Build Sell Retire

By Chris Averill and Luke Johnson

When global entrepreneur, Chris Averill stepped into the world of M&A little did he know of the pitfalls and challenges that awaited him.

Slightly bruised and battered, he nevertheless walked away successfully selling his business for much m

• Language: English
• Publisher: FCM Publishing
• Release date: Jan 21, 2021
• ISBN: 9781838091811

Book preview

Table of Contents

Acknowledgements 3

Foreword 4

Introduction 5

01 Entrepreneurial Spirit. 6

02 Forget What You Know. 9

03 The 3-2-1 Success Plan. 11

04 What’s The Price Of Happiness? 13

05 How much is My Business Worth? 15

06 Fail To Plan, Plan To Fail. 18

07 Right People Right Time. 22

08 Failing Fast. 26

09 What Value Does a Broker Bring. 31

10 Imposter Syndrome. 36

11 It’s Lonely At The Top. 38

12 What’s The Worst That Can Happen? 41

13 Seller Beware. 44

14 Deal Day. 47

15 The Morning After. 50

16 Should I Stay Or Should I Go? 51

17 The Next Next Thing. 55

18 Summary 59

19 Start with Why. 62

M&A jargon buster 65

Further Reading 66

© Chris Averill 2020 This edition published: January 2021 by FCM Publishing

ISBN: 978-1-838-09180-4 Paperback Edition

All rights reserved.

The rights of Chris Averill to be identified as the author of this Work has been asserted by him in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988.

No part of this publication may be reproduced, stored in a retrieval system, copied in any form or by any means, electronic, mechanical, photocopying, recording or otherwise transmitted without written permission from the publisher. You must not circulate this book in any format.

This book is part autobiographical, reflecting the author’s present recollections of experiences over time.

Some names and identifying details have been changed to protect the privacy of individuals.

Copyright of all illustrations and imagery used within remains solely with their originator. No breach of copyright is implied or intended, and all material is believed to be used with permission. Should you feel that your copyright has been impinged, please contact the publisher to ensure appropriate acknowledgment may be made.

Cover Design by Chris Averill

To Kate for your

unconditional love and

continual belief in me.

Acknowledgements

My greatest thanks

are for the support that my parents, Brian and Sylvia, gave me to pursue a creative education whilst never living up to the academic expectations of most of my teachers.

To my in-laws, particularly Bill who mentored me through my early days of business and offered me many quotes that I still use today.

To Peter, who I blame for my love of flying and I am grateful for his support in pushing me to take a work experience role at a design agency he knew.

To John, who gave me my first job at Pantechnicon in Chelsea, seeing some potential and starting me on a career that culminated in me setting up my own businesses, whilst continuing to mentor me on my journey.

Shailen thank you for being a great friend and having the vision to bring WAE into your work as a partner, you will never know how much that meant to me.

Bobby, my partner in New York, I miss working with you every day, you were the ying to my yang.

Phil Jones whom I professionally stalked in an effort to become my mentor and who’s Podge social events were and still are the highlight of my social calendar.

Joe and Tristan at SI Partners, thank you for guiding me through the minefield, shielding me from the reality and realising the true value of WAE. Simon at Bird & Bird my lawyer who broke the lawyer mould and made the whole legal process fun(ish).

A los dos Martins, muchos Willies, a Guille y Adi por los viajes por carretera y hacerme parte de sus familias, a Borja ya todos en Globant, pero especialmente a Pancha, mi socio en BA.

My publisher Taryn, for tirelessly working through my continually changing mind, guiding me to get to this point, and not telling me how she really felt about my views.

Mike my editor, who came along at the last minute to make sense of my word soup.

To Jim Rogers for turning the ideas in my head into his brilliant sketches and for FreePik for the use of their designs.

My clients, so many wonderful friends, who took the chance on an independent business rather than stick with the no one got fired for hiring IBM mentality, on the whole your faith was repaid.

I particularly want to say thank you to Kevin Milnes, Phil Young, Martin Fewell, Doris Daif and Alice Milligan, all of you understood what could be achieved by thinking big and you all made this possible.

And finally, to every one of my colleagues in London, New York and Abu Dhabi; too many to mention individually. Those who took a huge risk to work with me from day one right through to the day I left, all my success is yours. And in particular to Stephanie Taylor whose loyalty, hard work, professionalism and friendship made much of my journey through WAE possible.

Foreword

by Luke Johnson

This is a practical book

by a hands-on entrepreneur. Chris Averill has done it himself – built and then sold a business – and decided to use his own experience to help others in a similar situation.

Over thirteen years he developed his marketing services business and then exited. He says he has only semi-retired, and in fact, he’s still busy mentoring and making angel investments. This is a typical journey for many founders: they only carry out a disposal of their company once, so it’s important that they get it right. The purpose of this manual is to try to ensure they do.

Chris covers all the most important issues from the point of an owner looking to realise value from their business. He describes how the founder needs to start planning some years in advance so that the business is prepared for a new owner. He writes about how vital it is that any seller decides beforehand how much money they need from their business sale, in order that they can fulfil their dreams.

He discusses earn outs, how to obtain a valuation for your business, management succession, appointing intermediaries, and numerous other aspects of an M&A process. It is full of personal anecdotes from his own journey. As ever, having seen the highs and lows himself, he is eminently qualified to impart relevant words of wisdom to the first time seller.

The author has also interviewed a number of other entrepreneurs who have sold their company. Transitioning from being a hands-on owner to non-executive with a bank balance can be a traumatic process. Many founders derive a great deal of their identity and purpose in life from their involvement with the business – when they step away, they often suffer seller’s remorse.

Chris spent a rollercoaster 13 years developing his company, and he provides an engaging description of the ups and downs – which are typical of the trajectory of the vast majority of entrepreneurial businesses. He discusses his feelings of loneliness and imposter syndrome from which many founders suffer.

I commend this volume to anyone embarking on a startup, or those who work with entrepreneurs. It is a warts and all, first person tale of how to grow a company and make a fortune – and what to do afterwards!

Introduction

Building and selling

businesses is not something people do every day, but for those fortunate few who have taken the leap of faith to create a business or help grow one, it’s worth planning what an exit may look like. My journey from start-up to successful sale took thirteen years and saw us grow from our London headquarters, to include a New York City (NYC) base, and work with many of the world’s biggest brands.

Taking my — often painful — experience and combining it with interviews with hundreds of business owners, sellers, buyers, investors, and all those caught in the middle, I have written this book to bust myths, answer key questions, and challenge the perceived wisdom in the Mergers and Acquisitions (M&A) industry.

At times it may seem like I’m painting a dark picture, or that it’s more hassle than it’s worth. It’s not, but it’s not easy either. If it was, everyone would do it and do it successfully! The only advice I could find when I started the sales process was: ‘Don’t fucking trust anyone!’ This was a little dramatic, but succinctly paints a picture of the experience many have had.

My hope is that you can dip in and out of this book, no matter what stage of the sales process you’re in. There is something for everyone, whether you’re just thinking of selling or have set the wheels in motion. There are summary points at the end of each chapter that you can review, to easily see what each section is about.

Most importantly of all, this book is here to share the pitfalls, pains and failures that my fellow entrepreneurs and I have been through, so you don’t have to. I hope it’s a valuable resource of ideas, tips and tricks that will help you make the most out of your business so you can walk away — when you choose to sell — happier and wealthier than you were before.

01

Entrepreneurial Spirit.

Why dyslexia is a superpower

I would have

never called myself an entrepreneur until one day I realised that I had pulled off something out of the ordinary. At 48, I’ve managed to achieve the kind of lifestyle I used to read about in magazines. I get asked how amazing it must be to have boys’ toys — fast cars, a boat — and financial security for the future. I won’t lie — it’s incredible. But do you know what’s even better? Freedom.

I choose what to do with my time, what projects I take on and how often I work. It’s summer as I write this and I’m enjoying the sun most days.

My family has total financial security. I sold my company for far more than I had ever dared to dream it would be worth, and with excellent wealth management advice and a property portfolio, the pressure of everyday money struggles that most people face has gone.

I have the freedom to complete my private pilot’s licence for fixed-wing aircraft. Being a pilot is something I have wanted to do since I was a teenager. Still, instead of going into flying at an early age, I decided to go into design, which ironically now allows me to fly for fun rather than a job.

Getting here required a leap of faith and taking many risks. So, this book is a reflection of my time building a business, and specifically selling it. I screwed up and I learned a great deal. I now know where I screwed up and this book explains what I’d do differently, but in the end, I succeeded in finding happiness, health and wealth.

Sounds good — maybe too good? I know that with so many ‘guru’ books out there it would be easy to mistake me for just another ‘been there, done that’ business guy trying to bulk up a flagging bank balance. I’m not.

I’m humbled to have this opportunity. I’m not being glib; I worked till I bled, like so many business owners. I missed out on important events, forgot so many family gatherings, and I carried the stress of the company on my shoulders. But now I’m able to look back and breathe, I can see that the journey from creating my company to selling it has been one I am truly thankful for, one that has paved the way for the entrepreneur in me to continue with his motto: "What’s the worst that can happen?"

Our greatest glory is not in never falling, but in rising every time we fall.

Confucius

This quote is one of my father-in-law’s favourites, and one that I have taken with me on my path to success.

When I was at school, thirty or so years ago, being dyslexic was not really a recognised condition. School was a constant challenge for me, and it was definitely an attitudinal issue as much as a cognitive disability. Maybe they are both the same thing, who knows? But all of those challenges were a benefit to me. I had to work harder than those around me to succeed, even while feeling that I couldn’t be arsed most of the time.

I worked every holiday, either mowing lawns, or for the family cooked meats business in the Bullring food markets in Birmingham. Whether behind the counter, delivering raw and cooked meats, or (my personal favourite) spending long days and nights in the factory making hams, in sub-zero temperatures, wet and lonely with Radio 1 on a loop, I worked hard. Little did I know how much selling cooked meats to Brummies, slogging away at a job that most people would not go near, would teach me and help me to become a successful business owner many years later.

My first entrepreneurial experience was running a sideline of pork scratching sales for a year at school, on the black market. I turned a nice profit too. While this was strictly against school rules, no one in authority seemed to notice or be bothered by my high fat, high profit business. Maybe because they all enjoyed the product I was flogging!

Even during my time at university studying industrial design, I was honing my business skills. I had quickly realised that I did not have the patience for making intricate clay models of future phones, and discovered the power of computer modelling, which was clean, quick and beautiful. I could turn my ideas into amazing 3D models on PCs, without having to spend hours whittling wood in the workshop, at risk of losing my fingers to a power tool. I learnt the computer aided design (CAD) systems quickly and was soon charging my peers to create their technical drawings for them on the PC, rather than by hand.

The most important career change I made was joining Arthur Andersen in the late 90’s where I learnt every aspect of business, from pitching and budgeting for projects, to building a team, managing P&L and truly understanding what could be achieved with good leadership and a great team.

On my first day I was a team of one, with the promise of more people for every successful project I delivered. I was also left to my own devices, which quickly helped me build my own self-belief, and is an important lesson that most of us forget; hire awesome people and let them get on and do the job, don’t interfere or not trust them. Mistakes will and do happen, but as long as you are there to support them through that moment and help them understand what they could have done differently, then those future stars will continue to shine.

Mid-2003 I am sitting at one of the world’s leading digital agencies, Agency.com, in an interview for the role of senior information architect. I was not sure exactly what the title or role meant but got the gist that I would lead a team in organising the crap that most corporates want to present to their customers and make sense of it; taking the complex and making it simple.

The bosses were lovely, the offices were achingly cool, as one would expect in the second Dot Com boom, our clients all blue chip and the pay spot on. At the time I was sleeping on my mates sofa having just come back from a 12 month world tour (backpacking) and after waking up at 10am and taking a lager from the fridge for breakfast, realised I need a focus.

Sadly, the next few months were not as I had expected. The work was dull, the business did not really care about making a difference, those around me were fairly disenfranchised and I felt I was never going to change a thing. The only move that felt right was to resign, telling my boss I was going to set up my own company.

"In a downturn?" Dom said with real surprise "You’ll never succeed!"

"If I do fail can I come back?" I asked.

"Yes of course you can."

So, I walked out and set up my new business. Well, how hard could starting my own business be? As it turns out, very hard, harder than anything I had ever attempted before, the most challenging six months of my life. In fact, I almost failed before I had started. I was about to shut up shop after six months of selling with no clients to show for it when, my phone rang and my first client said yes to my proposal. Suddenly money was coming in and We Are Experience