LESSONS LEARNT FROM STARTING, GROWING AND SELLING A SUCCESSFUL ENGINEERING BUSINESS

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Over the last 25 years I have had the privilege and opportunity to start, build and ultimately sell two Engineering based companies. As an Engineer myself and coming from a technical background I believe Engineers have all the skills necessary to become natural entrepreneurs, for centuries Engineers have led society to industrialisation and wealth creation.

The two businesses started in very different ways; the first started as Management Buyout of a small company that was owned by large multinational, which became non-strategic to the main business, which was used as the basis to develop a larger more extensive business in a new market. The other was started in a more structured and measured way, building on the experiences learnt on the first, but financed through is what often termed as a ‘Corporate Venture’; a method of finance whereby a large corporate provides the funding to one, or a group, of entrepreneurs who have the drive, vision and skills to create a new business based on their ideas. This process is also referred to ‘Intrapreneurship’; where a large company supports the development of a new business, possibly driven by ideas from people employed within that company. This is a tremendously exciting, and much lower risk option, compared to going it alone or getting finance from traditional venture capital sources, which is what we did in our first venture. I have written a lot more on this aspect of financing and starting a business in other articles.

As Engineers, and indeed other professionals, we are generally very good at managing our careers, building up the experience on our CVs and taking every opportunity to move forward with the organisation we work for, and through that, we end up with very stimulating and satisfying careers, and make great contributions to society through their work. These career paths are noble and are the right path for many Engineers and professionals. We need good people to be at the top of our great companies, if we are to maintain our competitive position on the world stage. We also need the best Teachers, Lecturers and Professors to inspire and teach the next generation of Engineers.

However, for many people this may not be the best path for them; many of us may seek fulfilment in other ways and there is an underlying desire to create something ourselves; that was certainly the case with myself. As human beings we find it easy, to take the easy path, we dream, but then everyday life takes over and we stop imagining what could be and we end up following someone else’s agenda. The problem is often, you have the desire, but you may not, for some time, see where, when or how the opportunity to create your business will come, but if you have that fundamental desire it will, because your mind will be tuned into the opportunities and you will find a way of making it a reality.

When you start a business, particularly for the first time, you start on a journey of excitement, challenge and insecurity. At the start I had no particular skills that, in a traditional sense, would equip me well for starting and running a business, but looking back, that could have been an advantage; had I been aware of the things that could go wrong, I may not have even started the journey.

Although successful, the journey was by no means easy, there were many things that can and do catch you out, but as a shareholder manager, failure or giving up is not an option.

It was often the, not so obvious, that later became the most critical. We all know the theory, but in a growing company where resources are often scarce; timing and anticipation are everything.

The following topics are certainly not meant to be any sort of comprehensive background to the subject matter mentioned; there plenty of books, courses and latest management theories that cover these things in immense detail. However, the topics I have covered are an attempt to convey some of the “lessons learnt” from the experience of having “lived” the whole process, from securing venture capital start-up, achieving rapid growth (and downturns), to the eventual sale to a large multinational, and the subsequent continued growth of the business in that new environment. This aspect, covered in one of the topics, on post-acquisition merger and integration of your company into a buyer’s organisation, is something that is often ignored, but is so critical if both buyer and seller are to get the maximum possible value from the sale.

I am not saying that we got everything right, far from it, but hindsight is a wonderful thing and looking back it is easier to see what was critical and what was really adding value to company, as opposed to the many hours in the day spent running the day to day business.

I believe it is important wherever lessons are learn, that they are fed back, somehow, to those companies and people who are striving to achieve their own goals for themselves. Achieving your goals sometimes requires a little help.

SMEs are a major contributor to the economic success of the country; of an estimated 3.78 million business in the UK, less than half of one per cent fall into the larger corporation category, employing more than 500 people. However, in the business and financial community emphasis and advice appears to be focused predominantly on the large corporations. The performance of SMEs is easier to influence, they respond quicker to change and the benefits of improvement are felt far more immediately, not only by the shareholder managers, but also by UK economy.

I hope that you will enjoy reading some of the ‘discussion topics’, as I said they are not meant to be comprehensive, just some views on some areas that I believe to be relevant to a new and growing shareholder managed company.

If you have some comments on any of these matters, I would welcome the opportunity to hear from you, expand on any of the topics I have highlighted. Also if you have other similar experiences that you would like to share, please feel free to share via this site.

Good luck on your own journey.

See related posts: https://engineeringinsociety.wordpress.com/category/starting-growing-selling-a-business/


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