Article written by Andre Bresler (Managing Partner – Benchmark International – South Africa)
Anyone who owns or has owned a classic car will attest that it is a very special relationship and one not dissimilar to owning a business.
Classic cars and businesses are assets that relatively few have the privilege of owning, they take time to build or acquire, have personality, and generally represent a sizeable investment and very personal commitment for anyone.
At the outset of these relationships, our perceptions of what the experience will be like is dominated by excitement, passion and it is often a journey we have spent many years planning and saving for.
The risks have been calculated and monetised yet despite knowing that as physical or metaphorical assets they do break, and cost money, we have an ingrained belief we will get through it and that value will accumulate with time.
It is inevitable, unless one is fortunate enough to be able to pay a premium price for a pristine model, that the early stages of these ownership journeys are characterised by a series of unfortunate discoveries – usually requiring us to roll up our sleeves and invest both time and money to rectify. It is something we readily do as this beast is now a part of us and with ownership comes responsibility.
Like classic cars, business ownership takes us on a rollercoaster ride of emotions that range from pride and joy to anger and despair. One faces a multitude of risks from accident to theft and even the collapse of a market for it. The sacrifices can be significant yet from the outside others often perceive us as merely lucky, and in viewing the finished product do not have insight or appreciation for the all-consuming toil, sunk and personal cost that it has taken to get to this point.
Driving the old Stag was not possible without being approached by somebody wanting to acquire the car and whilst they had all expressed an interest to buy, it was once the door to such a discussion was opened that they diverted the negotiation from their motive and started to approach the transaction from a purely clinical perspective. It is at this point buyers begin quoting market-related metrics seeking to mitigate the risk of what will be their investment. Such an approach is common in business too, where to a seller the future value potential and emotional attachment can often outweigh the immediate cash consideration, and we fail to see the other side and balance the risk to a buyer. It is for this reason that the intangible benefits of a deal are often larger considerations than the price attributed.
Selling a classic car is a difficult decision, it marks the end of a very personal relationship and what has been an emotional journey – I imagine, for some, it can be a process as difficult as choosing a spouse for one of our kids might be. Price becomes important as it measures the worth we attribute to it, and the reward for the investment or sacrifices made. Equally, however, is finding the right person who we can trust to nurture, protect, improve, and care for our treasure, which achieves a value beyond compensation.
Central to the decision in selling a classic car is always the consideration of “what next?” If the transaction facilitates the acquisition of a more prized possession or the freedom to pursue a long-sought ambition, the decision becomes more palatable. Similarly, in selling a business it is vital to plan for what comes next and as an example, in the case of retirement, it is key to have something to retire to, as opposed to from.
It is a commonly expressed view that anything is for sale at a price but committing to the prospect of a sale is a fundamentally different process to being available to be bought. Knowing your asset, the buyer’s next best alternative and the adventure you would pursue next are all key to a successful outcome. Whilst experience, financial, analytical, and other corporate finance skills are minimum requirements for an adviser, someone who’s been there, done it and who intimately understands the internal conflicts only a business owner experiences can certainly add value in navigating this journey.
About Andre Bresler:
Andre is the managing partner of Benchmark International. Benchmark International’s global offices provide business owners in the middle market and lower middle market with creative, value-maximizing solutions for growing and exiting their businesses. To date, Benchmark International has closed over 600 transactions in excess of $6B across 30 industries worldwide. With decades of global M&A experience, Benchmark International’s deal teams, working from 12 offices across the world, have assisted hundreds of owners achieve their personal objectives and ensure the continued growth of their businesses.