As the firm’s newest Partner we’ve given Ross Garfitt the responsibility of writing this month’s blog. Ross looks back at his travails of buying into a business, the financial assessment, the legal requirements and his biggest learning from the experience, the emotions of it all. Ross’s insight will mirror many who have or will one day look at starting a new business or buying into an existing business.
The last six months have been an exciting and daunting period. Shortly before Christmas 2012 I started discussions with the existing Partners of Langdowns DFK to become an equity partner. The journey that followed was fascinating – I hoped this was going to be straightforward and that my nerves held…
The excitement of coming home to tell my wife (Vicky) that one of the goals I had been striving for had finally happened was amazing! This was celebrated with a drink in Winchester, at one of my favourite watering holes. Then the questioning started… “How much is this going to cost?” “What responsibilities do I have?” “When’s it all going to happen?” “What am I going to have to put my name to?” The list went on and I realised this wasn’t just something for me – it was for both of us. And of course there was “How much are you going to earn because I want to be a lady of luxury?!”
So over a few glasses of wine we went through the salient points. I answered the questions the best I could. Unfortunately, it would not mean the life of luxury for Vic, but would be a exciting, new phase of our life.
For years as an accountant I’ve been advising clients about their business; starting up a new company or growing an established business. This time I had to take my own advice, which meant taking a dispassionate look at the numbers. Even though partnership has always been my professional goal, it was still important to check the numbers stacked up. So, with my best professional head on I reviewed the various numbers; the cost, the future return and risks.
At the beginning of 2013 the realisation started to kick in as I received the many legal documents; shareholder’s agreements, partner’s agreements and so on. Many of these I had seen in recent years, but this time I had to sign the documents, not just review them. When your name is at the bottom you suddenly feel the tension! Given the complications with such documents, and the potential for emotions to run higher than normal it was time to get the professionals involved…
Bringing a solicitor on board meant I had an unemotional pair of eyes looking through everything. The review highlighted my responsibilities in the short term, my potential exposure in certain scenarios, as well as the process when I retire in the distant future. With some trepidation, but now with better understanding, everything moved forward.
While this was going on I still had the big one to deal with… how I am going to buy in? Like many in my position this means going to the bank and putting my case to them. I was fortunate to find that the bank were willing to lend the money, but it did still amaze me how long it can all take for what seems like such a simple matter. And of course, there was more paperwork, and more explaining to my wife exactly what we were signing up for.
The sense of relief when everything was approved took a weight off your shoulders.
Finally, it just left for everything to be signed and the money to be transferred. Thankfully, on 1st May my job was complete… No, I should rephrase that; on 30th April 2013 I resigned as an employee and start my new job, with new responsibilities and challenges. A job I look forward to and hope to thrive in.
So, what lessons have I learnt? I’ve always understood business, I’ve been an accountant for a long time, but this process has shown me the emotional effect that you experience when going into business. When you put your own money on the line it has a dramatic effect on the way you think. I had always thought I had an appreciation of the emotions, but this truly brought it home. But right now, I’m happy, excited and nervous!
What happens next? Well, the future is unknown, but I’m excited to see what it has in store. I’ll be going into everything with a great group of guys that I’m proud to call my business partners. We have a fantastic team working with us across our three offices, a team that we rely on and put our faith in. We have amazing plans for the firm and everyone we work with. So, like my Partners before me, I can’t wait to for the future to arrive!