lot of effort into drilling down into what exactly are you going to do? What are your expectations? What do we need? What's best for the business? And I'd talk about The triangle, always say these days, the top of the triangle is the company. The company is an entity. And for the buyer and the seller to succeed in what they're stepping into, that top of the triangle needs to be looked after. And everyone has to have the mindset that if we protect that, this bit will be fine. Because no one ever wrote a spreadsheet, it didn't look good. But the gap between a spreadsheet forecast and reality is often quite considerable. What happens when that lovely looking spreadsheet doesn't turn out to be the figure at the bottom that we all hope for? What's plan B? And if you've mitigated those elements, got clear about what everyone's expected to do and focused on protecting the business, then really the rest will work. know, someone might have expected 24 months deferred consideration, but if that stretches to 36 and they get paid, they're really you know, is that a material change? having those conversations early on for me is really important.
speaker-0: That makes a ton of sense. You know, speaking of the spreadsheet, there there's a a quote I have from you that says, ⁓ don't read the accounts like an accountant, read them like the story of a business. ⁓ so while we're on the topic of of spreadsheets, I I'd love to understand how you go about doing that and what are some of the hidden values that could come out of that, the upside or some of the warning signs that ⁓ folks should be looking out for.
speaker-1: Yeah. So some things to think about. Most business owners focus on the P &L. What are our sales? What are our profits? And underpinning that is how much money can I take out of this business whilst I'm running it? In dividends or whatever the remuneration strategy might be. And normally that's pinned to what their tax bill is going to be. In the States, it's the IRS, lovely people. In the UK, it's HMRC. So everyone in business resents paying large amounts of tax because most of us feel that governments and agencies waste it. And we know how hard we've worked to make it in the first place. And I think that that's a natural feeling that most people would have.
speaker-0: It doesn't seem to matter what side of the political spectrum you're on, nobody loves paying taxes.
speaker-1: Yeah. And the thing is, if you're in business, you do work hard. You do carry the stress. You have a lot of responsibility and it's not easy. You know, especially in the current global climate. So I think people in business, especially feel that more so than perhaps employees. Employees don't really have a choice. You know, they've got to fix the amount of tax that they've got to pay whether they like it or not. And if they need to go and get a bigger job, then they'll pay more tax. You know, you just can't get away from it. So. But that's why I say that most people focus on the P and L. Very few business owners that I've worked with understand or pay attention to a balance sheet because the usual repost is on my account and takes care of that. What I try to do is to help people to understand that the balance sheet is the alternative to a sale. In other words, if you can't sell your business, then you're going to get something that looks like the balance sheet. If you don't understand what the balance sheet is, on what makes up the balance sheet, then you could be really badly disappointed. So for example, well-run businesses often carry quite a lot of cash. And the reason is simple because it's easier to store the money in the bank in the business than pay income tax on it. But obviously when you come to sell the business, then you'll pay a lower rate of tax, capital gains tax in the UK, which is advantageous. So I call it storing acorns. You know, they kind of store the acorns. ⁓ with no particular plan as to what to do with the cash other than maybe when, when we exit. But then you look at the other current assets. So you look at things like stock, look at fixed assets, depends what, type of business it is. If it's, if it's plants and machinery, then great. There's some real value in there, but if it's a service company, there's not really going to be much there. The assets go home every night. So, ⁓ you've got to educate people to understand. Balance sheet's like an inverted pyramid in a way. The value should sit at the top. And then hopefully if you've got the balance right, it should be a bit skinny at the bottom. And then your shareholders funds mean something. So I look at a balance sheet from what's real and what, what if, if you had to close it, what could you turn into cash in the bank? And that's where the trick lies. That's where you see the story of the business. So If a business is making profits each year, but that cash is going out to the sellers, that's okay, but it is what it is. But if the business is making profits and that's being reinvested in equipment, in people, cetera, then a lot of that story you see in the balance sheet. That's what I mean by the story of the business. Then when you look at the P &L, you see in the detailed P &L, you'll see what they're spending money on. and how that relates back to the balance sheet. And then you get a picture of the psychology of the seller and how they run their business reflected in the figures. And that's what generally I mean by reading the story of the business in the numbers.
speaker-0: Yeah, got it. Well, ⁓ guy, as we ⁓ get close to to wrapping our time together, I would love to get your thoughts on what happens after close. We've talked a lot about the mechanics of getting to the deal, ⁓ a lot about running the business after. I I wanna focus on that time the first thirty to sixty days. And I'm curious what you've seen during that time that that you know the business is either going to sink or swim based on how that goes. Just some of your insights or or maybe a situation where you've seen those ⁓ first couple of months be really determinative.
speaker-1: Yeah. So definitely starts before the close. One of the key essential documents, if the business doesn't already have it and it's scary how many don't, would be a really robust cashflow forecast. Cash is king. P &L is great, but we all know that cash is the main driver for a business. So not much point making on paper, lots of profit if you're not collecting the cash in. So something just to hark back briefly to the accounts as well as to look at the cash generative. performance of the business and understand that. And even ask questions around when was the last time you put your prices up? Because a small notch in gross margin can have a dramatic impact on cash at bank. So things like that that we would look at. So is there a scope exactly that? When did you last put your prices up? Would customers really notice two or 3 %? And all of that would feed into a really strong cashflow forecast. The other thing that we would look at is continuity is massive. what risks to continuity are we looking at? If the sellers want to leave on day one, is the business genuinely enough of a sausage machine that no one's going to notice? And you do see them, you do see businesses that are properly set up like that. So the business operates without the owner, but they're not common in truth. So that's a massive factor. And then as we touched on before, Do we then have a programmed handover period that makes sense for them, for the business, for the customers? Another story I could share with you, I bought a business in a 30 day turnaround. They paid off the bank debt. We set up the funding. They had some business that they could land but didn't really want to. So we got all of that going. And within the next 30 days, all the suppliers said, ⁓ it's great that you're on board and we're delighted to see you here, but we're going to change all your terms. And now you've got to pay us in 30 days, not 60. So I carefully planned cashflow out of window within the first month. understanding continuity, understanding that transition is critical. That you don't have nightmares and challenges almost immediately that you're stepping into the business. And obviously the last bit of that is people. Spend time. You have to, you can't buy a business. don't think anyway, and be an absolute landlord. You have to be there and you have to stamp your style, your personality on those people. Listen to them. One of the simplest things that we, that we did was, we bought a business where we said to the team, what would make your day to day life easier? And to a man, they all said, can I have a second screen for my computer and can we upgrade the computer? And that's. an immaterial cost to the business. But the boost to morale was massive. So think of the human component always. Most people, when you step into a business, their biggest fear is that you're going to get rid of them. You as the buyer, that's your biggest fear, that they'll leave. ⁓ just do the thing that prevents that from happening, really. That's really, really important.
speaker-0: Yeah, and it's amazing what happens when you just ask people what they need.
speaker-1: Yeah. Yep. And it's often the simplest of things. They don't expect you to spend a fortune, but small things that make such a difference boost morale.
speaker-0: Well, guys, thank you so much ⁓ for the time together. This has been a great conversation. ⁓ where can listeners find out more about you and learn more about your work at Fidelis?
speaker-1: So I have a YouTube channel. So I'd be really happy for people to go and search me out on YouTube. It's easily accessible and see my mug on there. that'll be good. And then we have a website, which is fidelis-advisory.co.uk. You'll see me on there when we talk about our approach to transactions. So I'd love to see people search me out on there really. Just drop me a note. and always open to conversations. People want to find out more ⁓ and learn more about what we do, whether that's on the advisory side, doesn't particularly matter. We tend to focus on the buy side, but we've also helped lots of people to sell because we just kind of reverse engineer our whole philosophy. One of my favorite deals was we had a big tax change last year. ⁓ And I was introduced to a lady who ran a hairdressing salon. So not a normal deal. ⁓ but her accountant has said, you're not going to be able to sell this. And we debunked that we got the deal done inside a month before the tax change. And we structured it so that she sold it to her general manager. And they sent me a picture of them in a bar embracing, cause they were so happy that they'd done the deal. So I love that as well. so that's, that's a big driver for me.
speaker-0: Well, it's a great success story. So, guy, we'll make sure we ⁓ link to the YouTube channel and your website in the show notes. Thank you again. ⁓ really appreciate the conversation.
speaker-1: My pleasure. It's been really nice to spend time with you, Clint. Thank you. Thanks for listening.
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speaker-0: Welcome to the Master Your Merger Podcast. Today's guest is Guy Bartlett. Guy is a seasoned entrepreneur, MA expert, military veteran, and founder of Fidelis Advisory, a fractional MA firm helping established business owners grow through acquisition, exit successfully, and navigate complex company transitions. With nearly 30 years in business and over two decades of transaction experience, Guy has bought. built, advised on, and guided businesses across multiple sectors. He previously founded Business Buyers Club, where his coached clients acquired an estimated hundred and forty five million pounds in transition revenue, and now leads Fidelist Advisory as a complete bolt-on MA capability for businesses ready to grow by acquisition. Guy's work is rooted in a people first approach to deal making, protecting the legacy of retiring owners, supporting buyers through smart acquisition strategy, and ensuring the business, team, Customers and culture are considered throughout the transition. Alongside his MA work, Guy served 42 years in the military, including commissioned service in the Royal Engineers, infantry leadership, UK operations, resilience, and liaison work with counterterrorism teams. Today we'll talk about how Guy's experience shapes his practical approach to leadership, communication, resilience, and decision making under pressure, and we'll explore ways we can apply military-style discipline to your MA. Guy, welcome to the podcast.
speaker-1: Thank you Clint. Amazing introduction. Appreciate that.
speaker-0: Well, thank you. You have an incredible background. And and you know, I I was sharing before the show started that that I'm an army brat. I've spent a lot of time around military and defense contractors. And so I I have a certain appreciation for the kind of discipline that takes. And I'm really curious how you got into MA and how that military background shapes how you approach the high pressure negotiations and decision making that comes during a deal.
speaker-1: no, good, good question. So I guess it goes back to childhood. My father fought at the end of the second world war in the far East. ⁓ my uncle, ⁓ took part in the rescue at Dunkirk and also, ⁓ battles in, North Africa. So, ⁓ always had a, an upbringing surrounded, I guess, by the sort of military stories. And I was born in 1965, so there was still a legacy of the cold war and all that kind of spy stuff. I was, a boy growing up, was fascinated by it really. And I think I kind of mentally prepared to join the military. So I joined at the age of 18 thinking I wasn't going to go to university and really loved being a boy soldier effectively. And then to my surprise, I got enough qualifications from high school, as you would call it, to qualify for university or college. So I then had a conundrum and the army said, look, you can go to university and we'll sponsor you or you can stay as a private soldier. So I thought I'd take the first option and I had a gap in time. So they moved me to what was then called the territorial army. It's now the British army reserve. So that's why I joined the Royal engineers. And I had a bit of time to fill. So I got myself a job just to earn some money, love the job, love being in the reserves and spent most of my 42 years in the army reserve. But went to the Royal Military Academy, Sandhurst was commissioned. You received the same commission as a regular officer, but you're just part time. So same regulations, same responsibility, same command structure, all of that learning curve really. And went through all the different command postings. I had two tours as a company commander, then joined the staff. So I had an amazing experience really in the military. that gave me leadership experience, planning, emergency response tools, obviously the sort of military leadership and management was a massive part of that experience as well. And then I was fortunate enough to go to staff college. So you've sort of taught all the higher level planning, is all of those are very strong transferable skills really into civilian life. And it transpired that by the mid nineties, I was headhunted to join a guy who'd built up or been the managing director of a marketing services group. He left there. So to me once, one day my son, all this would be yours. So I was kind of, okay, let's give it a go. And in fact, that was my first taste of ⁓ &A because it was a very small consultancy and we needed to grow quickly. And I found a business that was acquiring other agencies. And I thought that might be a way to inject some working capital into the business, which led to a partial share sale. So that was my first taste really. And that was sort of 1997, 98, something like that. And I found the experience really interesting. I'd written business plans and, you know, raise money for companies, but I'd never been involved in a share sale before. So that was really, really interesting. And that kind of whet my appetite. And then the business took off. We turned over 6 million in six years from a standing start, ended up with lots of blue chip clients and specialized in direct marketing for retail, which is a really, really interesting subject. But the promise of one day my son or Lisa be yours didn't quite transpire. We ended up with a fairly painful shareholder dispute. I decided to go on my own and very quickly people were coming to me saying, can you take this project or that project? And, the worm was in my head of doing acquisitions really. And I'd studied how we might be able to buy our supply chain, which obviously didn't transpire, but still that was the idea really. And so 2005, I started looking in earnest and then 2006 did my first two transactions. So that's really the evolution, how I went from a very different military career to a hybrid kind of military career of, you know, part-time service and then full-time civilian life really.
speaker-0: Well it's a it's a heck of a story and I can see how I mean the military's a great ground for leadership, for project management, especially in the ⁓ in the engineering ⁓ core. So ⁓ it makes a ton of sense. Yeah. So ⁓ guy, you obviously in the in the years since you've seen a lot of deals and you know, so starting with with the headlines, we always see, you know, seventy to ninety percent of deals fail, or th those numbers have come down recently, which is great, but but we know a large percentage don't work out. So When you take a look at at why that happens, what do you see most often?
speaker-1: There are a number of factors at play. think the, the, biggest one is, and we all are often guilty of it. We don't start with the end in mind when we start businesses, particularly founders, entrepreneurs, ⁓ less so perhaps when it's second generation or third generation, but any business that was set up 20, 30, some cases 40 years ago. ⁓ and I do deal with, with business owners of that age. ⁓ they. almost never think about the exit from the business. And there is a lack of what I would call financial planning, personal financial planning. So when it comes to selling the business, they tend to fall into the grip of either a business broker or an accountancy firm or corporate finance who are by nature generally transactional and often incentivized to try and get the best possible price without really thinking about what's best for the seller in the context. what I try to do these days is encourage, and it amazes me how few people have any kind of interaction with a wealth manager or financial planner to say how much is enough. In the UK, there's a great book written called Enough, which was centered on this whole idea of we get locked into this mental expectation of I'll work to a certain age and then I'll retire. Well, the glide path for that should have started a long time ago. So people come to that realization and often it's a family pressure. So a male founder, his wife will say, you know, you promised me we'd travel around the world and spend time together. When's that going to happen? And so often the planning doesn't happen at the right time. And so they come to market. And then human nature being what it is, people worry about, I leaving money on the table? Am I getting the best deal I could get? All those sort of factors come into play and still they don't have context. heard a really, really good YouTube video probably now about 12 months ago, but it absolutely encapsulated what I see all the time. it was, it's an IFA who runs the channel and he described being contacted by a business owner said, I want to my company. I need to get some wealth management advice. And they were like, yeah, great. Arranged to meet up. And the first thing that the guy said is, I think my business is worth 10 million. So the IFA said for once said, well, where'd you get that number from? And his response was really telling Clint, said, well, my parcel for eight and I think mine's worth two more. And that was it. So they carried on the conversation and then that transformed from, you don't need 10, you need five, and we can do it in half the time that you thought. Now, then that's a very different context. It's a very different conversation. It's a very different negotiation. When you know how much is enough and it's a realistic figure, and then you can start to couple that to your business. And I talk about businesses being a sausage machine. The more sausage machine like the business is, the better the chance of getting the deal that you want and you need.
speaker-0: Yeah, a absolutely. You know, one of the things I I've worked on the buy side of a a ⁓ number of founder led sales and it it is amazing to me how often ⁓ the advisory layer is missing. You know, they ⁓ they trust the buyer and and from the buyer side, we we certainly don't want to mess anybody over. That's not our goal at all. We want this to work out for everybody, but we have our interests in mind and ⁓ you know what you do with the cash afterwards. We're not particularly concerned about. You know, we we may want you to stay on board and help with the transition, or that may not be your plan. So we want to figure out how to do that. But what you do with the money on your end is really between you and and your family. And I I have been surprised to have some of the sidebar conversations where folks are they need to work for another year or two to get the the money they need. They need that retention bonus and They may not want to work. They may want to go travel. So I I really love what you're pointing to, which is, you know, understand what the exit strategy is so that you can go live your dream when you're done selling the business.
speaker-1: Yeah, I think that's right. And the other component to all of this is, that ⁓ &A for a long time has been quite what I would call confrontational between the advisory teams, especially the lawyers, it's all part of their training really. what I try to do is to find a way to collaborate because if you're faced with a situation where let's say that the owner is ill and they need to sell, then It's even worse because they may not have done the preparation. They're faced with life changing challenges and there's a lot of value locked up in the business. Now you have to get creative sometimes in transactions that, know, notion of a hundred percent on the day is for the birds. You know, there are all sorts of protections in there for a buyer. So sometimes sellers don't even know that, you know, it comes as a shock to them that that's, that there's such a thing as a deal structure. So what I try to do is to first of all, get people comfortable with what is enough. And if there's a gap, as you suggest can happen, then it becomes a conversation. It's okay. How do we close that gap? Do we delay the transaction or do we do the transaction now, but we build in certain hurdles that if the business achieves those numbers, then you can get that higher exit figure and so on. And that's what collaboration is about. It's understanding the human component. in all of these transactions between the buyer and the seller. you know, is the buyer the right buyer? You know, are they the right people to take on that business? Because it's not about the dollars in the bank. It's, it's, it's actually about the people in the business. You know, one founder is leaving, someone else is coming in and there's a bunch of people in the middle, all going, am I keeping my job? What's happening to the company? You know, all of those human emotions, ⁓ you know, are in that soup really. So. For me, it has to be about the human components and the collaboration required to get the right deal. And if you do that, I truly believe that the numbers follow.
speaker-0: Yeah. Well let me ask ⁓ just just pushing on this this point of collaboration, which I think is is really important, I'm sure you've seen more than your fair share of situations where the deal goes pencils down once or twice, ⁓ where, you know, it's a good deal, but the collaboration just isn't working out. What causes a good deal to start falling apart and and how do you and your role help keep it moving with all of those players?
speaker-1: There's lots of factors at play. People can, on the buy side, can sometimes make the mistake of how they assemble the information and how they present it. So if there's a funder involved, for example, then the funder can be subject to external factors that you don't even know about. So for example, a funder may well have a whole series of sectors that they would lend into. And their book might say that they might have an internal control that says no more than five companies in sector X. And you don't know whether your deal is the sixth deal that the credit committee have looked at. So it might be, there's nothing wrong with your deal, but they're just maxed out on that particular sector, but they're never going to tell you that. So they'll come up with some reason why, well, your figures don't work out and you can be left scratching your head thinking, why? know what's wrong with my numbers. So that's one factor. having an experienced financial team who know how to structure the numbers properly and present them properly and avoid that kind of degree of naivety that can creep in sometimes helps a lot. Being realistic around what is achievable, what levels of multiple of EBITDA, for example, a lender is willing to do. And then having an open conversation with the seller around what is achievable and what isn't achievable and where does that get us? You know, these are all factors where the deal can start falling over. If people, you know, especially advisors start telling their clients, look, you know, they're just trying to trip, chip the price and, you know, bring the price down. I, I always make a point that that's not our business. We're not here to offer one price and then try and negotiate it down. It has to be. open and transparent. And if there's a problem, then have that conversation to go, well, here's what we thought we could do. The market is saying something else. What can we do to solve the problem? is, a much better question than just sort of, I should say, pencils down and saying, ⁓ well, that's it. ⁓ because that doesn't achieve anything. ⁓ it might achieve some abort fees, but nobody really wants to abort fees. Everyone wants the deal to complete. So It's understanding where human nature can intervene. It's for me, 80 % of transactions or more are emotional and only 10, 20 % are technical and financial. understanding that and understanding where the pressure points come, you momentum is important, keeping the thing moving forwards. People get deal fatigue, they get stressed out, they start thinking that... There's an ulterior motive and all these kind of human emotions start clouding the issue. And once that starts to happen, that's when, you know, the rails diverge and the thing starts to head for the buffers really.
speaker-0: So let's let's talk about this emotional piece for for just a moment. I I know that founder legacy is a really important factor that gets emotional. ⁓ I would love to hear a story about where really understanding what the founder needed their legacy to look like made ⁓ made a deal work out.
speaker-1: ⁓ pretty much 95 % of transactions start with legacy. I've seen deals, and I'm not being horrible, but I've seen deals of business that I bought where the founders were all over legacy. It was a massive part of their consideration. And about six months after the transaction, all they cared about was the money. They had checked out, know, all the people, the team didn't mean anything to them. So, and that... I'm not, again, I'm not being harsh. It's just human nature. It's just the thing, because I think once you, once you leave a business, and it's only one of them died, ⁓ as well, which was grim. So then we were left dealing with the widow of one of the directors who passed away. ⁓ and the reality is we're all human beings when, when we're no longer close to something and involved in it, why would we have the same passion? Why would we still have the same? interest really. So what I try to do is to say what aspects of the legacy matter to you? Is it the name over the door? Is it the customer base being maintained? Is it your reputation? Do you feel that if you've sold and the business changes dramatically, people will think badly of you? What are those human components that matter to you in your version of legacy? Because again, we can use the word, but it might mean different things to different people. So we try and tease out the other thing that we use, excuse my language, but I call it the shit list. ⁓ and we say, they look at me and they go, what do you mean? And so, well, everyone wakes up at three o'clock in the morning with a sudden panic of, this could go wrong and that could go wrong. So what do you think might go to shit? And then I've got my list as a buyer, let's compare the lists and let's start striking out the things. are the factors of mitigation? that both of us can then sleep easy when we wake up at three o'clock in the morning thinking, ⁓ my God, what am I doing? We've gone through that process and we struck out the things and we've agreed between us. And here's the crucial thing. Then we tell the lawyers, this is what we want. What often happens is people abdicate through fear, through naivety, through lack of experience. They abdicate responsibility to their advisors. And I've had it loads of times where people will say, ⁓ well, that's what my lawyer's here for. That's what I'm paying him for. You go, this is your transaction. Their job is to produce the paperwork. If you abdicate responsibility to your advisors, more often than not, it will fall over.
speaker-0: Yeah, I see that a lot. And then if your advisors don't agree with one another or have different perspectives, that that can get even messier.
speaker-1: Yeah, for sure. And I'm sure you've seen it, Clint. The lawyers have their little competition about whose clause is better worded than the next guy's clause and all of that. And I went to a better law school than you and so on and so forth. And sometimes, less so with accountants, but sometimes financial due diligence will throw out oddities that people will then debate. And again, you have to kind of step back and try to have the helicopter view. Is it a material matter? Is it something that really fundamentally is going to cause a problem? If so, okay. What's our mitigation factor? People start talking about deal breakers. It all starts getting a bit emotional. So, you know, it's more a case of, okay, we found a problem. How do we mitigate it? That's my favorite word is what's the mitigation. I've sometimes said to lawyers, okay, so you've identified a problem. What would have to happen for that not to be a problem? And they hate that. Cause then they go, well, that's not my job. go, okay, but it's not your job to raise a problem and not come up with a solution. You're, you know, you're giving us a problem. have to participate in the resolution of that problem because your colleagues down the hall that do something called litigation will be rubbing their hands in glee when you've washed your hands of a clause that could be a problem down the road. So this is the sort of. approach that I try to take with legal teams as well. Ask that question, what would have to happen? What would that have to look like for that to be okay? And that changes the tone and the conversation.
speaker-0: Yeah. You know, I'm curious, guy. One of the things on the buy side that that we see more than occasionally is a high degree of founder dependence. So earlier on you talked about the more that your business looks like a a sausage machine, the the better off you are selling it. But ⁓ I've seen businesses where everything has to run through the founder and and then as a buyer, we're sitting here going, Okay, can we retain this person? We're about to make them a millionaire, right? And then we try to figure out how to do retention. Is it a holdback? Are we going to do some sort of earnout? Like what's the mechanism for us to hang on to this individual because the business is so dependent upon them versus one that is ⁓ you know, plug and chug. Yep. Had do you have a story, a situation where you've seen that founder being really dependent and and how did you overcome that with this with the buyer?
speaker-1: Yeah, I've seen, I've seen those situations, a couple of examples that didn't really kind of end the way I would have wanted. acquired a business that was founder dependent. We did a lot of engineering to fix the business, make it better, et cetera. And he got ⁓ a good lump of cash, is, which is what he wanted. But the deal was that he would stay to really kind of provide the sales part of the business. He knew the customers. He, the logic of doing the deal was actually to take away all the operational stress, admin, et cetera, finance, which was, which was a big driver for the sale. the, but the reality was that the amount of money that he received meant that he spent more time on the golf course, ⁓ than, actually really paying attention. And we started to see the key numbers dropping off and that resulted in selling a business back to him because we couldn't really get away from that owner dependency. ⁓ so that was, that was interesting. We made some money, but it didn't really end where we wanted it. Similarly, I made a massive mistake when I bought the business, my due diligence was poor. We bought it on the premise that we knew that there was a heavy concentration. 80 % was a government contract. ⁓ and all the indications were the government contract would be fine. ⁓ the seller got big lump of cash to finish his house in Cyprus. And then the contract was terminated. Government policy changed. We got wind of the fact that he probably knew that was coming. And so the conversation turned to, well, what do we do now? And he was very much kind of, well, not really my problem. So we just said, fine, we'll, you know, we'll close the company. And it was a small business and, he, said, well, what about the guys? I said, promise me, I promise you they will get jobs in it in an instant. They were in high demand for the skills that they had, which was exactly what happened. So again, not the outcome that we'd set about really. that's a lot of it is in the early days for me, was mistakes in due diligence. was mistakes in going back to my point. And one of the things that I stress early on in conversations with sellers is so the day after completion, what's changed, what happens in your life? You know, what do you see? And in NLP, they call it future pace, where you project your vision of where you think you're going to be. I really work hard at getting the seller to future pace what they think they're going to do. And then almost kind of war game that to go, okay, let's test that. Because if there's a role for them in the business, they need to feel like they're making the right contribution. For us as a buyer, we need to make sure that it's financially it makes sense, but you also have the challenge of the shift of culture. So if the previous owner is sticking around, even if they've sold and they're a consultant, you've got the challenge of the staff. Do I look at him for instruction or do I look at her for instruction? Where does my focus go and who do I listen to? So the role that someone has post-sale is critical to really work that through, not just hope for the best. I did a deal where we didn't really pin down the role of the seller, but he was genuinely helpful. And we had to realize that we needed to sort that out some weeks, months into the transaction to get that cleaner. And that was okay. That worked out. But that was after the lessons, if you like, of what had gone before. And in the UK, there are tax issues associated with selling. So we have a form of tax relief for sellers, which needs them to step away from the business whilst they can still be a consultant. So that can work quite well, but these days we've put lot of effort into drilling down into what exactly are you going to do? What are your expectations? What do we need? What's best for the business? And I'd talk about The triangle, always say these days, the top of the triangle is the company. The company is an entity. And for the buyer and the seller to succeed in what they're stepping into, that top of the triangle needs to be looked after. And everyone has to have the mindset that if we protect that, this bit will be fine. Because no one ever wrote a spreadsheet, it didn't look good. But the gap between a spreadsheet forecast and reality is often quite considerable. What happens when that lovely looking spreadsheet doesn't turn out to be the figure at the bottom that we all hope for? What's plan B? And if you've mitigated those elements, got clear about what everyone's expected to do and focused on protecting the business, then really the rest will work. know, someone might have expected 24 months deferred consideration, but if that stretches to 36 and they get paid, they're really you know, is that a material change? having those conversations early on for me is really important.
speaker-0: That makes a ton of sense. You know, speaking of the spreadsheet, there there's a a quote I have from you that says, ⁓ don't read the accounts like an accountant, read them like the story of a business. ⁓ so while we're on the topic of of spreadsheets, I I'd love to understand how you go about doing that and what are some of the hidden values that could come out of that, the upside or some of the warning signs that ⁓ folks should be looking out for.
speaker-1: Yeah. So some things to think about. Most business owners focus on the P &L. What are our sales? What are our profits? And underpinning that is how much money can I take out of this business whilst I'm running it? In dividends or whatever the remuneration strategy might be. And normally that's pinned to what their tax bill is going to be. In the States, it's the IRS, lovely people. In the UK, it's HMRC. So everyone in business resents paying large amounts of tax because most of us feel that governments and agencies waste it. And we know how hard we've worked to make it in the first place. And I think that that's a natural feeling that most people would have.
speaker-0: It doesn't seem to matter what side of the political spectrum you're on, nobody loves paying taxes.
speaker-1: Yeah. And the thing is, if you're in business, you do work hard. You do carry the stress. You have a lot of responsibility and it's not easy. You know, especially in the current global climate. So I think people in business, especially feel that more so than perhaps employees. Employees don't really have a choice. You know, they've got to fix the amount of tax that they've got to pay whether they like it or not. And if they need to go and get a bigger job, then they'll pay more tax. You know, you just can't get away from it. So. But that's why I say that most people focus on the P and L. Very few business owners that I've worked with understand or pay attention to a balance sheet because the usual repost is on my account and takes care of that. What I try to do is to help people to understand that the balance sheet is the alternative to a sale. In other words, if you can't sell your business, then you're going to get something that looks like the balance sheet. If you don't understand what the balance sheet is, on what makes up the balance sheet, then you could be really badly disappointed. So for example, well-run businesses often carry quite a lot of cash. And the reason is simple because it's easier to store the money in the bank in the business than pay income tax on it. But obviously when you come to sell the business, then you'll pay a lower rate of tax, capital gains tax in the UK, which is advantageous. So I call it storing acorns. You know, they kind of store the acorns. ⁓ with no particular plan as to what to do with the cash other than maybe when, when we exit. But then you look at the other current assets. So you look at things like stock, look at fixed assets, depends what, type of business it is. If it's, if it's plants and machinery, then great. There's some real value in there, but if it's a service company, there's not really going to be much there. The assets go home every night. So, ⁓ you've got to educate people to understand. Balance sheet's like an inverted pyramid in a way. The value should sit at the top. And then hopefully if you've got the balance right, it should be a bit skinny at the bottom. And then your shareholders funds mean something. So I look at a balance sheet from what's real and what, what if, if you had to close it, what could you turn into cash in the bank? And that's where the trick lies. That's where you see the story of the business. So If a business is making profits each year, but that cash is going out to the sellers, that's okay, but it is what it is. But if the business is making profits and that's being reinvested in equipment, in people, cetera, then a lot of that story you see in the balance sheet. That's what I mean by the story of the business. Then when you look at the P &L, you see in the detailed P &L, you'll see what they're spending money on. and how that relates back to the balance sheet. And then you get a picture of the psychology of the seller and how they run their business reflected in the figures. And that's what generally I mean by reading the story of the business in the numbers.
speaker-0: Yeah, got it. Well, ⁓ guy, as we ⁓ get close to to wrapping our time together, I would love to get your thoughts on what happens after close. We've talked a lot about the mechanics of getting to the deal, ⁓ a lot about running the business after. I I wanna focus on that time the first thirty to sixty days. And I'm curious what you've seen during that time that that you know the business is either going to sink or swim based on how that goes. Just some of your insights or or maybe a situation where you've seen those ⁓ first couple of months be really determinative.
speaker-1: Yeah. So definitely starts before the close. One of the key essential documents, if the business doesn't already have it and it's scary how many don't, would be a really robust cashflow forecast. Cash is king. P &L is great, but we all know that cash is the main driver for a business. So not much point making on paper, lots of profit if you're not collecting the cash in. So something just to hark back briefly to the accounts as well as to look at the cash generative. performance of the business and understand that. And even ask questions around when was the last time you put your prices up? Because a small notch in gross margin can have a dramatic impact on cash at bank. So things like that that we would look at. So is there a scope exactly that? When did you last put your prices up? Would customers really notice two or 3 %? And all of that would feed into a really strong cashflow forecast. The other thing that we would look at is continuity is massive. what risks to continuity are we looking at? If the sellers want to leave on day one, is the business genuinely enough of a sausage machine that no one's going to notice? And you do see them, you do see businesses that are properly set up like that. So the business operates without the owner, but they're not common in truth. So that's a massive factor. And then as we touched on before, Do we then have a programmed handover period that makes sense for them, for the business, for the customers? Another story I could share with you, I bought a business in a 30 day turnaround. They paid off the bank debt. We set up the funding. They had some business that they could land but didn't really want to. So we got all of that going. And within the next 30 days, all the suppliers said, ⁓ it's great that you're on board and we're delighted to see you here, but we're going to change all your terms. And now you've got to pay us in 30 days, not 60. So I carefully planned cashflow out of window within the first month. understanding continuity, understanding that transition is critical. That you don't have nightmares and challenges almost immediately that you're stepping into the business. And obviously the last bit of that is people. Spend time. You have to, you can't buy a business. don't think anyway, and be an absolute landlord. You have to be there and you have to stamp your style, your personality on those people. Listen to them. One of the simplest things that we, that we did was, we bought a business where we said to the team, what would make your day to day life easier? And to a man, they all said, can I have a second screen for my computer and can we upgrade the computer? And that's. an immaterial cost to the business. But the boost to morale was massive. So think of the human component always. Most people, when you step into a business, their biggest fear is that you're going to get rid of them. You as the buyer, that's your biggest fear, that they'll leave. ⁓ just do the thing that prevents that from happening, really. That's really, really important.
speaker-0: Yeah, and it's amazing what happens when you just ask people what they need.
speaker-1: Yeah. Yep. And it's often the simplest of things. They don't expect you to spend a fortune, but small things that make such a difference boost morale.
speaker-0: Well, guys, thank you so much ⁓ for the time together. This has been a great conversation. ⁓ where can listeners find out more about you and learn more about your work at Fidelis?
speaker-1: So I have a YouTube channel. So I'd be really happy for people to go and search me out on YouTube. It's easily accessible and see my mug on there. that'll be good. And then we have a website, which is fidelis-advisory.co.uk. You'll see me on there when we talk about our approach to transactions. So I'd love to see people search me out on there really. Just drop me a note. and always open to conversations. People want to find out more ⁓ and learn more about what we do, whether that's on the advisory side, doesn't particularly matter. We tend to focus on the buy side, but we've also helped lots of people to sell because we just kind of reverse engineer our whole philosophy. One of my favorite deals was we had a big tax change last year. ⁓ And I was introduced to a lady who ran a hairdressing salon. So not a normal deal. ⁓ but her accountant has said, you're not going to be able to sell this. And we debunked that we got the deal done inside a month before the tax change. And we structured it so that she sold it to her general manager. And they sent me a picture of them in a bar embracing, cause they were so happy that they'd done the deal. So I love that as well. so that's, that's a big driver for me.
speaker-0: Well, it's a great success story. So, guy, we'll make sure we ⁓ link to the YouTube channel and your website in the show notes. Thank you again. ⁓ really appreciate the conversation.
speaker-1: My pleasure. It's been really nice to spend time with you, Clint. Thank you. Thanks for listening.
speaker-0: To Master Your Merger, hosted. Be sure to follow or subscribe so you never miss an And if you found this valuable, share it with Explore toolkits, resources, and upcoming projects, including our free roundtables, visit MasterYourMerger.com. We'll see you next time.
speaker-1: episode. Share someone leading through a deal to programs.
