In our latest growth conversation blog we speak to James Allison, corporate partner at Napthens solicitors, which is also a member of Boost and Co.
What type of advice is in demand at the moment from growing businesses? Advice on funding to assist growth, and the business structure which mirrors the appropriateness of that funding, is a hot topic right now for us.
Our relationships with lenders is crucial for this to be effective locally and professionally, and this works very well for the benefit of our clients. We also see entrepreneurs and companies look at alternative funding structures too – debt and equity providers on top of the orthodox funding models. This, in turn, leads to an overhaul of the company’s corporate documentation to protect the company and its shareholders and that of the interests of the funder.
Intellectual property is another hot topic too – brand protection and registration is a busy practice area in our department as the need to harness value and protect intellectual property becomes more important in our economy owing to how we trade, sell and manufacture products. An example is that at any one time we have more than 50 applications in the Intellectual Property Office which reflects the market’s view on how important this piece of the jigsaw is in any business.
Meanwhile, corporate transactions are certainly up: our team is extremely busy selling owner-managed businesses and corporates and the corporate market in the last fourteen months or so has woken up.
We are seeing more foreign acquirers come onto our patch and that of our client companies – from the USA, Far East and the Continent in particular. What is encouraging is that we have the biggest corporate legal team in the county and we are busy – all of us – in terms of managing client’s needs in sales and acquisitions.
In your experience, what are the top three challenges facing growing businesses at the moment?
Which high growth entrepreneur would you most like to invite over for dinner and why? There are two standout candidates for me: Lord Hugh Cavendish of Holker Holdings: he’s a futurist, a vast real estate owner, vehemently successful and – crucially – has very strong local roots. Secondly, James Caan – he has the ultimate Midas touch and he is a gentleman.
If you could go back in time to the beginning of your own business growth journey, what one piece of advice would you give your younger self?
Trust your gut feeling – facts and figures are extremely important in assessing situations but your instincts are equally as important.
How can Lancashire businesses ensure they continue growing?
They must ensure that they continue to improve and innovate and they constantly have a point of difference in what they do. Businesses must fly the Red Rose flag more often: let’s be more proud about our county’s heritage – we were the industrial revolution’s founders and we are inherently entrepreneurial. Finally they must ensure that young people coming into the region don’t leave the county: let’s continue to develop and incentivise the next generation to lead our businesses – foster and retain.
What steps can businesses take to make themselves a better investment proposition?
They must exude simplicity and control – with shareholders, employees, funders, suppliers and customers. They must do more than what is required alone – trail-blaze and demonstrate how. A workable plan must be in place, and must be sense-checked regularly and updated showing achievements, milestones and aspects which have been attempted and ditched.
What are the key legal considerations for growing businesses?
Cash, cash, cash – manage the debtors’ ledger with military precision. Make sure that if a business involves other shareholders that a shareholders agreement is drafted by lawyers to govern the relationship – I cannot stress this enough. My litigation team will kick me but getting this right in the first place will avoid spending money needlessly on litigation in the event a problem arising in the future.
How can business owners protect themselves against the key risks for growing businesses?
By being thorough from the start. Make sure stakeholders are governed, make sure funders are managed and the appropriate funding facilities service the demands of growth. Make sure employees are incentivised and committed to written terms of employment, and that corporate governance is in place for the business as a whole – who can do what, with whom and how. For me, the key is having a robust, agile and experienced management team in place sharing the burden of running the business – mitigating risks, capitalising on opportunity and reducing threats to the business.
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