What are the next steps for my business?
Are you thinking about what to do next with your business? Livingbridge, a mid market private equity firm which works closely with Coffin Mew and many of its clients, offers some guidance and advice.
Sanjay Panchal, part of the investment team at Livingbridge, discusses some questions to think about if considering private equity investment.
Is private equity suitable for my situation? It can sometimes seem as if the only options when you’ve grown your business are to stay or to sell. But there are a number of alternatives you can consider.
Do any of these sound familiar?
- You’ve built a great business, but it’s outgrowing the capability of its team or infrastructure. You still want to run it for the foreseeable future but want some help through the next stage of growth.
- You still want to run your business, but you’d also love to take some money off the table.
- You have the chance to capitalise on interesting opportunities, but you could really do with someone alongside you who’s been there before to help guide you through it.
- You would like to buy the business you’re running from the existing owners.
- You want to grow your business through acquisitions but need some capital to execute your plans.
You’re ready to retire, but you want to leave the business in safe hands to a new owner who can continue its growth story.
These are all situations where private equity investment can help and offer business owners flexibility depending on their situation. Whether it’s helping your business grow faster, selling your business, selling part of your business, or buying the business you manage, private equity can offer a solution beyond a simple stay or sell.
What do I want in a private equity partner? Private equity firms come in all shapes and sizes. They all have money to invest, but finding a partner who you can build a trusting relationship with and is aligned to your strategy is the most important thing.
A few things to ask yourself are:
What do I want a partner to bring to the table?
Is it specific sector experience?
A track record of expanding businesses internationally?
The ability to support an acquisition strategy?
Access to a network of experts who can help my business grow?
Your private equity partner should bring more than just capital, but a wealth of experience relevant to what you want to achieve for your business.
What level of engagement would I like a partner to have?
All private equity firms will have a different level of engagement with their investments and you should decide how involved you want your investor to be. Would you consider involvement in decision making interfering, or do you want someone who is engaged at every step? Whoever you choose as your investment partner, you are going to have to work closely with them, so it’s important to make sure the relationship is based on mutual trust and alignment of objectives.
Is my business ready for private equity? One of the biggest challenges that businesses face is making sure they are ready to take on private equity investment. What does that mean?
In short, a lot of it is basic hygiene – making sure you’ve got a good set of accounts, ensure you’re tracking and measuring the right KPIs and can report against them, and being able to clearly articulate what makes your business different. It’s not too different to buying a house – any diligent buyer would want to make sure they’re clear on what they’re paying for. Which in private equity means understanding and building conviction in how your business goes to market, wins against its competitors and will grow in the future.
Livingbridge is one of the UK’s leading mid-market private equity firms and has been backing businesses for 20 years. We have £1 billion ready to invest over the next five years and we invest anywhere from £2 million to £50 million in fastgrowing companies across TMT, consumer, healthcare and education, and business services. Our focus is all around growth and building businesses that are sustainable over the long-term, not just a few years. We want to build companies that all stakeholders – management, employees, shareholders and customers – can be proud of. We have made over 100 investments, turning many into household names both in the UK and abroad. We get growth.
Visit www.livingbridge.com to find out more.