James Hunt is a solicitor, serial entrepreneur and founder of Everyman Legal – a new type of law firm providing legal services for entrepreneurs. The company of solicitors is the first in the UK to announce it will take advantage of the new practising regime created under the Legal Services Act by seeking a stock market admission. The company intends to trade its shares on Sharemark – a stock market for smaller companies – in the last quarter of 2012. In an honest and open account for Real Business, James Hunt will be charting the ups and downs of preparing his company for an admission.
I meet with Steve Fernback, Everyman’s financial consultant, this week to start the detailed work on our business plan including a financial projection for the next five years.
We are still a small company but with the changes taking place in the legal services sector there is a significant opportunity to grow.
I ask myself the question: How do I challenge myself to be bold and entrepreneurial?
Over the years, I have acted for many businesses looking to sell or float their companies. I am starting to appreciate that being an adviser is much easier than being in the spotlight myself!
The starting point, I conclude (with prompting from a friend), is to work back from a single number. I decide that my single number should be the targeted value of Everyman in year five.
Having got that figure, we will work back to a profit projection. From that profit projection, we will need to focus on key revenue streams and how we grow these.
This “one number plan” is an empowering thought as I draw up an outline investment plan. The following points became apparent to me as I write that plan:
- A key attraction for investors must be a good dividend yield. I conclude we will need to pay this from the beginning. As I will be a significant shareholder my interests will be aligned with those of our investors.
- Making sure we manage the expectations of investors will be key.
- We need to decide what we believe are the key performance indicators against which Everyman should be measured.
- It would be a great idea to work with an independent valuer with whom we agree these indicators and who reports on them publicly for us. I have in mind the person who could do this valuation for us.
All this thinking brings to mind my time as a young corporate solicitor in London. I recall how the CEOs of our clients would recount how they worked with analysts (people working for stockbrokers and investment banks) who were publishing reports on sectors and companies operating in those sectors. The reports were very influential in stimulating potential investor investment.
As a very small company, we will not have analysts following us. But through this independent valuation published every six months, I can see how we can communicate with the market.
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