Yesterday Tim Lane and I were talking to a client, about multiple shareholders and the benefits of growing the business (the pie) for all shareholders. In this multi shareholder business, we are discussing transacting on equity to shift the percentage held by the parties.

Ideally, the party would continue to receive a similar profit distribution on a lower shareholding, possible only by growing the pie. By increasing profitability (either by adding new revenue, or a combination of revenue growth and oversight on costs), we can often strike successful transition plans between equity holders.

By bringing in a new shareholder working within the business, or incentivising those that are actively working in a business, it often leads to a more focused (and profitable) operation. We joke that those incoming shareholders are full of debt and full of beans, but its essentially human nature. Where there is more risk (more debt) people are going to act more consciously - willing to work harder to add that new client, or be more discerning about the next staff appointment.

Owning a smaller piece of a bigger pie diversifies risk within the business, rewards and retains key team members, and often leads to higher business performance. What have you got to lose from having a discussion on how we can help you enjoy and benefit from a smaller piece of a bigger pie? Contact our office here to discuss.