Tristan Rice speaks to Vodafone Business Hub about issues faced by business owners

SI Partners’ Tristan Rice spoke to Your Ready Business’, Vodafone’s Business Content Hub to give an insight on the traits and habits of a successful business, including sustained growth and the sale process. 


What are the main reasons that people approach you? What’s the first question that they ask?

One, there’s a problem that they don’t know how to fix. That could be an operational problem, an ownership one, i.e. taking one share out becomes confusing if that shareholder owns half of the business.

Two, they’ve reached some kind of threshold in the business where they feel like they don’t have the skills or experience to get to the next stage. That might be a result of having grown very fast; in a business of 30 to 40 people, the founder can’t touch all parts of the business like they used to. Suddenly, they need to change their structure and the way they operate. That can be very difficult for an owner manager to do because they’re used to controlling everything.

Three, they want to sell or have been approached by someone who wants to buy the business and they need help preparing for that.


You mentioned it can be difficult for business owners to reprioritise their role in a growing business. So, what’s the typical emotional state when they’re considering giving up their management responsibilities and/or selling their business on?

If you start a business from scratch, you’re doing everything from answering the phone to dealing with clients. And as you get bigger, you pass on those responsibilities to your team, but ultimately, in a business of 30 to 40 people, you can’t do it all by yourself.

Lots of things can go wrong when you start giving responsibilities for key areas in the business to your employees without the right preparation. So, there’s a lot of fear because they feel like [other people] can’t do it as well as they always have. It’s essential to recognise that there are people that can do those jobs better and, with the right preparation and structure, you can slowly relax into this new arrangement.

Everybody thinks that their business problems are unique. However, the issues they face are often very familiar and we have tried and tested solutions to solve them. Sometimes, people just need outside help to confront and address the issues.


What are the common habits of the businesses that go through sustained, successful growth?

You definitely get natural entrepreneurs and then you get accidental entrepreneurs. You need an element of the natural entrepreneur to continually grow a business and get it to 50+ people. It does require more than just relying on luck.

So, very often those sole entrepreneurs are very successful because they don’t do anything by committee, they just know their own mind, they know what to do and they crack on with it. But you need the people who are a safe pair of hands, who can tidy up after the entrepreneur who is charging ahead, taking risks and charming the client.

For the majority of business owners, who may not have that total, unwavering confidence in their approach, it is really important to get different perspectives. Those businesses, that seek the opinions and advice of others who have done if before, tend to gain a new lease of life and do better.

Also, I think that those who are passionate about what they do and about the culture of their business and not just the financial aspect tend to do better long-term. You need more than just a financial target to drive a business forward. If you can create something really special and a culture that people want to join and do their best work, and the passion for the work is coming down from the top, then that tends to sustain a business.


So, a big hurdle is that businesses focus too much on the financials without giving due respect to their people and culture?

A lot of people spend too much time looking at who’s been bought, for how much and thinking “How can we get that?” Saying; “Our plan is to make a million-pound profit and then sell and make x amount of money,” isn’t a business plan; it’s a personal financial objective, which is fine but it can’t be what drives the business.

You can’t just set yourself a financial target because all you’ll end up doing is scraping together work from wherever you can, which doesn’t build a business of great quality – it doesn’t tend to be very sustainable. Having a business plan based around something new and high value, being focused on the clients that you want and the staff, and ensuring that you’re attractive to those people are the fundamental drivers in a business.

Once you’ve got those in place then you can finally attach those financial metrics to the business engine and make the profit that will get you to your financial target.



What is the usual time frame for selling a business, from inception to sale?

Most businesses will undertake some sort of transaction within their first ten years. They tend to hit our radar three to four years in, which would be three or four years prior to sale. And the nature of our work might be consultancy to get them to the next stage, or advising on the sale of the business. Don’t underestimate how long it’ll take. The actual sale process will probably take a year from start to finish.


When is the best time to start a sale process?

The most important thing is to start the process while the business still has plenty of growth potential and you have energy and enthusiasm to deliver it. Most buyers are looking for growth and entrepreneurial management – they don’t want to buy a business that has peaked and that the management are looking to leave. You also need to think quite far ahead because, in most cases, a sale is a three/four-year process beyond the completion date and, much of the value paid is based on the business’s future performance.


What tips would you give to business owners who are looking to sell?

  • Be clear about your objectives – professional, financial and future commitment to the business.
  • Be honest about where your business is today in relation to those objectives, in other words, what’s the gap between what you’re trying to achieve and where you are today?
  • Develop a route map to get you from where you are now to where you need to be. Ensure you know what you need to do in order to get there.
  • Think about how an acquirer might be able to achieve your business objectives better or faster, as well as how they can add value to your business. This will inform the logic of your approach and start the conversation around what you can build together, instead of just what you’ve done in the past.



  • What do you want?
  • Where are you now?
  • How do we get you there?


Anything else you think ambitious business owners might not be aware of?

In relation to a sale, it’s worth making sure that the ownership of the business and the economic rights are sitting in the right place. In other words, if you own all of the business, whilst that is great and you get all the money, it’s probably going to make the business less attractive to acquire and result in them paying less money for it. They’ll be worried that all the money will go to one person and that gives them very little hold over any of the other senior people in the business.

When you sell your business, you get money in exchange for your shares. In addition to this, the buyer will want lots of commitments from you in terms of your links to the business, which is essential for deferred payments. If senior management aren’t involved in the deal, because they don’t own any of the shares, then the buyers have no hold over them. They can just disappear if they want.


How do you go about divvying up shares in a beneficial way?

For a founder, it’s worth thinking that, even though you may own all of it today, if you want to make your team excited about coming on the growth journey with you, then they have to feel like they have a stake. Spreading equity among your team ensures a sense of ownership and a common goal. Most people think about this way too late in the process, when it’s something they should be thinking about years in advance. Trying to move shares around immediately prior to a sale is incredibly difficult from a tax and expense point of view.

Tristan Rice leads SI Partners’ M&A practice and has a wealth of experience advising creative and technology businesses on building and realising equity value.