John Coyne, Vice Chairman
We recently held the second call in our Business Owner Transition series with Matt Coyne, author of Straight Talk from the Front Lines and CEO of Brandywine Mergers and Acquisitions. Matt’s presentation primarily focused on the idea that an advisor must play the emotional therapist as much as the transition planner. He emphasized that an advisor’s role is to help the business owner realize the purpose of owning a tangible asset is to maximize its value, not to infuse it with a personality like a favorite old retainer in Downton Abbey.
Many years ago, I had the opportunity to hear the great Peter Lynch of Fidelity Magellan fame and he said something so profound that it’s been my mantra ever since. He said, simply, “stocks don’t know you own them.” He went on to state that stocks don’t care if you’re a Bishop or an axe murderer; they don’t know that your dad worked at the company for 30 years; or, that your grandmother made you swear you would never sell good old Texaco (my mom in this case). These lessons apply equally here with some variations.
Every business owner must consider the impact of a sale on their employees, their customers, and their families. But, that should be as dispassionate in the analysis as any other valuation they will be conducting. A buyer, no matter how invested in the industry or this acquisition, is only looking at the purchase for the opportunity it presents to make money for themselves and their investors. They will happily listen to war stories and personal histories at the closing dinner, but these will never move the EBITDA one dollar.
An advisor needs to help the business owner recognize that the business was a means to an end. And, it is this reward that should have the personal feelings attached to it because it represents that they, their families and their legacy will enjoy the fruits of their labor. It is like the young woman in the Liberty Mutual ad who loved but totaled her car “Brad” until the insurance company called and she broke into her happy dance. So we all need to put on our tap shoes and get our owners out on the dance floor!
For 30 years, Brinker Capital has served financial advisors and their clients by providing the highest quality investment manager due diligence, asset allocation, portfolio construction and client communication services. Brinker Capital Wealth Advisory works with business owners, individual investors and institutions with assets of at least $2 million. To learn more about the services available through Brinker Capital Wealth Advisor, click here.
The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Brinker Capital, Inc., a Registered Investment Advisor.