Episode Transcript
[00:00:00] Speaker A: Welcome to the Dealmaker Uncut podcast, where we speak to some of the UK's most exciting entrepreneurs and hear their investment journeys. We'll discuss the challenges, successes and lessons they've learned along the way with expert deals commentary from Jonathan Boyers, head of Alvarez and Marcel Corporate Finance, and me, Chris Maguire, executive editor at Business Cloud.
Welcome everyone to the latest episode of the Dealmaker Uncut podcast, powered by Alvarez and Marcel. My name is Chris McGuire and I'm the executive editor of Business Cloud. And as always, I'm joined by the deal maker himself, Jonathan Boyers. How are you, Jonathan?
[00:00:35] Speaker B: Hi, Chris. I'm very well, thank you.
[00:00:36] Speaker A: Yeah. Jonathan's been involved in deals totalling 5 billion pounds during his long and illustrious career and he's the managing director and head of Alvarez and Marcel's corporate finance practice in the uk. Now, before we introduce our very special guest, a quick shout out to WOTMedia, who produce the Dealmaker Uncock podcast. They really are the kings and queens of video creation and we couldn't do it without them. Now, this podcast really has got everyone talking and the format in the first part of the show. Today we're going to be interviewing our very special guest and Jonathan's going to be introducing them in the second. And in the second half, Jonathan will be leaning on his 35 years working in corporate finance to answer listener questions and general questions as well. So, Jonathan, let's put the listeners and the viewers out of their misery. Who are we speaking to today?
[00:01:22] Speaker B: Thanks, Chris. Well, today we're talking to Claire Roberts obe, who's the co founder and CEO of Kids Planet. Hi, Claire.
[00:01:31] Speaker C: Hi, Jonathan. Hi, Chris.
[00:01:32] Speaker A: Nice to meet you.
[00:01:34] Speaker B: So let's kick off, Claire, let's go back to the beginning and when you set up Kids Planet with your dad in 2008 and I think the locations were in Warrington and Widness, it strikes me there must be. It's a mission led business in lots of ways and I'd just be interested in what inspired you to set up a childcare business.
[00:01:58] Speaker C: So I'd worked in early years in the mid-90s. My dad had a previous nursery group and so I'd worked in the rooms as a summer job and all the rest of it. So I understood what a nursery operation looked like.
I was pregnant. I'd had a career post university in pharmaceutical sales and my head office was in Northern Ireland.
I was an area manager for the north of England. And I realised pretty quickly that unfortunately, traveling an awful lot and being in Northern Ireland every two weeks was not going to work with a brand new baby. So I sort of jokingly took voluntary redundancy without really meaning to do it, because I knew I was in a bit of an unmanageable situation with a baby at the time. He was five weeks old. But I knew I also had to work because we'd bought a house that, like most people, relied on two people contributing to the mortgage. So literally that weekend I was like, well, what am I going to do? Well, I haven't got a nursery sorted, which is part of the reason why I'm taking voluntary redundancy. And actually I live in a village where all the nurseries at the time opened at 8 and closed at 6, which was just totally unworkable for anyone who traveled. So it was a bit like, well, this must be a problem that lots of people are having. So, as you do, we decided to just totally stopped doing the world that I knew and buy a nursery and go and manage it with a nine month old baby.
[00:03:24] Speaker A: You've got three daughters, haven't you? So that was. That was your first.
[00:03:27] Speaker C: Yeah. So Izzy, my oldest daughter, will be 17 next week and she was nine months old in September 2008. So I had had a childcare qualification from the mid-90s, but I decided at the same time as well to go back to uni and to do my early years teacher course. So I did that as well. In the first year.
[00:03:47] Speaker A: You started with two nurseries. Just give us a sense of scale. How big. How big is Kids Planet now?
[00:03:53] Speaker C: So now Today we've got 220 nurseries and they're all across England and Wales.
[00:03:59] Speaker B: And how many kids is that? How many children we look after?
[00:04:01] Speaker C: Somewhere in the realms of about 25,000.
And we've got 6,000 colleagues who work for us across the business.
[00:04:08] Speaker B: Wow. So it's proper, proper big business now, isn't it?
[00:04:11] Speaker A: Because you're the third biggest nursery group in the UK now, aren't you?
[00:04:14] Speaker C: Yeah, that's right, yeah.
[00:04:16] Speaker B: Shall we talk about the. Your experience with sort of investment, private equity? I think BGF were your first investor.
It would be interesting just if you could talk about how that happened and how, you know, how you. What your relationship was like with them.
[00:04:32] Speaker C: Yeah. So we got to a size where, I think at the time we probably had about 15 nurseries and we'd bought a number of sites that we were going to develop and build nurseries on. But like all things, using our own capital was taking a long time to do. And when you looked at our business plan, it was going to take us four years to build all the things we wanted to do.
My dad and I founded the business together and he'd put a lot of his own personal money into it and people kept suggesting to us that we should talk to BGF because they let you get on with running your own business and didn't interfere too much. And we're both quite strong minded, so we thought that seemed quite a good match for us. Quite light touch, Quite light touch and also very much investing in the entrepreneur and what their sort of goals were. So we started having a conversation with them in May 2016 and by the beginning of August 2016 they'd invested. We had 16 nurseries by the time they invested. And truthfully it did change things because obviously you had a load of different people who were coming to your board meeting each month and people who asked you a lot of questions about things, whereas normally you just talk to each other and cracked on.
But actually it was probably the right thing to do then and it made us probably be a bit more formal. We already had an external FD who sat on our board. My sister was. Had joined the business in 2013, so she was on our board as well. But it was a really good introduction for us of how to operate with investors in a business.
It was funny in some ways to start with because my dad and I would sometimes argue or debate things and take ages to make decisions. And there was one thing that happened quite quickly where I wanted a new system in the business and BGF just said, oh, if Claire thinks it's a good idea, let's do it. And I could see my dad looking slightly irritated by that approach and we'd agreed to do it straight away. So I think, I think they were good at enabling us to push through and do things that enabled us to have a platform for growth.
[00:06:45] Speaker B: I think that's what you've just described is one of the things I was really interested in is obviously working with your dad. There'll be a whole lot of people who are in family businesses having to deal with that dynamic. So I am really interested in that and then to bring an investor in into that, that's just a really interesting.
[00:07:01] Speaker C: So I'm the oldest of four children, my sister is the youngest and we've got two brothers in the middle who aren't involved in the business. My sister and I get on really well probably because being 10 years older, she's always been used to being bossed around by me and we always joke and say that Lucy's the perfect child that came along, we all treated her differently to how everyone else got treated. My dad and I are very similar.
We both say what we think and probably are too honest at times.
And at first, when we started the business, I think the rest of our family thought it was going to be a disaster because we do argue and like, we don't like people. Imagine families rock up to board meetings with investors with their own secret agenda. Sometimes my dad will say things like, let's be nice to each other today before the meeting. And I think it's more. We just.
We get. We both probably get a lot from challenging each other and moving the business forward and that's how we've been successful today. But I think it's one of those things that I try now to not talk about work too much when we're all together as a family. There's 21 of us in my extended family now. And actually, for my own kids, whilst they're interested, at times it's probably pretty boring hearing your dad and so your mum, your granddad and your auntie talking about work. But the thing is, though, truthfully is there are times we have to talk about work. Sometimes we're on family holidays and whilst most things have gone well, there are times where you've got to do work when you're on holiday and it. It's a bit like you've got to have the rough with the smooth, really, with all these things.
[00:08:36] Speaker B: Yeah, this. There's an interesting. We'll come back to it. There's an interesting question about succession and how that will work and as time goes by, because obviously there will be change eventually your dad will. We'll want to step back, but let's come back to that because I think it would be.
It would be interesting just to see how your progression from. You worked with the BGF and you built the business up really well.
Can you just talk. You sold the stake in the business when BGF were ready to exit to Fremont Capital. It would just be good if you could just chat a bit about that and how that happened.
[00:09:07] Speaker C: So we've got to the point where, coming out of COVID well, just before COVID we'd done the acquisition of Kids Allowed, and six weeks later the world was closing down and everyone was being sent home. So Jenny had great timing.
[00:09:21] Speaker A: I always thought that deal that you did with Jenny Johnson, who I know very, very well as well, I think she did the deal in January and then the world stopped in February, didn't it?
[00:09:30] Speaker C: I mean, so Jenny and I, Jenny and I have been friends for a long time and Jenny used to joke when we were out and say, I'm going to retire and Claire's going to enable me to retire. And many, many, many a true word is said in jest because that's what happened. But her timing was great for her because literally we were trying to integrate kids allowed into the business. And then it was like, right, everyone go home. We're only open for 8% of the children. But we'd got to 52 nurseries. Then the world obviously went to sleep for a bit and people didn't know what to do. I think what happened in our sector in particular was it was very difficult, actually. We were open to everyone by June 2020. So whereas most people were still working at home and not doing things, we were out and open and looking after everyone's children because everyone realized after two months you couldn't really. Teams calls were funny to start with, with little babies sat on people's knees, but then you were sort of looking at people thinking, can you actually do some work? So everyone had started to send the children back. So I think for a lot of people in our sector, that probably pushed them over the ed and edged and made them look at other options. As we came out of COVID really, and you could see there was a tsunami of transactions sort of coming to market. We'd had deals that we'd put on pause because we didn't know how we were going to value the businesses really, in order to complete. But coming into sort of Christmas of 2020 and the start of 2021, it was evident that if you didn't suddenly have really deep pockets to grow, other groups were coming in who were going to do that and you were going to miss the boat, really.
The other thing as well is from a personal point of view, I got divorced and so I had to make some financial arrangements for myself personally, and I knew that I had to do that at some point. And it all tied in really with what was the right time for the business and what. What we wanted to do moving forward.
[00:11:24] Speaker B: Okay. And so we met actually at the time when the BGF were thinking of coming out and you were looking at doing that deal.
But what I didn't predict was that the new investor would be Freman Capital. So how's that gone? And you talked about BGF being light touch.
How's it going now with your new investor?
[00:11:44] Speaker C: So they've been invested now it'll be three years, which seems to have gone ridiculously quick. It is different and, but I think we'd got to the point where somewhere during 2021, as well as completing on a transaction we'd gone from 52 to 82 nurseries. And so we were at a point where Covid had helped us really get ourselves in order with infrastructure. But in order to grow for that next level we needed investors who were going to be more hands on and more involved.
I. This is the first business I've ever run, so I only know what I know and I learn along the way. So actually having people who could come in and look at the infrastructure and help support and help us put key people in roles to protect the business to grow was really important now to start with. Yeah, it is, it is slightly awkward when people come in and start telling you things, but actually you've got two choices. You either take it for what it is and recognize the value that they're going to add and use that and move on, or you don't. And obviously that's what, that's what we chose to do. We'd already recognized that we needed to put some key roles in and had done that in 2021. But I think when I sort of look round and think there was there would I, I used to do every job at one point. Whereas thank God there's other people who now have key roles and are leading on certain sort of strategic arms of the business which enables us to carry on with the growth.
[00:13:14] Speaker A: Because your business is a family run business but people don't nurse family owned business because you've got a different surname to your dad, to your sister. Yeah. And I suppose there's a question for both of you really, but when you're dealing with a family run business, are there any red flags? Is it more difficult if you're doing investment, if you're doing an exit, whatever it is, does being a family run business make it any easier or is it more tricky?
[00:13:39] Speaker C: I don't know, is that for me or for.
[00:13:40] Speaker A: Well, for either. I mean I'm interested because you've dealt with a lot of family firms as well, haven't you?
[00:13:45] Speaker B: So I mean I've dealt with lots of family businesses and sometimes the family dynamic needs to end and it's time that succession was planned up. Obviously others go on for generations.
I'm really like I say the thing I was really interested with your situation was just the dynamic between your dad and incoming investors.
So you know, I just think it's. That's a really interesting dynamic. Some people really struggle with private equity. And particularly entrepreneurs. And it strikes me that you're entrepreneurs who are a family, so you've got both aspects.
[00:14:23] Speaker C: So my dad is an accountant by profession but has had numerous businesses over the years. So he's, he's a natural entrepreneur. I think at times it, it can be irritating when people are more cautious or have different views, but actually as you get bigger, you do have to be more cautious and probably what it does put in place is more checks and holding you more accountable.
I think what's made our success though at times has been that we are entrepreneurial. Like if the other two larger nursery groups were part of sort of medium sized groups merging together through acquisition, whereas we've done a lot of acquisitions, be it single sites, be it small groups. And actually that entrepreneurial element is partly what keeps driving you on to keep doing it.
I think it's hard having people come into your business who obviously have a large ownership of it. But I think we have adapted and, and for my dad it must be miles hard. Obviously he's a lot older than I am and he set up his own accountancy practice at 24. So he's always said he's not been used to anyone telling him what to do. But I think you actually recognize the value and you're all in it with a shared goal of first of all growing the business and making sure it's success, but making sure that the values and the culture that you have in the business doesn't get lost. That for me has been the most important part in the journey. There's nothing different in what we did 16 years ago from what the important factors were of delivering high quality childcare and giving people the right tools and resources to do that in the best way. And I think that's important because this is not like going in a shop, this is buying a service for people's most treasured possessions. And I think that's why it's really important as well for private equity to have someone as a founder and a CEO who gets that cares and challenges them back.
[00:16:25] Speaker B: Because they must be very aware of that when it comes to board meetings and things like that. Because like you say, it's, it is people's mo. The most important thing in people's lives that you're looking after. And some, I bet some private equity houses wouldn't, wouldn't want to get involved in that because they'd be very.
[00:16:41] Speaker C: Yeah, the people who would see it as a high risk or the fact that you're employing so many people as being a risk. But they are very much invested and they've really enabled us to carry on for us, every acquisition that we make. I buying nurseries. It sounds very flippant this, but it's a bit like buying a house. You think it looks really nice and then it becomes yours and you want it to look the way your other nurseries look. So we put a lot of investment into our nurses because we're looking after a lot of children and staff need to be trained at the highest level and that is really important that we don't compromise on that because if we compromise on that, we shouldn't be growing.
[00:17:18] Speaker B: Yeah. Can you tell me when. When you go out to talk to people, you know you're talking to quite a lot, relatively small businesses in the nurseries. Why would a nursery business want to sell to you?
[00:17:32] Speaker C: So there's a couple of reasons. So a nursery operator who's exiting. Typically people who are exiting fall somewhere between 50 and 70 and it's because they've often set up nurseries like I did, when they needed their own childcare solutions.
And obviously lots of things change all the time in regulated sectors. And I think people get a bit to the point where they've had enough and another thing happens and they think, oh, I want to get out. So why would they sell to us? I suppose we are an easier option in terms of being able to sell it to the teams that they're leaving within the business in the fact that we are a family operated nursery group, which sounds a bit like. I hate the word chain when anyone uses it. It makes my sort of. It makes my sort of ears prick up. I always call us a group, I always call as a family of nurseries because I think that's really important and someone wants to know what the cultures and values are of in a business and we make sure that we tell them that. But I suppose what we give is security. We give that ability to make the team see that we are going to invest in them because they're the most important resource in any nursery, but also that we give them the opportunity, if they want to, to grow their career. For me, I think one of the things that's lost in this sector a lot is that people don't see it as a profession. And I think there's. We've got so many amazing examples of people who left school at maybe 16 with not a lot of qualifications who are actually, they've got really big jobs now. But that's because we've created a structure where they can grow, they can Progress. They can do lots of different things and I think that's a really important thing as well for somebody.
[00:19:12] Speaker B: Do people normally leave the business when they sell to you or do they carry on running it? And do they. Do they invest in your business?
[00:19:19] Speaker C: So most people who are the owners leave. They may retain the property and we may take the property on as a lease. That's what some people choose to do, but it doesn't really matter to us which way we're doing it. Occasionally we've had people who are daughters or sons of owners who are in the business that have stayed and quite a lot of them have stayed quite a long time and they've liked the fact that it's then.
Working in a highly regulated sector is very lonely and quite daunting at times.
[00:19:51] Speaker A: So.
[00:19:51] Speaker C: So when you join us, I always joke and say, you should never feel alone. There's so many people you can ask for advice and support that I think that's really important to people as well, that I think sometimes people get to the point where they think so many things happen all the time. I've not been trained to do this.
[00:20:06] Speaker A: Can I ask a bit about your style, Claire, which is quite interesting. I spoke to a couple of people, spoke to a couple of your friends, basically. Okay.
And sort of personality you are. You just come back from Cambodia, you've gone with the EY foundation, went with Stephen Church from EY, among others.
Your business now is 25,000 children, 6,000 colleagues, ish 220 sites, and yet every Monday morning you will take part in a call with all of your directors to discuss any accident reports and complaints. So you feel the need to be that close to the front line of the business?
[00:20:46] Speaker C: Yeah. So I think that we all share in the learning. That call takes about an hour and a half every Monday, but it's in all our diaries and for me, it's the most important call that we do every single week.
I don't take it lightly that what I am doing is a really important, privileged job of looking after people's children and giving an hour and a half a week to sit on a call with my sister, who's also probably a better expert than I am now at early years with her role. We think it's really important that we know what's happening and we challenge people, but they all sit on it to learn what's happening in each other. So we have childcare directors who manage roughly 40 nurseries, but they hear what's going on in other people's areas because actually that's how you learn. You learn from learning with each situation.
We also have to report quite a lot of things to Ofsted and it's really important that those things are all captured in the right way.
And they have a call, a pre call before that meeting on a Monday to make sure they've got all the things that they need. But I think you have to be really structured like that. And if I thought that wasn't important, I shouldn't be doing the job that I'm doing.
[00:22:02] Speaker B: So when you're bringing all these people into the business, that takes a bit of managing. Can you just. You must have got a fairly well trodden path for integration. No. Can you just talk. A lot of people who are acquiring businesses are really worried about integration.
[00:22:18] Speaker C: Yeah. So we obviously have a plan that takes somewhere between 20 weeks and 30 weeks to embed a nursery into our business.
It really is dependent on the nursery that you're acquiring. Some nurseries that we acquire, if they're part of a group or already, often that's slightly easier in the fact that they'll be used to reporting to people at head office and things like that. For some people who it might have been that the owner was their direct report, they'll have used to them being there every day. So we've got to then integrate them into the culture of having an area manager and what their responsibility is versus what the area managers is. But we have a weekly integration call where we go through at the start of all the important things like safeguarding policies, accident policies, those kind of the things that are the givens that if you don't get right on day one, you can have a major problem. But then from that we have 135 policies. If we just dumped on an acquisition, 135 policies, there's no embedding in it. So we go through, like, a process of where this works, how it's embedded into the business, who all these people are now that are going to support them. That's the thing that I think people get. They suddenly feel like a sense of relief in the fact that there's so many people in our head office that will take some of the responsibility and the burden off them when they're smaller. Because people go into nurseries and working in nurseries because they love children and they like making a difference. They don't go in to do payroll and to do invoicing and all these really awful things that you end up doing in a small nursery business. And so we try and remove the burden and to make their lives easier.
[00:24:01] Speaker A: Yeah, we've got time. We've got time for about three more questions, but I'll ask one and then I'll hand over to Jonathan.
And Jonathan might have a view on this as well, actually, is that sometimes when I see companies fail, it's because the leaders of the company, the CEOs, take their eye off the ball operationally. And that's why I was really interested by the fact that you really earmark that one and a half hours every Friday, every morning, Monday morning, it's the most important meeting of the. Of the, you know, of your week.
You're somebody who sees the strategic vision, but also the. I use the word minutiae, if you know what I mean, the detail that's really important to you. And is that something when companies go wrong, Jonathan, is that sometimes because maybe they've taken a majority investment and they take their eye off the ball day to day.
[00:24:47] Speaker B: I mean, I think the issue you're alluding to is scale. And I think what I've heard you say, Claire, is that as you scaled up, you brought in area managers and so that you can keep doing the strategic stuff. And I imagine that when you're buying businesses, they want to talk to you as well. But I think it's about managing the structure so that you bring a second tier of people into the business.
[00:25:09] Speaker C: Yeah, our structure. So I know that my sister joined the business when we got eight nurseries, and that's because I know I couldn't really talk to more than eight people. It was getting to the point where probably I was unable to run the business and deal with eight nurses at the same time. And we've worked a bit on that same rule all the way along. Our area managers have roughly eight nurseries. They then report to child care directors who will have no more than eight people. It's just done in a way that you've got to make sure that people feel they've got someone to go to with dedicated time, time.
And I think the infrastructure is what enables us to grow. We're always like, we have maps in both our offices. We're looking at where our team live, we're looking at how we make sure that they've got the right nurseries for where they live so they're not traveling too much and how they're supported best. But that reflection on growth happens before we grow. So we don't sit there and go, suddenly we've just got another 15 nurses. What we're going to do about that already got the plan in place as they're becoming part of the business. And we've got area managers at the moment with capacity around geographical locations that we want to grow in. So I think scale, if you're going to grow a business and you want to scale, don't do it unless you've got the right infrastructure.
[00:26:30] Speaker B: So my wife, Ruth Percival, is the CEO of a buy and build project. It's a company called Contolo and they're acquiring in the. The built environment sector. One of the things she's obviously, she's often mindful is that she's a woman CEO. And actually there aren't that, you know, there's still not that many female CEOs around. I just wondered if he could share some thoughts about how it feels, you know, being a female CEO of a business that's achieved such scale as well.
[00:27:01] Speaker C: So I think, I think probably that's true. I think certainly when I started going to networking events 12, 13 years ago, there were very few females at them. I think there are more female CEOs coming in.
I think as a mum to three daughters, I think it's really important to be a role model. I also think I never. I always believed that I could do anything and I've had that a bit in my life all the way growing up. I don't really know why I was sort of quite average at school and did okay, but I always just thought I had something in me that liked working hard and wanted to continue to do that. Is that. I think, I think if you look at nursery groups, a lot of nursery groups typically are female CEOs, so it's probably a peculiar sector because we have the, we have the different makeup to the rest of the world in the fact we've got way more females and not enough men.
But I think it's important, I think now for girls growing up today, there should be no reason why you think being a female is a negative. I think being a female at times is an advantage because you sit around a lot of the time with men who don't expect females to come out and be quite as direct as they might be. And actually females are quite good at multitasking. I have to sort out three children as well as running a large business, which I think that helps as well.
[00:28:21] Speaker B: Yeah. I often say when we're talking about people in our corporate finance team, we've got 44% of our team at the moment are female. And when I talk to them about progression and stuff like that, and people are worried about if I go on maternity leave. Will it hold back my career? And I'll often say to people, if you think about the experience you get from bringing a new person into the world and then looking after them for the first few years, for the first few months, come back nine months later after doing that and think that that's not as good experience as completing three disposal mandates.
[00:28:54] Speaker C: Yeah. And as they get older, you become a logistics manager, a transport organizer and all kinds of other skills that you didn't imagine that you'd have to have.
[00:29:02] Speaker B: The skills that mums get in that period is much, much. It's fantastic.
[00:29:07] Speaker A: I'm just going to say I'm mindful of time.
[00:29:10] Speaker B: I've got one more question. I've got one more question, which is just the thing with point we made earlier. And I don't expect you to talk about the exit of the business, but I. I am interested in how a lot of businesses involving families really struggle to think about how to handle succession. And I can see there'll be a point at which your dad will probably want to step back. And I just wondered if you've had discussions about that and what that will mean. You've got a private equity investor as well.
[00:29:40] Speaker C: So I think for my dad, my dad is involved day to day as much as he wants to be.
He likes coming to board meetings and for him, I get his money's invested in a business that he understands and knows. I'm not sure that my dad will necessarily exit when there's another. When there's another investment. I think he adds value and actually holds people a bit accountable at times when things sounds like the nonsense. And so as long as the board wants him on it, I'm sure he'll still turn up. But I think in terms of planning for the future, I enjoy what I'm doing and I get a real pleasure out of growing the business and seeing people develop. I've got no desire. I do all the things I want to do. Anyway, my kids are still at senior school, my youngest is only in year seven. So I've got a long time of being stuck in the technicalities of children in schools and all the rest of it. So why, why, why stop doing what I enjoy?
[00:30:45] Speaker B: Maybe. Maybe you'll never exit either.
[00:30:50] Speaker A: I've got a feeling. I've got a feeling you're a lot more like your dad. You know, I think your dad's 72 now, isn't he?
[00:30:55] Speaker C: Yeah.
[00:30:56] Speaker A: So in 28 years he'd be 100 and you'd be whatever. Okay. I wonder how big your company will be. Then we're gonna go for a quick break and afterwards we're gonna discuss this interview, Jonathan. And then we're gonna be answering.
[00:31:07] Speaker B: Thanks for that, Claire.
[00:31:24] Speaker A: Welcome back to the second half of the Dealmaker Uncut podcast with myself. Chris McBride and Jonathan Boyes just interviewed Claire Roberts OBE. We should have asked her about her OBE. Shouldn't we have kids planning? What did you think of her?
[00:31:36] Speaker B: So I really enjoyed that interview. I'm really impressed with the way that business has developed. Obviously, Claire's got a great attitude to the business.
The business has come from wanting to do something that is mission driven, but it's evolved into a really strong, growing business. So like I said, I like the fact that it's a family business that's taken on private equity and use that private equity to develop growth. But buying businesses like that and bolting them all in and then keeping the offering of the business developing and growing is not an easy thing to do.
So I'm really impressed with that.
[00:32:18] Speaker A: Yeah, I thought the lessons there, it doesn't have to be a nursery business, but you made the point. Growing pains. And if you are going to grow a business and you are acquisitive as well, you've got to make sure you've got the infrastructure in place to grow. Otherwise at some point you're going to hit a brick wall. And I've got two daughters. I know you've got three children. And you know the idea of feeling you've got responsibility for 25,000 children and everything that goes along with it. Staff members as well. I don't know how she looks so chill and relax.
Maybe it's because she's got a good network of friends around her as well.
[00:32:52] Speaker B: An impressive lady.
[00:32:53] Speaker A: She's very, very impressive. This next section is called Ask Jonathan as the clue suggests, as the name suggests. The clue is in the name. Listeners or anybody, I've got one can ask Jonathan any question they want. So I'll start off. Jonathan, you wrote a handy 16 point plan recently to selling your business. I found it fascinating and the podcast isn't long enough for me to ask you to go through the entire 16 point plan. But what are the key considerations for our listeners and our viewers out there? They're thinking about selling their business. What would you say the key considerations are?
[00:33:30] Speaker B: So I suppose when I talk to people, obviously I spend most of my time talking to people who are thinking of selling their businesses. And one of the things I ask them to think about is what it will be like when they've sold the business. So for them personally, what are they going to do? Are they planning on staying with the business? Are they going to leave? If they're leaving, what are they going to do? A remarkable number of people really struggle with that. But also what will the business look like and what will is it prepared through a management team that can manage the business going forward and is it ready for the sale process? So these days, deals, particularly the due diligence bit of a deal and much more metrics driven. So the due diligence industry has developed techniques and software for tearing apart numbers that businesses really need to be able to produce really high caliber management information and metrics.
But most of the issues are around is the team ready and other people ready and customer relationships and all that sort of thing.
But it's all about are you ready?
[00:34:45] Speaker A: I do a bit of PR consultancy and when companies call me in and they say, chris, can we have a chat? And we need to do some positive pr, then there's nearly always a sale or an investment planned and they want to create some positive PR. One of the points you raised in your 16 was the importance of PR. How important is it?
[00:35:06] Speaker B: So it varies from business to business and sector to sector.
For some businesses, all that matters when you're selling it is that the right buyers understand what the business is about and in some sectors they know. In other cases you've often got a business that has been under the radar and it needs to raise profile. And so there is a role for pr. And quite often businesses will adopt a PR strategy and they run up to a sale. They might do the Sunday Times interview or they, they might put some stuff in trade magazines. The last set of accounts is often last set of attendants. Looks a lot more detailed than previous sets have.
But I think people forget that almost everything you put on social media or stories that appear on the Internet are part of the information memorandum. So when buyers look at a business they'll obviously do a quick electronic search and if there was an article 18 months ago, that's part of the information that people use to assess a business. So I think PR's become more important, but it's broader and it's a bit harder to manage than it used to be.
[00:36:22] Speaker A: And final question, Jonathan. We're looking at M and A activity. I'm looking at a sample size and a geographical size which was the North west in Q3 and it dropped 7%. Rally has dropped 22%. That's according to exhibition. When you look into your Crystal ball. What do you see for 2025 and beyond?
[00:36:42] Speaker B: So that refers to Q3, obviously. Q4 includes the budget period. So the October budget, I think you'll find there's a lot of deals completed in October.
[00:36:57] Speaker A: Claire got a few of them.
[00:36:59] Speaker B: Deal volumes will have increased in October. There's still quite a lot of deals that missed the deadline. It was a bit tight from when the budget was announced to doing it. So there's still quite a lot of deals that people are working on that will happen over the next few weeks up to Christmas.
But we're feeling pretty confident. I'm feeling pretty confident about next year. There's still loads of private equity money that does really need to be invested. Interest rates are coming down. There's been some mixed messages in the economy, but from the conversations we're having with people who've got businesses to sell and the way businesses are trading, we're confident that there'll be an increase in deal volumes next year. The extra national insurance cost is meaning that some businesses are having to reassess what their current year earnings will look like. But broadly, we're expecting a decent year next year.
[00:37:56] Speaker A: Yeah. And it's also worth saying we're recording this podcast at the end of 2024, so by the time this one comes out, it could be the start of 2025. But you're pretty confident, which is. Which is good to hear and I wouldn't have expected anything else Then. That completes the latest episode of the podcast, the Deal Maker Uncut. If you've got any questions you want to ask Jonathan, please send them through normal channels. Contact us on LinkedIn or via the Show Notes as well. Massive thank you as always to Avros and Marcel for powering this podcast and now friends at WOTMedia who make it possible. And thank you as always to you, Jonathan.
[00:38:34] Speaker B: Thanks, Chris.
[00:38:35] Speaker A: It seems to come around really quickly. Don't forget to subscribe to the podcast, tell your friends and family and follow us on social media. So tell everybody. The podcast to follow is the Dealmaker Uncut Podcast.
Thank you for tuning in to the Dealmaker Uncut podcast. We hope you enjoyed today's conversation and found it insightful. If you like what you heard, be sure to subscribe. Subscribe and tell your friends. We'll catch you in the next episode of the Dealmaker Uncut Podcast.
