What are the key success factors for taking the business forward after an MBO?

I was recently interviewed by Michelle Rodger of the Scotland on Sunday about my thoughts and experience of management buy-outs (MBO’s).  Over the last decade, I have been involved in both leading and advising on a number of MBO’s and /or management buy-in’s (MBI’s).  The most significant of which was the MBO (in 2003) of The RGIT Montrose Group, a leading provider of HSE & specialist training solutions to the international Oil & Gas Industry.  One of the questions Michelle asked was, “What are the key success factors for taking the business forward after an MBO?”

I believe that the key success factors for a MBO are largely the same for any other entrepreneurial opportunity.  These are:

• a clear vision and deliverable plan.
• belief, passion, drive and determination amongst the MBO Team.
• clear and visible leadership.
• an ability to communicate the vision and compel others to follow.
• having a clear plan but being prepared to shape as you go and /or circumstances dictate.
• being ruthless with costs and “passengers” - cutting deeper and then building back to give yourself a chance at the start.
• rapid and significant improvement of processes, procedures, systems and management information.
• ruthless cash management - "every pound is a prisoner" and “Cash is King"
• pay down loans as quickly as possible to give yourselves head room.
• prepare a 100 day plan and address all the key issues quickly to provide a stable platform for future growth.  You need to be ruthless & very focused.
• get complete control of the business. Stir it up and make it clear to all that things have changed and a new regime is in place.
• tighten authorities and develop a new commercial culture where "every pound is seen as a prisoner".
• build the best team around you and ensure that they are totally aligned in every sense!
• execution, execution, execution and a clear focus on the delivery of results.
• develop good relationships with your funding partners ensuring clear, early and open communications.
• get energy and enthusiasm into the whole team and get them behind the MBO team and plan. Make sure they all know what's in it for them!
• constant and consistent communication of progress to all stakeholders.
• lastly be prepared for a lot of hard work, difficult choices, sacrifices and a lot of "blood, sweat & tears".

Murray Strachan

Murray works with executives, funders and shareholders to recover & create value!  You can contact Murray via his website www.murraystrachan.co.uk or follow him on twitter @murraystrachan

The Benefits of a Management Buyout (MBO)

I was recently interviewed by Michelle Rodger of the Scotland on Sunday about my thoughts and experiences of management buy-outs (MBO’s).  Over the last decade, I have been involved in both leading and advising on a number of MBO’s and /or management buy-in’s (MBI’s).  The most significant of which was the MBO (in 2003) of The RGIT Montrose Group, a leading provider of HSE & specialist training solutions to the international Oil & Gas Industry.

One of the questions Michelle asked was, “What did I think the benefits of a MBO were over other entrepreneurial opportunities?”  My answers to this question were:

• The good thing about an MBO compared to many other entrepreneurial opportunities is the fact that there is an existing business with trade, customers, contracts, resources, IP etc.  It's not a standing start!

• You should also know the company / business well including the strengths, weaknesses, opportunities and threats.

• You will know the staff, customers, suppliers, bank and other stakeholders and hopefully they will know you and be prepared to back you!

• You will hopefully know where the skeletons are, where you can make cuts, change things and make improvements.

• A MBO provides continuity to the staff and market.

• An MBO also provides (some of) the Management Team with job security. If your employer sold to an external party the new owners may take the decision to replace management with their own team.

• A MBO provides Management, and potentially some or all of the employees, with an opportunity to own the company they work for, and creates the opportunity for personal capital growth.

A copy of Michelle’s article can be found by clicking the link - When you like the company so much that you buy it   

Another of the questions, “What are the key success factors for taking the business forward after an MBO?”, will be covered in a subsequent blog.

Murray Strachan

Murray works with executives, funders and shareholders to recover & create value!  You can contact Murray via his website www.murraystrachan.co.uk or follow him on twitter @murraystrachan

So you want to be a successful Entrepreneur?

You've thought of a new product or business idea or you've spotted a gap in the market or you've found a business for sale!  You're fed up working for, and making money for others, and now want an opportunity to create your own future and determine the terms.  You've decided to go for it and strike out on your own!

Before you start though, you need to know that it’s not easy! If it was, everyone would be doing it.  There are few hard-and-fast rules in business, and you'll need to be prepared to do everything and anything to make your business a success.  The following anonymous quote best describes for me what it takes - "Entrepreneurship is living a few years of your life like most people won't, so that you can spend the rest of your life like most can't".

So! Are you prepared for the incredibly long hours, considerable hard work, the challenges, the big sacrifices, the stresses and strains that setting up and building your business can bring?  Are you a winner? Do you have the drive and determination to succeed or are you someone who gives up at the first hurdle? Do you have a compelling vision and the ability to persuade others of it's merits? Do you have the necessary knowledge, skills and experience?  Do you have the necessary seed capital with sufficient contingency just in case things don't go to plan, as they never do!

If the answers to these questions are yes, and you've got a great and/or unique idea; you keep focused; you invest sufficient time, effort, money and emotion into your business; and you have some luck, you'll have a real chance of success!  So, if you're bold enough, then I say go for it! If you don't, you may regret it later! “Some people dream of great accomplishments, while others stay awake and do them” (anonymous)

Murray Strachan

Murray works with executives, funders and shareholders to recover & create value!  You can contact Murray via his website www.murraystrachan.co.uk or follow him on twitter @murraystrachan