Exits

Learning to let go

Dec 06/Jan 07 issue
 

‘Plan your exit from the start’
Name: David Williams, 38
Profile: Founded customer management company QCi in June 1998 with two partners, Neil Woodcock and Paul Weston. Sold the business to WPP Group in June 2001 for an undisclosed sum. Now CEO of How 2 Xperience (H2X), the customer and employee ‘experience’ consultancy with a range of blue-chip clients

The key to our success at QCi was having a three-year plan for growth, after which we intended to sell the business. We asked ourselves, ‘Who are the potential buyers? What will they want to see evidence of in the business?’ We came up with ten things, such as a benchmark database of customer data, thought leadership, and so on, checking them off the list every time we achieved them.

The most unusual aspect of our approach was adopting a product model as opposed to just being a service provider like most consultancies. By owning IP, our database of customer data, we could generate regular licence revenue. Then it was vital to ensure
we had a growth trajectory and sustainability, so that the business could run without us.
Having said all that, it doesn’t matter how much you plan your succession, you still have to find the right buyer. Going from suitor to suitor was an ‘interesting’ learning experience, as was wading through accountants and lawyers! It takes so much time – nine months in total – and you’re never sure whether the offer on the table is the right one. In the end, a friend gave me a great piece of advice: ‘David, you’ve just got to take the risk and hang your arse out the window!’ Sometimes in business you have to trust your judgement and take the plunge.

‘Step back and give people room to prove themselves’
Name: John Jenkins, 64
Profile: Took charge of his father’s Bristol-based restaurant business in 1989, building it from one outlet to five. Passed the business, The Lunch Lounge, down to his son in a management buyout in 2005 and has now retired to the South of France.

My father asked me to join his café business at a time when he was getting on a bit in years. He trained me up, gave me the space to come up with ideas and soon I was running the operation.

By the time he retired, The Lunch Lounge had double in size to £6 million turnover. Although my wife Linda left her career to help out, it eventually became clear that I needed more support. My son Gary wanted to join the family firm and after much persuasion on his part I agreed. He had been involved in running a hotel in the city for many years.

Early on, Gary and I argued a lot. I had fixed ways of doing things, from managing the accounts to the wording of the menus. In the end, I realised I needed to let him run with some of his ideas and see what happened. It was tough stepping back and I finally understood what that must have been like for my father, but if you want to be able to hand the business on to someone, it’s important to let them prove themselves.
In March, I sold The Lunch Lounge to Gary and his business partner and with the proceeds bought an appartment in Nice, France. When I look out over the vineyards with a glass of wine in hand, I can’t say I miss the restaurant much!
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