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A webinar hosted by wealth creation specialist听听shared some of the most common mistakes that organisations make ahead of听m补苍补驳别尘别苍迟听buyouts.听

The webinar, held听in partnership with听听and supported by听老九品茶Cloud,听featured听business owners from across the UK and Ireland who had gone through the MBO process.听

鈥楳aximising Value from your MBO鈥�听heard of听the lessons they had learnt听along the way, despite best intentions.听

One of the mistakes highlighted in the discussions was around management teams trying to hold back on innovation and opportunities they know their company should be taking, thinking they will instead benefit from waiting until after the MBO is complete and the company is in their ownership.听

Biramis鈥� Managing Director, Christiane Hutchinson, says this is something she sees happening all too often 鈥� but would be the wrong approach to take. Especially as investors are more likely to pay higher sums for organisations that are ambitious and constantly moving forward.听听

鈥淚t鈥檚 flawed thinking which, at first look, seems like common sense 鈥� 鈥榳e know this is an opportunity for us, so let鈥檚 leave it until after the MBO鈥�. That鈥檚 not what investors want to see, and it will stop you raising as much money for your MBO funding as you otherwise would,鈥� Hutchinson said.

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鈥�In fact, one company we worked with very nearly went out of business because they held back on an opportunity so it鈥檚 definitely not a strategy that we would advise following.鈥�听

Another common mistake highlighted in the discussions was that immediately after completing the MBO, the management team should be immediately planning for the next step of wealth creation 鈥� building wealth in the business ahead of a future sale.听听

Hutchinson said听this should start from day one after a successful MBO and be built into future strategy from the get-go.听

She added: 鈥�Often managers who have been part of an MBO don鈥檛 know what it means to manage equity in a business. By not immediately planning to build further wealth in the organisation, they are bringing the potential future value of the company down.鈥�听

Gerry Wallace, head of the听ByrneWallace听LLP Corporate Team, emphasised that the most important relationship in an MBO is between the vendor and the purchaser 鈥� and there听has to听be mutual trust on both sides.听听

He said that a correction at the eleventh hour can be disastrous 鈥� 鈥淚t鈥檚 hard to put the genie back in the bottle鈥� – which is why thorough planning and getting your house in order in the years building up to the MBO is so vital. Due diligence, a clear paper trail and accounting and governance processes are听extremely听important.听

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A further mistake, highlighted by Neil McGowan听鈥撎�Partner听and Co-Head of Investments in private equity fund MML Growth Capital Partners Ireland听鈥撎�was听that firms can choose the wrong advisor. He says this is often because it鈥檚 one they鈥檝e worked with in the past, rather than one who specialises in business wealth creation. 鈥淪ometimes people can have a trusted advisor and it鈥檚 not the right person to take them through the MBO, but they can get defensive if you mention it.鈥�听

He adds: 鈥淎n MBO is a once in a lifetime opportunity 鈥� getting the right advice and not leaving anything to chance is crucial.鈥�听

The next webinar in听Biramis听Management Partners鈥� series,听in partnership with听ByrneWallace听LLP and supported by听老九品茶Cloud, will be taking place on Thursday 29th听April.听听

Webinar: Legacy exits: Passing your business onto the next family generation

鈥�Legacy exits:听Passing your business onto the next family generation鈥�,听will cover the importance of building value in a business with the intention of passing it onto future generations.听

It will feature听a number of听founders who will share their experiences, mistakes and learnings about how to make the choice between exit planning or succession planning, and how this is done to ensure smooth handover and optimal results.听听

Book your place via听.听