This season of No More Practice presents potential sellers and buyers with a number of practical and valuable lessons
Filming this season of No More Practice has been a fascinating process. Having two very different characters to follow in Jim Taggart and Sam Henderson has meant we have been exposed to the assessment of three of the biggest dealer groups when looking at growth strategies for practices as well as sales and earn outs.
Interestingly enough, while numbers are always important, it has been the emotional and people side of business that has garnered much comment and questioning from our judges.
In this episode will you will see CBA Wealth Management Advice’s Marianne Perkovic, Securitor & Licensee Select’s Matt Englund and Genesys Wealth Advisers’ Steve Davison question firstly Sam about his growth plans, and then Jim around his sale.
For Sam, the judges were extremely interested in his lifestyle aspirations and what role he wanted to play in the business moving forward. It seems that what most concerned the judging panel was the role Sam as the head of the business was to play, and he how he intended to drive growth in this role.
Strategy for Sam is incredibly important moving forward to capitalise on the strong growth his business is already experiencing. It seems the old adage is true that you buy people when you buy a business, and our judges questioning really demonstrated the importance of the role of the owner in the future of the business.
The judges also questioned Sam’s pricing strategy and whether or not an ambitious EBIT of 60 per cent was sustainable or even achievable. It seems the external environment and sensitivity to the broader market on fees is another factor when the big end of town assesses strategy and pricing.
For Jim the judges were questioning two things in particular – his communication and training of staff to get them ready for life post-sale; and what Jim had plans for next.
Obviously in any earn out situation, keeping staff is extremely important to maintain the value and continuity of the business. The judges wanted to know what training Jim was giving them, and to get an understanding of whether or not Jim was stepping back in the 15 months to earn out, and letting the staff take the primary responsibility for clients.
The judges emphasised to Jim how important a succession training plan is when a practice is changing hands in order to minimise key person dependency.
They also questioned Jim around his plans after his earn out period, and asked him what the next phase of his life involved after the sale had been achieved. It seems the judges believed this mindset shift would help Jim successfully make the transition.
For anyone in growth or sale/transition mode, it is fascinating to be part of the judging session for Sam and Jim – because at some point it will be you who is being judged. I hope the lessons learned from No More Practice help you on that day.
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