Before you can maximise the value of your business or plan for succession, you need to know where you stand today. That’s why a current state assessment is the essential first step in exit planning. In this week’s Exit Insights episode, Darryl Bates-Brownsword and Kevin Harrington explore what this really means and why it matters for every business owner.
A current state assessment isn’t about fixing everything overnight. It’s about identifying the risks that drag down your business valuation and the opportunities that make your company more attractive to buyers or successors.
What’s Covered in This Episode
- Financial readiness: How clean are your accounts? Are your revenues recurring or dependent on one-off sales? Is your debt manageable? Buyers want predictability and transparency.
- Operations and owner dependence: Can the business run without you? Strong systems, documented processes, and a capable leadership team all reduce risk.
- Growth and marketing: Is your client base too concentrated? Is your business model clear and scalable? A spread of customers and a clear strategy boost confidence.
- Risk management: From shareholder agreements to cybersecurity, the details matter. Missing contracts or weak protections can scare off buyers.
- Personal planning: Your exit isn’t just about the business – it’s about what happens next. Aligning your personal wealth plan with your company’s exit plan is vital.
Actionable Tips
- Start small: Focus first on cleaning up financial records.
- Build resilience: Reduce reliance on any single client, supplier, or team member.
- Share the load: Empower your leadership team and put KPIs in place.
- Protect value: Ensure shareholder agreements and contracts are signed, simple, and accessible.
Whether you’re planning to sell in two years or ten, this episode will help you understand where you are today – so you can build a business that’s attractive to buyers and ready for a smooth transition.
Transcription
Darryl Bates-Brownsword (00:41)
Welcome to the podcast that’s dedicated to helping business owners prepare their business for an exit or a transition so that you can maximize the value, professionalize the business. And then when you do find the exit, you exit on your terms. This is the Exit Insights podcast presented by Fabric Business Solutions. I’m Darrell Bates-Brownsword, your host and joined by my business partner, Kevin Harrington.
Welcome and thanks for joining me again today, Kevin.
Kevin Harrington (01:07)
Hi Daryl, it’s that time again. Let’s see where we go today.
Darryl Bates-Brownsword (01:11)
It is, it’s, actually one of the things I really enjoy doing every week is, is, ⁓ preparing for this podcast. And, and, it’s a way that I use to actually review my week. And I go, what are the big issues that have been occurring this week? What, what’s been going on? What have I been working on? What are the questions that I’ve been asked? What are the, what are the topics coming up when I’m talking to people out in the marketplace? So those are the hot topics which fuel.
the conversations that we have here.
Kevin Harrington (01:42)
That’s a good point. I hadn’t really thought of it that way before, but you’re dead right. We are dealing with contemporary issues that real businesses are sticking in front of us. And as such, we know it’s up to date in terms of what many people need to know about.
Darryl Bates-Brownsword (01:54)
Yeah.
Yeah. So the topic for today, since you asked is, is one that’s been coming up and it’s going, Hey, look, you guys have been talking about a current state assessment. You’ve always been talking for years of doing the podcasts around a starting point and getting really clear around what is the starting point of my business. You talk about a current state assessment. What is it exactly that you’re assessing? What are the questions you’re asking? What are some of the issues? So
Kevin Harrington (02:03)
Thank
Darryl Bates-Brownsword (02:28)
I thought it might be a good idea to explore some of the things and just go, what are the things we’re digging into? We’re having a look at the business. We’re coming and having a look at your business to identify the risk because we’ve talked about a valuation and the multiplier of the valuation is simply representing the risk to the future cashflow of the business. And therefore the more risks, the less someone wants to pay for it. So what are the risks we’re looking at? What are
the things, the issues that a buyer or potential buyer will identify or be looking for when they’re coming to have a look at your business. So the more of those we can eliminate before you explore any sort of transition, the more valuable your business is going to be and the easier it is going to be to create a transaction or find a buyer or a successor and eliminate any friction when that time comes, when you’re ready. And of course, there’s nothing stopping you from getting all of this done just so that you can fuel some growth for your business.
Kevin Harrington (03:29)
Yeah, I think it’s that you absolutely agree with everything you just said. I think it can get even more simplified than that. mean, you lot of people we’re talking to and now and in the recent past have been have been saying to us, what do I need to do? What’s the first thing I need to do and so forth. And
they’re asking us because they think we can help them. And of course, in most and many cases we can. I was at a cricket ground yesterday, and someone was having a private one-to-one lesson, ⁓ batting in the nets. And what did the cricket coach want to know first? Wanted to know when and where people have been playing, how long for, and then just threw some balls down just to get an early assessment of what the state of play was with that cricketer.
Were they spotting the ball coming? Were they standing correctly? Were they holding the bat properly? Were they following through? All those things. Yeah it was a current state assessment. And if you don’t have that, you are pretty much wasting your time. You’re either going to go back over old ground with people and say, well, you know, have both your feet on the ground before you start and so on.
Darryl Bates-Brownsword (04:29)
Just their current skills.
Kevin Harrington (04:48)
And cover things that people know, or you end up completely missing some things by assuming a business or a cricketer has reached a certain stage. So it’s important for everyone to know where they’re at. And I think this assessment issue has an extra and parallel benefit. know, we would use it and work through it with a client so we know exactly where we are. But answering these questions makes
Darryl Bates-Brownsword (04:55)
Yeah.
Kevin Harrington (05:17)
a cricketer if they’re in the net, or a business person, so much more self aware of what’s going on. And all of a sudden, they’re kind of going, yeah, okay, so I’m sensing an agenda is coming here. And these are things that matter. And so we even though we think the critical questions to ask are to form an assessment result. Actually, what we’re also doing is we’re corralling language together.
We’re starting to talk the same language and set a common agenda.
Darryl Bates-Brownsword (05:46)
That’s
an interesting point. Yeah. So we’re getting aligned on language and understanding of the starting point, aren’t we? Otherwise we do. We’ll go, you’ve been playing cricket for 10 years and we could assume that you’ve got a certain level of skill. ⁓ But let’s just test it and find out and see where you’re really at. And so we can see, you know, of all the skills you’ve got, you know, is your position right? Is your grip.
Kevin Harrington (06:06)
Yeah, exactly.
Darryl Bates-Brownsword (06:14)
You know, your biggest weakness to put, some time on first. What about your swing, your hand-eye coordination, ⁓ list of strokes that you can play? Are you good on the offside or the onside? That’s what a coach wants to know and just go, okay, so what are the things that we need to address first and quickly? ⁓ Or is it just an all-round increase?
Kevin Harrington (06:39)
Yeah, yeah. So there we go. That’s the,
I think we’ve set out the pitch for understanding what ⁓ needs to be covered around an assessment. And I guess what we ought to be doing now is sharing some of those key things that really matter. And the point here is we’re trying to look at it from everyone’s point of view, aren’t we? We want to know it because we need to understand how we can…
benefit a business owner. The business owner needs to know it so they know where they’re starting from. But also these questions actually are things that perhaps the people that the business might transition to one day, even through an MBO or employee ownership trust or an outright sale or whatever. It’s important for many people with this assessment.
Darryl Bates-Brownsword (07:37)
Absolutely. even if you’re just going, well, hang on a sec, how resilient is our business? How sustainable is it? And the thing that’s coming to my mind, even before we get into some of the areas of what we make an assessment of is we’ve talked about in one of our earlier podcasts about the need to rebuild all of your infrastructure every time you triple in size of your business growth.
When you get to a 300 grand in revenue, your business is totally different to what it looked like at 100 grand and you triple the size. then at 300 grand to a mil, again, you’ve tripled the size. Whatever you put in place in 300 will last you to about a mil. Whatever you put in place and rebuild at a mil will last you to about three and then 10. So, you know, depending on where you are, we want to know where you are in that stage, that cycle as well, because at some point you’re going to have a
I guess a chunk of investment required to rebuild some of your infrastructure. If you know it’s coming, you’ll intuitively be building it all the way up until the next step. But, you know, wherever you are in that cycle, we’ll need to make sure that the infrastructure is in place and ready to go as well. That’s a foundational element.
Kevin Harrington (08:55)
Yeah, that’s, and the point you’re making there is that the business is already evolving. When we meet people, the business is already transitioning on a daily, weekly, monthly, annual basis. And it’s important to understand some of those rhythms. And if you’ve just upgraded your CRM system, because you’ve got through that tripling moment, it’s probably not the biggest priority straight away, so long as it’s being used well.
it’s ready to go. So perhaps some of the focus is elsewhere and all these things start to build up a picture. It’s almost like the jigsaw piece is being put together and clarity starts to come and you can see the full picture.
Darryl Bates-Brownsword (09:35)
Yeah. Right. So let’s talk about the big one. The big one is always going to be the financial side of the business. How readily is your business financially? How what are the records you keep? ⁓ What is the pattern of the actual finances that the records show? How clean are your financials? Have you got your financial records messy? And ⁓ have you got all sorts of things that are out of place and not fully recorded and not transparent? Have you got things that shouldn’t really be in there or wouldn’t be in your
in your P &L that a new owner would have? ⁓ This could be, know, the owners are taking a low salary to be tax efficient. Adjustments can be made for that. Have there been one-off costs and they could be plant investments or just other reasons to have one-off costs that can be cleared out for normalizing your accounts? What are some of the things that you would look at in an assessment, Kevin, for going, okay, so I’m looking at the financials.
What am I looking for? What are the gaps? What are the gotchas?
Kevin Harrington (10:40)
So, okay, so the route I’m gonna take on this one is you talked about a valuation that’s been normalized, adjusted, and let’s, we can come back to that if we need to, but let’s assume that a validated valuation is there. There are, the other things we need to be looking at that really, really matter to us as business owners, to our clients as business owners and so on. It’s, we wanna know things like,
the quality of the revenue, not just how much the revenue is. So is there recurring revenue? You know, is there a nice proportion of future contracted or monthly renewable, annually renewable revenues that predictably come in? That makes a big difference. If it’s all conquest business, if we’re having to go out and fight for it every day, the business can collapse quite quickly.
Darryl Bates-Brownsword (11:09)
Yeah.
Kevin Harrington (11:32)
Whereas if it’s annually recurring revenue, we start to see a drop off of people renewing. If we see a drop off in one month, there’s 11 months of renewals perhaps to come. It’s an early indicator we can do things. So that’s one key area. Another big one for me is that businesses can sometimes appear beautifully well organized and very good valuations and stuff. But what about the debt structure?
Is it such that it actually is making the business vulnerable? So apparently at surface level, it’s a beautiful business, but it’s carrying historic debts of a level that puts the business at risk and reduces its flexibility. Those are a couple of the things that kind of spring to mind, the things that I would ask behind the valuation that we’re seeing, the validated valuation.
Darryl Bates-Brownsword (12:23)
Yeah. And looking at the revenue coming in and the contracts and the subscriptions, I’d be also looking at, okay, so what’s the lifetime, typical lifetime value of a client? How long do clients stay with you? How long, how much upselling do you do and cross-selling to clients? The lifetime value of a client, what’s that typical? And then who is responsible for getting that revenue into the business? So who’s doing all of the sales? Is it the owners? Is it the key person in the business?
Or have you got a team doing that, that you got a number of other people doing that? So is a big who question there as well.
Kevin Harrington (12:59)
Yeah, yeah. And through that, one of the questions that I guess we would regularly ask is, what does your KPI dashboard look like? And you know, what does
Darryl Bates-Brownsword (13:10)
Yeah, how are you keeping score?
How regularly are you tracking this?
Kevin Harrington (13:13)
Yeah, so it’s at a top level as the board of the business, what are your three KPIs, but then for each department or team within the business, what are their KPIs? Because their KPIs add up to becoming the total business. asking those questions and seeing how things attract quite often goes great, we’ve got that sorted. are exactly the soft and hard indicators that we need to be able to run our business.
and be warned about things that are gonna happen. And otherwise, if they’re not there, we kind of go, well, let’s, what could be put in place? Not everyone’s got everything ready for business exits and business growth. So that’s absolutely fine. So if a business has been successful, and doesn’t have a KPI dashboard, not a problem, is it? The business is successful, it’s gonna be even more successful with a KPI dashboard. So.
Darryl Bates-Brownsword (14:10)
Yeah,
and because some owners are out there just doing it intuitively, as you suggest, like how much are they ⁓ just knowing and subconsciously keeping track of certain metrics and a dashboard just puts that on the surface so that everyone is now aware of what they’re doing.
Kevin Harrington (14:29)
and you can hand over to someone when you go on holiday and say, keep a track on those numbers if it drops below that, this is what I would be checking. And then you’ll basically you’re preparing to transfer control and ⁓ leadership of a business and by sharing knowledge, you’re growing the future of the business.
Darryl Bates-Brownsword (14:50)
All righty. And the other area that I would consider when I’m doing an assessment of a business is not just the business, because we’re looking at the shareholder, the owners of the business as well. I go, I just want to check in with your personal financial planning. How’s that state of affairs? How are you set up? ⁓ If you exit the business now, how financially secure are you? Do you need to find more work? Have you got investments? Like, what are you going to be doing?
And as the owner of the business, have you got your personal financial wealth management set up? I wouldn’t be sorry. I would be looking at just taking that into account as well.
Kevin Harrington (15:33)
Yeah, that’s a big topic, isn’t it? Because many, many business owners will have a non-executive director or some form of growth consultancy or business exit consultancy coming along, helping them on the business side. But it’s completely detached from the personal side. And that business owner, the CEO, the founder, perhaps majority shareholder, as you say, they’ve got a huge amount of money tied up in the business.
But when they talk to their private wealth advisor, they’re not taking into account how the business is being run. And in fact, the wealth advisor is very rarely validating the given valuation for the business. And what we see is we see those things knitted together. mean, terminology fabric, it’s where it all comes from, isn’t it? It’s taking the personal and the commercial side of it together, it’s weaving it together. It is already inextricably linked for a business owner.
Let’s not pretend it’s not ⁓ by separating these issues. need to have regard for both at all times to make sure the best is done for the family, for the business owner, for the business itself and all the other associated people.
Darryl Bates-Brownsword (16:48)
All righty, so that sort of wraps up the first area that I’d be looking at of just going, hey, we’re assessing your business, we’re appraising the current state, ⁓ what are we assessing? We’re looking at all things financial. So there’s the first area. The next area I’d start looking at is, okay, let’s look at the operations of the business. How is the business being run, the day to day? Who’s doing what? ⁓ How well is it documented? How much is it systemized? Are you making it up every time you do it?
just how was the business run? I refer to it often as the primary workflow. And the primary workflow in my mind is from when, when you first identify a new lead or how do you generate those leads all the way through to invoicing that, that client, what’s your primary workflow from new introduction all the way through to invoicing. And it’s a sequence of events. How consistent is that? How repeatable is it? How reliable is it? How automated is it?
How much tools, how much to everyone in your business do it exactly the same way, how much templated, they’re the sort of things that I’d be looking at first.
Kevin Harrington (17:57)
Yeah.
And if you if we don’t have to reinvent the wheel every time a client comes along, it means we can produce what they want to deliver what they want more efficiently, effectively and profitably. But the big start point is, has got to be around the owner of the business. How dependent is the business on that owner? And we’ve heard and we’ve even said it ourselves at some point, why is it no one else can get this right?
Now, why am I the only person that can deal with this client or know the answer to that? Well, it’s because the business has become dependent on me. And that’s, is that a good idea? Yeah. So, know, a business owner doesn’t wear their underpants outside their trousers to do their impression of Superman. They don’t wear a cape, or do they? Now, some do, don’t they? And that’s a big risk if…
Darryl Bates-Brownsword (18:37)
You don’t get good people nowadays.
Kevin Harrington (18:55)
You can’t take two weeks off without getting phone calls or being worried. You can’t do a three month cruise around the world. You can’t sell your business because it’s not worth anywhere near as much if you have to be there all the time. So the first thing to do is assess to what extent that’s an issue. It’s always a little bit of it, but sometimes it’s massive. Let’s work out where on the scale it is. And then that’s the opportunity to go, okay,
Let’s look at what everyone does in the organization. And let’s look at how we can spread some of those responsibilities. So we’ve got more people doing more things, which gets people more engaged in the business, which is great. It also helps start to build the leadership team that can take over the business down the road. So I can go on a three month cruise, or someone can buy the business and there’s a team there to run it. Owner independence is one of the biggest
Darryl Bates-Brownsword (19:43)
Yep.
Kevin Harrington (19:52)
single issues that drags the value down of a business and makes it unsaleable.
Darryl Bates-Brownsword (19:57)
Yeah. And yeah, how involved is the owners or the shareholders in the operations of the business? If we can get them out of any involvement, any day to day involvement in the business, in running the business, all the better. If we can get them involved in just the strategic side and leadership side of the business, that’s what we’re looking for. That’s that’s the gold standard. Other things you want to we’d be looking at when we’re looking at the opposite operations of the business is do you have any IP like
Have you got standard methodologies that you’re following that you have designed and you’ve tested over years that ensure that things happen? Sometimes it’s called systems. But what are your methodologies to make sure that everyone’s doing things the same way? And is everyone trained in those methodologies? And are they regularly updated to take advantage of current best practices? And your IP can be documented IP.
like some secret formula that’s protected, or it could be the IP, which is your methodology that you’ve built for your business, which is the way you do things and the people coming to you and buying that methodology from you, or are they coming to you to buy your time? So they’re a couple of other considerations I’d be looking at in your operations. What else would we be wanting to look at in the operations? You think we’ve covered it there? What about cyber? I guess, do we want to make sure that you’ve
You’ve got good protections given everything is so electronic digitally based nowadays. What protections have we got to our systems digitally?
Kevin Harrington (21:31)
Yeah, I it’s funny in this list, isn’t it? Because it’s really Cybersecurity is a bit like locking the front door of your building when you go home at night and turn the alarms on and stuff. So it’s a hygiene factor. But I think in 2025, it has to be elevated to a bit more than that, because we understand how to secure a building, we don’t necessarily understand how to secure ourselves in the electronically and the complete cybersecurity issues.
Look at the number of people recently where it’s cost them their business and sometimes not quite their business, just hundreds of millions of pounds because of a simple problem in cybersecurity. We all blithely go through life logging into things and in our personal lives and business lives, not giving a second thought to it. But what would happen if all your emails disappeared tomorrow? What would happen if you had no control of your website?
What would happen if there was a data breach and all your customers information was on the black net somewhere? Sounds, because you can’t see it, it’s kind easy to forget about, isn’t it? If I’m buying the business, I want to know whether I need to spend some money to fix that because it’s not been attended to. If it has been attended to, great, then there’s less risk in it for me buying it. But if you’re the business owner, don’t you want to have your business safe?
It could be completely wiped out with one cyber action.
Darryl Bates-Brownsword (23:05)
Yeah, so we need to keep on top of that and that’s, we can, can’t be complacent about that nowadays. So we’ve got our operations in order. We’ve, yeah, we’ve got our finances in order. What about our growth and our marketing and our way we keep the future of the business? What, you know, in terms of marketing, branding, positioning, what are the strategies we do to attract people to our business? ⁓
people who’ve got the problem that we solve. do we access them and get no one? That’s I think the next area we’re ⁓ assessing.
Kevin Harrington (23:45)
I think there’s there’s kind of a couple of things here that are really important. One is, are you doing things? And secondly, what’s the impact of it? A lot of people will say, yeah, well, I do this, you know, I’m active on LinkedIn, and we do this, that and the other. And that’s all potentially quite good. But is it actually achieving things? And we need to look at
the end goal of it to start off with. We want ⁓ a business can replicate success and grow. We want it to be a sustainable business. So simple things like client concentration. I last year was talking to some people who had a business ⁓ that had lots of customers, but actually over 80 % of the business came from one family.
Okay, it was looking after different businesses within that family, but it was down to personal relationships. So while they, in that 80 % of the businesses, they were invoicing three or four different companies, the reality is the personal relationship broke down, 80 % of their business was gone. So it was a fragility to the business. And if discovered by someone trying to buy the business, they’d walk away from it, because there’s no guarantee they could continue the personal relationship.
They don’t even know them. What you need is a spread of business customers so that if you lose two, three, four, five, whatever the number might be of businesses as clients, you’re still stable. You’re still okay. And actually I would challenge people to say, many of my top, if you did a listing of customers from top to bottom, starting at number one, how many of those clients could you afford to lose?
all the income from them and the profit before you get to below break even. That would be the exercise I’d look at and it would be quite a surprise for most probably three clients gone and you’re in trouble for most.
Darryl Bates-Brownsword (25:48)
You’re good.
Yeah. And it’s really important. And when you’re speaking, it’s reminding me of going, yeah, how aware is the business of its strategy and its strategy and its marketing strategy? And what I mean by that is, is the business solving a new problem that the people aren’t really aware of? is there a ⁓ that they can get many other places and you’re just
specializing on that solution for a small niche of the marketplace. So I guess what we’re saying is, is your business model about you chasing the market or is it about getting the market to chase you? it sounds soft, but it’s a high level strategy that if you’re really clear around what your approach to the market is, then all of your product pricing and packaging can be adapted to that. All of your channel marketing can be adapted to that. And it’ll make sure you’re getting the right people to your business.
They’ll be happy to pay the price that you can charge because it’s matched to your product and your solution and your marketplace, your clients.
Kevin Harrington (26:58)
Totally
agree. Now completely flip that and let’s look at the next point, which is supplier dependence. It’s exactly the same thing in reverse. So you’re running your company and you’re buying from a supplier. And how essential is that supplier? How secure are they? Are they going to be there next month, next year? Are there other people that provide a comparable quality and price of product? You could flip too easily and
Darryl Bates-Brownsword (27:02)
Yep.
Kevin Harrington (27:28)
If you don’t know any of the questions, answer any of those questions, it’s a vulnerability. And for many factory process driven activities, most businesses will have more than one supplier running in parallel, because anything could go wrong, there could be a cyber attack at a supplier. And all of sudden they cannot deliver stuff they’ve got in their warehouse, but your other supplier probably can. developing new supplier relationships,
in a moment of desperation is quite difficult. But if they’re already in place, that’s great.
Darryl Bates-Brownsword (28:04)
So we’re looking at, yeah, the word dependence is coming up a lot and ⁓ what are, are we dependent on suppliers? So we’ve got one or two suppliers that we’re depending on. Are we dependent on ⁓ customers that you mentioned earlier? Are we dependent on just too few customers, which is also a risk? And yeah, are we dependent on too few employees or team members in the business, whether they be owners or just other areas of the business?
That means we’re wholly reliant on one or two key people in the business. Are we overreliant? Are we over-dependent? It creates a risk, which leads us to the next area that we start looking at in the business. And when we’re doing the assessment of what are all the risks, can we do a bit of a snapshot of the risks? And these are sometimes legal risks, but compliance risk, regulatory risks. What are the risks that we’re looking for when we’re doing an assessment?
Kevin Harrington (29:00)
Yeah, this is one that some people really warm too quickly. And it can be mostly a desk based activity, can’t it? it’s saying, is everything documented? Do we have agreements with people that clarify and protect all parties for the right reasons?
Darryl Bates-Brownsword (29:21)
And can we find them as key Kevin? lot of people go, yeah, that’s documented. It’s somewhere. Yeah, great. Can you show me? where is it?
Kevin Harrington (29:29)
Yeah, but also it’s making sure we’ve done it in the right way. There was a case this week reported of an agreement where someone said yes on a WhatsApp message and it was then classed in the court as legally binding for a £180 million contract.
because you can make a contract verbally, it’s harder to prove, but WhatsApp, if one of your people that is in charge of negotiating something says yes on WhatsApp, they have said yes for your business. So let’s look at what we think the agreements are and let’s look at how they’ve been put together. So we have to discover and find those documents and probably look at changing our terms and conditions a little bit, saying that our terms and conditions override informal.
Darryl Bates-Brownsword (29:52)
huh.
Kevin Harrington (30:18)
WhatsApp type conversations or whatever. But it’s all those things, isn’t it? We’ve got contracts with our suppliers and our clients, but what about without just our fellow shareholders? Do we have a shareholder agreement? If one disappears through ill health, death, whatever, what is the agreement? Where will that shareholder’s shares go to? Can we…
Darryl Bates-Brownsword (30:20)
Yep.
It’s a massive risk.
Kevin Harrington (30:46)
bring them back into business. Does it go to a spouse or a partner? First of all, let’s understand what it is and then say, should it be a better arrangement? The number of businesses that don’t have shareholder agreements is embarrassing to start off with. The second thing is that the barrier it puts in place for some sales is quite incredible. A lot of buyers of businesses will go, if you haven’t got a shareholder agreement, I can’t carry this conversation on.
We’re going to be wasting our time if we’re not careful. So for multi layered reasons, shareholder agreements are essential.
Darryl Bates-Brownsword (31:24)
Absolutely. So, you know, some of the risks are just simple risks to our assets. What would happen if we lost our assets for some reason? We can protect those with insurance. But when we look doing a risk assessment on our business, we’ve got to go so much further than just some of those simple risks. You know, we’ve got, you know, as you mentioned, contracts and shareholders and, you know, workflows. What if if what if someone, a key person was no longer available?
There are so many different risks that we’ve got to be aware of in your business and doing a current state assessment. What we want to do is we’re not going to analyze all of the risks in the current state assessment. What we’re assessing is how well are you aware of all of the different risks and the different types of risks in your business? And if you haven’t got some sort of contingency plan in place, if you haven’t got done some sort of risk analysis of your business, then there’s you don’t know what you don’t know.
Kevin Harrington (32:20)
Yeah. And you know, contracts don’t have to be 23, 24, 25 pages long. They have to serve the purpose and have clarity. And they shouldn’t be heavily one sided things, because they can be ruled out as well. should be agreements that work for both parties and just sets out with absolute ease, what is going on so everyone understands and so it can be, they can be brought out in
if trouble occurs but oddly the better prepared you are the less trouble occurs.
Darryl Bates-Brownsword (32:55)
And a contract, I like what you’re saying there, because a contract is just an agreement. And by documenting it and going through all the clauses in the contract, it’s just a mechanism for ensuring that both sides have the same understanding of what’s expected of them. Nothing more, nothing less. What a legal requirement.
Kevin Harrington (33:11)
Yeah, and the simpler we write it, the
easier it is people to go, yeah, okay, I didn’t realise that was expected of me as well, but I can do that. That makes sense. And we all like dealing with people that are clear with what they want. What we don’t like is dealing with people that have got a fuzzy idea of what needs to happen.
Darryl Bates-Brownsword (33:29)
Yeah. So there you have it. There’s a sweeping ⁓ overview of the type of things that someone will be looking at in your business and what you should be looking at in your business. If you want to start some planning to go, hey, look, I’m looking for a transition in leadership and ownership in my business in the coming years. Yeah, I want to hand over to my kids. I want to hand over to my management. I want to sell it. I want to exit all these things. The risks that will be. ⁓
getting in the way of a successful transition. So, way to from here, Kevin.
Kevin Harrington (34:03)
well, I think before we get to exactly that point, you just remind him, my son is in the process of buying his first flat. you know, it’s the same things going on there. We do, we buy properties, we do searches. Does the vendor own it? Well, just occasionally they don’t. I’ve had that in my life as well.
Darryl Bates-Brownsword (34:07)
Ha
Kevin Harrington (34:25)
It’s exactly the same thing as selling or buying a house. This is not new to any of the people that are listening to this, I don’t think. I think the important thing is to take on board the value of doing all these things, and you don’t have to do them all at once, and you don’t have to do them all by yourself. But have an intent to get through it and make sure all these things are covered. That’s what we do for a living. We help people do these things.
What differentiates us at Fabric is we’re taking a panoramic view right through the business, which is where the conversation started, right through to the business owner, and then the family and the ongoing generations of the family.
Darryl Bates-Brownsword (35:10)
it. So assess your business, get clear, create a plan, understand your starting point, and then you’ll be able to be clear that you know when you’ve made the direction. Kevin, as always, thanks for sharing your exit insights with us today.
Kevin Harrington (35:26)
Thanks, Darryl.