In 1972, David Bowie released “Changes,” a timeless song that still resonates strongly in today’s era of upheaval. Beyond its musical brilliance, the lyrics hold significant relevance to the ever-evolving landscape of business and exit strategies. They encapsulate the need to adapt to the turbulent environment in which today’s businesses operate. In the realm of entrepreneurship and exit options, “Ch-ch-changes” underscore the need for flexibility. As Bowie sings “Turn and face the stranger”, entrepreneurs facing exit decisions might find some resonance. Whether you are venturing into new markets, reshaping business models, or considering exit strategies, the song encapsulates the spirit of embracing and adapting to change. Therefore, what other parallels, can we connect to the lyrics?
“Time may change me, but you can’t trace time”
To me, this encapsulates the irreversible nature of time and the fluidity of business environments. In the context of exit strategies, it suggests that adaptability is paramount, and success lies in staying ahead – albeit not knowing what the future might hold in store.
“I still don’t know what I was looking for,
And my time was running wild
A million dead-end streets
Every time I thought I’d got it made
It seemed the taste was not so sweet”
As entrepreneurs, this sentiment resonates with us. One aspect we’ve observed and can share is the evolving perspective amongst our sellers. Many of them no longer view traditional retirement as their ultimate goal and our recent experiences, compared with business sales a decade or more ago, emphasise this thought shift.
Two compelling instances underscore this point. In both cases, entrepreneurs, too young to consider stopping work, embarked on significant new ventures after Avondale assisted with their initial sales. One of them, after seven years of relentless effort, recently sold their venture for a great return but sadly, the other entrepreneur faced the harsh reality of liquidation, downsizing, and getting a job.
In sharing this narrative, we aim to highlight the importance of prudent consideration of the post-sale journey. If you are fortunate enough to achieve a successful exit and accumulate capital, it is wise to diversify and spread the risk. Starting a new venture is undoubtedly an exhilarating opportunity, but careful risk management, strategic planning, and a thoughtful approach to capital allocation can significantly enhance the chances of sustained success in the entrepreneurial journey.
“Of how the others must see the faker
I’m much too fast to take that test
(Turn and face the stranger)
Don’t want to be a richer one
(Turn and face the stranger)
Just gonna have to be a different one
Time may change me”
Our interpretation of these lyrics suggests that numerous entrepreneurs and business owners, much like Bowie, achieve success by challenging or establishing their own norms. Success rarely arises from conventional thinking – however, navigating the transition from a rule-breaking start-up culture to a more structured business model can be taxing. As success grows and managerial responsibilities increase, there is often a necessary evolution and time may change you. This transformation might prompt a revaluation of personal identity, as the corporate phase takes precedence, potentially becoming a motive for a sale and exit – especially when considering private equity (the ‘suits’) involvement. Astute entrepreneurs acknowledge that the suits excel at organisation, bringing targeted capital firepower to facilitate scaling while mitigating risk for sellers with cash in the bank from a majority exit.
“But I can’t trace time
I watch the ripples change their size
But never leave the stream
Of warm impermanence
So the days float through my eyes
But still the days seem the same”
A parallel to the lyrics here is that your shareholder value plan is your compass, guiding strategic decisions in a world of constant change. Managing multiple influencers requires a nuanced approach and a delicate balance to safeguard your company. It is perhaps a heads-down, day-to-day grind – however, it is all too easy to miss the passing of time, as markets shift, and Capital Gains Tax rates fluctuate.
Choosing the right time to sell is not always when you want to, but when it is best for the company. The once beautiful cash flow projections, rich with illustrations of expected values, can be deceiving. Assumptions about the type of buyer, exit options, and multiples may veer from the plan, but sometimes for the better – a reflection of the unpredictability that mirrors both life and business. Being aware of the ‘ripples’ means that you are more likely to engage in early conversations with market makers and M&A advisors throughout your entrepreneurial journey. Proactive engagement ensures you are attuned to the changing landscape.
“Time may change me
But you can’t trace time
Strange fascination, fascinating me
Changes are taking the pace I’m going through”
Becoming a successful entrepreneur or business owner sets you apart as unique and fascinating. However, it is essential to remain humble and adaptable, recognising that life undergoes constant transformations. This is particularly evident as we approach potential exit opportunities. Changes, whether minor or profound, have the power to reshape your life entirely and this is something we recognise, cherish, and nurture at Avondale. While it may sound like a cliché, the essence lies not in just the numbers, but in the journey itself, finding fulfilment and enjoyment along the way.
As M&A advisors, we have a crucial role in recognising that our clients’ lives are evolving, driven by their aspirations. A common misconception amongst many M&A advisers is the assumption that their clients’ goals and objectives remain static – this is not true as it is imperative to keep reviewing them. Maintaining curiosity is paramount and we understand the significance of ongoing planning. By sharing stories about instances where others’ plans went astray or overshot, the valuable lessons gleaned from those experiences underpin the necessity for continuous assessment. This approach helps our clients to appreciate the dynamic nature of M&A strategy and the importance of changes.
Bowie’s understanding extended beyond music. He was an early internet pioneer establishing Bowie Net, an internet service provider in 1998. An owner and entrepreneur, sadly taken from us too young. In “Changes” we hope the lyrics provide a powerful soundtrack to the entrepreneurial journey and or perhaps to your journey. It echoes the call to evolve, innovate, and confront the transformative nature of the business but also for us, as business owners and leaders, to think about the context of change when pondering exit options. Just as Bowie navigated the shifting currents of the music industry, entrepreneurs can draw inspiration from the song’s message when shaping their ventures and considering exit options in a world in flux.
If you enjoy our musical comparisons to the entrepreneurial journey, please see Avondale’s “Sunscreen” article.
If you are interested in “change” Contact Avondale Corporate
Avondale is a leading business advisor that helps ambitious owners buy or sell companies, secure investments, grow their businesses and enhance shareholder value. If you are thinking about when to sell your business or looking for investment and would like further information on how we can help, please call us for an exploratory discussion without obligation at +44 (0)20 7788 8250 or email us at email@example.com for further information.