Feargal Quinn: My relationship with my investor has become hostile
I took an investor into the business several years ago who holds a 25pc share of the business. Things have not worked out and while the business is performing okay, the relationship is all but perfect. All communication is now confined to email, many of which are hostile. Can you offer any advice?
Feargal says: What you need to do is very clear – you need to find a way to remove this investor from the business as it will stifle the business performance and bring unnecessary stress to you. What is less clear is how you do this.
There are a number of obvious suggestions that you may have explored already. Could you get a loan to finance the buyout? Could you look at crowd funding through a group like www.linkedfinance.com? Could you find a new and more suitable investor?
If none of these are options, then perhaps you have to "bite the bullet" and arrange a meeting with your investor whereby you set out the unacceptable nature of the relationship and that you are not willing to allow it to continue. Then set about finding ways that are acceptable to your investor as part of an exit strategy.
I have met many businesses where an investor's interest is gradually paid back over a a year or two and, while this might cost you a premium, it may be an acceptable solution to both sides.
Like any relationship, when a business relationship goes irreversibly wrong, then the only way to tackle it is with frank and open discussion with the objective of finding a solution.
Question: I run a reasonably small successful accountancy practice; however, we have never really targeted the retail sector and I wondered what key advice you feel retail business owners need so that we can provide them with this service?
Feargal says: When I ran Superquinn, much to the dismay of our financial director, Frank Murphy, I was regularly heard saying: "Whatever we do, don't let the accountants take over." Of course, I said it very much tongue in cheek but I was always trying to get the balance right between the need to make sufficient profit and have the correct controls in place versus creating a world-class experience for our consumers.
I think there is an absolute need for specialist accountancy firms to provide independent retailers with great advice for the sector.
I meet far too many retailers who have accountants who don't understand the retail sector, or who simply perform a routine filing service for them at the end of the year.
What is needed for most independent retailers is someone who will not alone produce their accounts but challenge them on the numbers, make suggestions for improvements and act as a general guide.
I feel many accountancy firms lack the knowledge of industry norms for the various KPIs necessary to run a successful operation.
It would be fantastic if your firm was able to guide retailers on what they should expect under the various cost and profitability headings and then help plan to get them to this point.
I definitely think you have a business opportunity here.