Simon Bedard

The fear and anger evident in a young Simon Bedard were formative factors that lead him many years later to create an advisory business offering sanctuary, structure and safety for business owners: basic human needs that he lacked as a child.

Simon thanks his mentor for turning his life around: from potential ruin to personal triumph over fear, and to now being in a position to give back to a special part of our community.

One of the great sporting challenges of modern and ancient times is the gruelling forty-two kilometre marathon event.

Simon believes running a business is analogous to running a marathon. “The last hundred metres of a marathon should be exciting and a joy. You should be able to walk off the track with your head held high, and be proud of your achievements. It should be the same when you exit your business.

“Most will only ever exit a business once, whether that’s selling it, handing it down, or putting a manager in place, but most business owners don’t know how to navigate the process. They’re experts in their business, but they can find selling quite emotional.  

“What makes this interesting, is that people are so much better educated these days, and this creates options in their lives. They’re no longer destined to follow their parents into their business, which is why less than nine percent of businesses make it to the third generation. As a result, selling has become a more common choice these days. Our concern is that business owners are not maximising this part of their journey.

“Some business owners spend their working lives taking risks and making sacrifices, and deserve to be rewarded when they sell. They’ve done the hard yards for a very long time, often with great success. But they need to finish well.

“The exit process can be like running the last leg of a marathon, they get a hundred metres from the finish line then they trip and fall.”

Simon argues that the emotions around selling a business can run high, because often the owner sees the business as an extension of themselves, almost like one of their children. “They’ve poured so much time and effort into the place, they can sometimes feel like they are betraying the business by leaving. They’re also opening themselves up to scrutiny, and any criticisms of the business can feel like some sort of judgement of them as a person.

“Often selling a business is compared to selling a house, and while there are some similarities, the truth is very different. While people can be emotionally attached to their home, the process itself is much simpler.”

Simon suggests “selling a house is far more common than selling a business, and therefore buyers are much more comfortable making these types of decisions. But also, the process is far more prescriptive.

“People get a pest and building inspection, and assuming there are no major issues, they negotiate over the price and move to complete the transaction. In fact many properties are bought after one inspection, and some are bought remotely without a physical visit.

“A business is far more complicated, and because a lot more can go wrong, buyers are far more wary of potential risks. There’s also the element of pride on the line. Because ‘it’s business’ people feel they need to negotiate more to ensure they are getting the ‘right deal’.”

Simon points out that there are three common types of buyers. “You have the lifestyle buyer who just loves what you’re doing and wants to continue on with your work. Then you have the financial buyer (like the venture capital firms) who are all about return on investment. Then you have the strategic buyers, who usually see something that would enable them to make a lot more money with your business than you can. For example, imagine if you manufactured tables and you came across a company that manufactured chairs. If you bought this company, you wouldn’t just pick up the revenue from the company selling chairs, you would also have a new client list to sell more tables. A strategic acquisition provides leverage, and this type of buyer would normally be willing to pay a lot more than other prospective buyers.

“There is a myriad of scenarios that need to be considered when selling, and finding the right buyer is critical to a good exit, both financially and personally.”

Before starting Exit Advisory Group, Simon spent the first part of his career in the finance and investment sector working for a private family company, and later in the Institutional Banking and Global Markets division of Commonwealth Bank. Since then he has also started, bought and sold his own companies in the energy and technology sectors.

Throughout his career, Simon was acutely aware of the economic impact of small-to-medium enterprises (SMEs). Not only do they provide the backbone for employment, but the people that start and run small businesses are often solving some of the real problems in our society. Too many of these business owners are not getting the rewards they deserve when it comes time to exit. In starting Exit Advisory Group, Simon wanted to change how the industry worked by redesigning the process for exiting well.

“When we looked at the industry, we realised that one end of the market was very transactional: only focused on getting the sale. At the other end, was the big end of town which could provide the advice but was cost-prohibitive for many business owners.

“There was group of businesses turning over between two and forty million that wanted good advice, which the market wasn’t providing. When we looked at these businesses we thought: ‘Wow! This is their biggest asset and, in many cases, represents their retirement fund – their superannuation – so they can’t afford to get it wrong.’

“I saw this asset being treated disrespectfully and with a lack of professionalism which was alarming. There were a lot of people who shouldn’t be doing this job, or who were doing it for the wrong reasons, and we decided to do something about it. We thought these business owners needed somebody who cared about them, not just brokers doing a transaction to get a sale. We want to see them finish their journey well.”

The first question the team from Exit Advisory Group asks any client is; ‘what type of life do you want?’ Simon believes if you start with the end in mind you have a better chance of achieving a positive outcome.

“I don’t think any of us were born to just make money, we were born to live our lives and hopefully your business is a vehicle to deliver the life you want.”

Simon, with his mantra ‘what type of life do you want’, is almost unrecognisable from the boy who rebelled at school to the extent that very few gave him any chance of achieving anything.

“I was the kid who was going to go to jail. I was the kid, as an eight-year old, who swore at the teacher and threw books across the room. I was a really, really angry kid.”

Simon would have stayed angry but for a few people who managed to see deeper inside him and realised the anger was bravado, a way of protecting himself.

“I learnt very early that anger trumps fear. You can actually harness anger to overpower your fear. So I was an extraordinarily angry person for a very long time. I was using rage as a way to mask my fear.”

Simon’s childhood was difficult, he came from a broken family and experienced many things that no child should have to go through.

“Living with my father was a lot more relaxed and open-ended. I had the freedom to do almost anything I wanted, which led to a lot of adventure and building a sense of self-reliance. That can also lead to some bad things happening. On the other hand, my mother’s house was full of rules and regimentation. She was very strict on how I was to behave, and in hindsight, I realised that the rules and boundaries provided a sense of safety and protection.

“Fortunately, my mother’s partner, Peter, realised I was not a bad person and that I just lacked the structure to allow me to flourish. He arranged for me to get into boarding school, but even then, it took a long while for things to change.

“My first day at the school didn’t do a lot to allay my fears. Firstly, I arrived a week late due to a last-minute bout of chicken pox which made me stand out. As I was being shown around the boarding house by a boy in my year, we stopped in the ‘rec-room’ and I happened to roll a couple of pool balls across the table. No one was playing at the time, but I didn’t realise that as a junior I had to ask permission to touch it. When one of the senior guys came storming over with a murderous look in his eye, my new mate stepped in to protect me, saying I didn’t know the rules. The older boy didn’t care and proceeded to bash this boy right in front of me, which was not exactly how I imagined making friends. Fortunately, thirty years later we’re like family and still catch up all the time.”

Even though boarding school was seen as a new start for Simon, it would take a while before he settled down. “Looking back, I am not surprised it took me a while to get settled. I had a vastly different background from most of the kids, and I really struggled to fit in.

“The first three years I was always getting into trouble with the teachers, and into seemingly regular fights in the schoolyard. Deep down I knew that being at this school was an opportunity for a different life, and that aspirational life was constantly on display. Despite my struggles I knew I wasn’t going to quit, because I never wanted to go back to my old life; but I was bashing my head against this wall and trying to work out who I was and why I didn’t fit in.”

The turning point came when his stepfather, Peter, took him aside to chat. As an old-boy of the school he understood the challenges, but he also knew there was more to it.

“I would have been about fourteen and we had a long talk. He said to me, ‘Simon, no matter what happens I want you know while you’re not my son biologically you are like a son to me. As someone who loves and cares for you, you need to start thinking about how you’re contributing to your own life and situation.’

“Peter was such a thoroughly decent human being and he showed me that life can be better if you make the choice to do it. Other people were not having the same issues, so either everyone else has a problem, or it’s me. I then realised if I wanted a different life and wanted people to treat me differently, I needed to change the way I behaved.”

Despite being so young Simon was able to grasp the severity of his situation and began to make changes. “Everyone wants to be liked, but for me it was more about wanting to live the life I was imagining for myself and recognising that I couldn’t get there by being so confrontational.”

The change wasn’t easy, there were still a few setbacks, but Simon was better equipped to handle those situations because he realised he wasn’t alone. He finally started to have some certainty in his life and this helped to take away his fear.

“Fear consumes you and it takes so much energy that you have very little left to do anything else. Peter was able to take that burden away completely and allow me to just be me.

“I was fortunate enough to have someone who cared enough to see through the flaws and was able to hold up a mirror and say, ‘mate, are you happy with what you see?’ and if I wasn’t, he said I could do something about it.”

So when Simon asks clients ‘what kind of life do you want?’ it comes from a place inside him that understands we all have our own fears and concerns.

“For business owners, there’s often fear around being able to support their family and where will it all end up. So our focus is about trying to provide a safety-net and structure around our clients to help remove that fear let them know everything is going to be all right.

“Our clients get a sense of confidence around their future because we have a proven system that delivers reliable results. We ask the tough questions, and when we face the rest of the world, we’re doing it side-by-side.”

Simon finds there are three common areas his clients focus on: valuations; what happens after they get the deal done; and their emotional connection to their business and their legacy.

“The valuation is the most obvious thing people want to know because it has a material impact on their quality of life once they sell. Helping clients understand how we will find those all-important strategic buyers is critical.

“People also want to know how their life is going to look while they transition out of their business. Some people are able to hand over the keys and exit fairly quickly, while others can be contracted to continue working for a number of years post the transaction. This can be a concern for some business owners as they’re often not comfortable with the idea of reporting to someone else, and it can also be confronting watching someone make decisions about ‘your’ business.

“This speaks directly to their concern around their legacy. Will the company continue to exist in its current form, and will it continue to deliver on the mission that was so important to the founders?

“All of our clients start with a sense of fear that things will not work out the way they want. We help manage that by putting structure around the process, helping them understand their options, and working through some of the challenging questions. While all our clients are different, there’s always someone out there with similar challenges, and our clients really benefit from that experience.”

ADVICE

“When thinking about exiting a business the real fear comes from uncertainty and complexity: uncertainty around the outcomes, and complexity around things like people and family relationships.

“We help clients understand their options and how to approach some of the challenges.

“Once they have some clarity around their options, we help chart the next course of action. This clarity around the expected outcomes provides an enormous amount of relief and comfort, and minimises any fear of the unexpected.”

Simon encourages us all to treat everyone the way we expect to be treated. “You’re dealing with people. You’re going to have fears and concerns, but you need to understand the person on the other side of the table also has fears and concerns.

“If you understand you’re dealing with human beings, you’re going to get a much better outcome, and I don’t just mean in money terms.”

Keeping an open mind is also one of Simon’s success traits. “There are always three sides to every story: yours; theirs; and somewhere in the middle is the truth. My mother always said, there’s no such thing as black or white: we all live in a thousand shades of grey. So get comfortable living in the grey areas, and try to see things from other people’s perspectives.”