Ensuring continued success

Oct 17 2007 By Martin Hulls

GETTING into the Fastest 50 has become more difficult than ever as the North-East’s vibrant businesses do battle in what is an increasingly competitive marketplace.

Therefore, all the companies in this year’s list deserve our fullest congratulations at chalking up a notable achievement.

However, as they will all realise, the swift pace of change in today’s business world does not allow anyone to rest on their laurels. Not only will there be scores of companies looking to take their place in next year’s Fastest 50, there will be many more in the rest of the UK and across the world vying for their customers and clients.

In such a challenging environment, the ability to think and plan ahead is vital. What are the next steps which companies like those in our Fastest 50 need to take to ensure continued success in the future?

Growing organically is how many of the Fastest 50 class of 2007 have achieved their place on the list. Using your cash reserves is one way to finance such growth, but if you prefer not to eat into your capital or it has already been used up, securing external investment is a must.

Banks, venture capital firms, high net worth individuals and access to funds on the stock market are amongst the main sources of funding, but which is the right fit for your business?

How should a loan be structured to fit your cashflow?

Are you prepared to sign over part of your business to a venture capital firm? Such questions are vital. Growth by acquisition has become an increasingly popular route, particularly over the last few years, as businesses acquire competitors to boost their market share and take advantage of economies of scale.

Choosing the right target, negotiating the right price and planning for integration are vital for a successful acquisition. With £484m worth of deals concluded in 2006 alone, we have a proven track record of helping secure the best for our clients in this field.

On the other side of this coin, selling your business to a trade buyer – either to cash in on your hard work or to move into a new venture – also needs careful planning and advice to ensure you get the best deal.

Selling up to your existing management team is another option, but they may need advice on picking the best funder to finance the MBO and on the future structure of the company. Our long experience of trade sales and MBOs leaves us well placed to advise in such scenarios.

A stock market flotation is another option for companies looking to grow and to increase their profile. Becoming a plc opens up additional access to capital and allows companies to use shares to fund acquisitions.

Many growing companies choose to list on the Alternative Investment Market (AIM) of the London Stock Exchange. We have advised businesses including Romag, Tanfield Group and China Goldmines on their AIM flotations and now act for 21 of the North-East’s 40 plcs.

If you are serious about going for growth, give us a call and we will help you plan your next steps for success.

Martin Hulls is head of corporate finance at Ward Hadaway and can be contacted on (0191) 204 4125.