The Podcast Passion That Helps Businesses Jump Legal Hurdles
And how to prepare the perfect exit plan
In a world where online communication and conferencing has become the norm, commercial lawyer Joanna Oakey has found a way to make it both fun and functional.
Describing herself as a ‘deal-maker with a passion for business’, she has launched not one, but two podcasts – Talking Law and The Deal Room – and they’re growing more popular by the day.
“Talking Law was the first podcast that I launched. I started it because I felt there was a lack of information generally for businesses about the tips and tricks from a legal perspective to help them avoid legal landmines in business,” Joanna said.
“I saw businesses repeatedly fall into these when they didn’t have the benefit of education. The podcast itself was actually inspired many decades ago when I first started practicing law, and I had a client at the time who was in dire straits, because the business had grown far quicker than the legal foundations under it. Consequently, the business was impacted so much that it went into liquidation and the owner ended up in personal bankruptcy.
Be aware of the risks
“This was a really stressful situation for him. I felt deeply for him and I made a resolution at that point that I would do everything I possibly could in my power to ensure that business owners were aware of the risks and knew how to seek out the right help to avoid them.
“A podcast where I could convey lots of information, stories and examples ultimately became the easiest way for me to communicate to an audience that deeply needs it.”
Joanna is particularly passionate about The Deal Room – Australia’s leading podcast talking about business sales and acquisitions.
“The reality is, I love the business sale and acquisition industry so much that every single podcast that I do in this area is actually something that I find incredibly interesting, useful and quite often learn things from as well.
“I think passion is incredibly important for ensuring that you’re providing the absolute best services you can for your client. I personally couldn’t come to work every day if I wasn’t doing something that I was passionate about.
Buying a business
“I love seeing businesses do deals that can change their life, whether it’s because they’re exiting a business and entering into a new phase or because they’re buying a business for the first time or to add into other businesses they currently run.
“At the end of the day, clients of any professional services firm benefit massively if they’re dealing with people who are passionate about the industry that they are in.”
Joanna believes it’s all too easy for SMEs to get bogged down in red tape and legal jargon and end up in distress.
“It’s incredibly easy for an SME to miss some of the really critical steps in building the right infrastructure to support and protect their business. But, on the flip side, I know businesses just feel overwhelmed by the legal area and they feel confused and anxious because they don’t know what they don’t know,” she said.
“They are afraid of that unknown risk. And sometimes lawyers don’t help the situation because many lawyers over-complicate things and create documents and deals that are too complex and too full of legal jargon. Ultimately, that makes businesses distrust lawyers and thereby fail to understand the important role that a lawyer, the right lawyer, can play in the business.”
The Deal Room
In The Deal Room Podcast, Joanna doesn’t just talk about the legal issues that relate to business sales and acquisitions, but also interviews industry experts and business owners who have bought and sold.
“I love to hear the stories, partly because I feel there is a lot of information that could be really useful to business owners who are buying and selling, and to professionals also involved in the industry.
“It’s also because I wanted to hear more from players throughout the industry, and on lots of topics relating to the industry.”
If you are currently buying or selling a business, Joanna believes you would find The Deal Room particularly useful.
“There are lots of tips and tricks from me on the legal side and our legal team at Aspect Legal but also from the wealth of experience brought by a range of guests who talk about the ins-and-outs of buying and selling a business.
“I might be a bit biased, but there really is nothing else like it available in terms of the education that it can provide to businesses that are buying and selling. When you are buying or selling a business, there’s so much value on the table that it’s imperative you have a bit of self education, so you understand what you’re doing.
Preparing an exit plan
“Most people don’t buy or sell many businesses in their life. In fact, they may only buy or sell one business in their entire career. So, given it’s not something that they do regularly, it’s extremely important they take on board some education, so they understand what to look out for.”
Preparing an exit plan when selling a business is critical.
“Business owners need to be very well prepared when getting ready for exit. In many instances, this is done really poorly because some business owners just don’t know how to get their business ready for exit. And so ultimately, they end up presenting to the market, a business that is not groomed for sale and therefore unlikely to achieve the price or terms or range of buyers that may have been possible if they had properly understood what they needed to do,” said Joanna.
“The types of things that need to be considered when getting a business ready for exit is firstly, and most importantly, how to structure a sale. Many business owners don’t realize that there are different ways to structure a sale and that this can have a great taxation and financial impact at the end of the day.
“There might be changes that need to be made to the business or the structure of the business well in advance of the sale in order to fully optimize it.
Understand valuations
“The next step is to fully understand what the value is in the business and how the business has protected that value and will ensure that that value is transferable to a buyer. There are lots of legal techniques that we use in order to do this and some of them take time. At the end of the day, it’s all about getting on the front foot and having that discussion with a lawyer who is well experienced in dealing with businesses at exit, and other professional advisors who deal with businesses at exit to ensure you have a solid runway to make any changes needed well in advance before you actually put your business on the market.”
We wondered how Joanna thought COVID would affect business sales moving forward.
“I’m really buoyant about my outlook for the market after COVID. Firstly, I think there will be a lot of buying opportunities, especially for people looking to replace a job with a business. I think buying a business in order to do this, rather than starting from the ground up, will be a really attractive option.
“I also think there will be a lot of opportunities for businesses to grow through acquisition as well. Business owners looking at retiring in the next 5-10 years may consider the energy required to rebuild their business after COVID is too much of an investment, and that cashing in right now makes the most sense.
Wave of innovation
“On the flip side, for the people who have the energy, post-COVID will potentially provide a lot of buying opportunities. I also think COVID has provided an incredible impetus for many businesses to stop and think about how they can diversify income and strengthen their business in many innovative ways. I think we are seeing a wave of innovation stimulated by COVID.”
One of the hardest things for a business owner to do is break through their emotional connection to the business and arrive at the right asking price.
“I’ve spoken to so many businesses that completely reiterate this issue that in the vast majority of cases, business sellers don’t have a realistic view of the value of their business at sale. At the end of the day, the true value of a business is simply what the market will pay.
“Selling a business can be a very emotional process and I find many business owners who are exiting don’t fully appreciate just how emotional a process it may be, and price is just one aspect of that emotion.
“The businesses that do best at sale are those that are properly prepared and properly prepared means not just preparing the business for sale, but also getting really educated about how businesses are valued, what the value is in your current market and your current industry and, if it’s a while before they are selling, what the value drivers are, that will help them to increase that value prior to sale.
Breaking the emotional connection
“Ultimately, the way a seller breaks through the emotional connection and arrives at the right asking price comes down to getting the right team around – people who know what they’re talking about to give a really realistic indication of price. Likelihood for disappointment comes for business owners who choose advisors who will give them an overly rosy unrealistic picture and ultimately leave them with a business that sits on the market getting stale for a long period of time until they make the market varieties.”
A good way of improving the value of your business is ensuring you have a strong online presence.
“From my perspective, I feel like an online presence is all about being able to understand your customer, to be able to walk in their shoes and to be able to provide the information that is really of use to them when they are making decisions,” said Joanna.
“Many legal firms fall down in their online presence because they simply aren’t connected enough to their clients. They are more connected to the provision of law and legal services than they are to understanding, ultimately, what it is that are the true risks and opportunities for their customers.
Listen and learn
“At Aspect Legal, we see our role as being to help business owners drive great deals in business, sales and acquisitions. And while many people view lawyers through a lens of paperwork and jargon, we know that the secret to a great deal is really the systems and processes behind the documents and the teamwork that anticipates the issues and the partnership that is created along the way.
“I think it’s extremely important for business owners to walk into an acquisition or an exit with the right team around them, and the right education in order for them to be able to recognize a good deal versus a bad deal.”
The great news is that both Talking Law and The Deal Room are readily available to our readers. You can access them through Apple podcasts, or any podcast player, and through the website at https://www.aspectlegal.com.au/talkinglaw/ and https://www.aspectlegal.com.au/thedealroom/
If you would like to book a free call to discuss a business acquisition or exit with Aspect Legal, please use this link https://www.aspectlegal.com.au/book-lawyer-now/
BIO
Managing Director of the commercial legal practice, Aspect Legal, Joanna Oakey has diverse experience working with a large portfolio of organisations in the areas of business sales mergers and acquisitions, contract law and commercial law.
She also regularly speaks throughout Australia and conducts training in issues relating to contract law, compliance and the Competition and Consumer Act (formerly the Trade Practices Act).
The team at Aspect Legal brings decades of specific legal experience in the area of acquisitions and exits, along with a five-step methodology to provide speed and certainty, a smoother deal and peace of mind and, ultimately, to deliver the success of a great legal and commercial deal.