Jonny’s initial thoughts were not that positive: “I used to feel that owning a practice would take away my freedom – as an employee I could just hand in my notice whenever I wanted and go work anywhere for anyone and even apply for a visa and go work overseas. As soon as you sign up to running a company, you’re tied down. But Pete used to say that it was quite the opposite and it had given him more freedom than he’d ever had before because he was the master of his own destiny.

Ifat also needed to think about it: “When Debbie and Pete broached being a partner with me, I wanted to make sure that the firm was right for me – you don’t just accept partnership and then switch firms a year later. It’s a long-term commitment. I knew the firm worked really well, but I didn’t know if me and Jonny would work really well because Jonny & I had only worked together with Debbie & Pete. So whilst I knew the four of us worked together really well, I didn’t know if just Jonny & I would be a good fit. We spent some time together and realised that whilst we’re different, we’re also good at not treading on each other’s toes and we’re considerate of each other.”

“With the sale,” they recalled, “we wanted to make sure that it was fair for everyone and that really helped when we were having the discussions and when the solicitors were involved. We were still working in the company even though we were buying it - so we’d have conversations with Debbie & Pete about buying the company, and then go back to being partners and employees. The fact that we wanted it to be fair for everybody made it so much easier – it didn’t feel like anyone was trying to do anyone out.

“It didn’t take long to settle on a sale price for the practice when the time came. It was a two-year process from when they first said they wanted to exit the practice at the end of 2020 and if we weren’t going to take over the practice then they would need to look for an external buyer. At the start of that process, they’d given us a price for what they thought was the value of the practice. We decided that we wanted to go ahead but 18 months later when we were part-way through 2020, we’d looked at the figures again and felt that their valuation was too high. 

“There was a power imbalance there – they’re the boss but you’re challenging them! We all had a good discussion about how you value a business, and we researched the amounts that practices were now selling for and then were able to reach an agreement that was fair to everybody.

“There was a lot of trust between us. So much so that there wasn’t a clawback clause in the sales agreement. We felt that a clawback clause wasn’t needed and we recognised that they had come down on the sale price so it seemed a fair compromise.”

Jonny explained why: “A lot of the relationships were already held by us before the sale was completed so if we did lose any clients then it wasn’t likely to be because Pete & Debbie had left so a clawback claim would have been unfair on them.”

Ifat agreed: “We did a realistic valuation of if we were to lose clients then who would it be and we did flag a few that we didn’t hold the relationship with, but the majority of them were either in my portfolio or Jonny’s. We did lose a few clients but nothing major – literally a handful.”

The payment schedule agreed was unusual they continued: “Pete suggested a 10 year payout which isn’t common – three years is more common and usually there’s an upfront payment whereas we didn’t have to make any payment up front. There was an interest rate built in to make that option fair for them – and it was a better interest rate for us than if we’d had to get external financing.

“Pete & Debbie asked us what we needed to make the transition go well and really we just needed them to not be in the office as much so that clients and the team would rely on us more. That naturally happened with the Covid pandemic – they weren’t there as a point of contact and clients didn’t want to come in for meetings anyway, so most things were done online. It all went very smoothly. We’d already taken over way before they left so there wasn’t really a transition. The practice manager stayed on so everything else stayed the same – it was literally just that Debbie and Pete left.”

Jonny added: “We had a debate about the comms before the sale. Peter felt that it would be a smoother transition if the clients weren’t told that there had been a management buyout. I could see his point of view, but Ifat & I wanted people to know that we had taken over and that there had been a change. We knew that clients could be unsettled but they were going to find out at some stage!”

There was also the option of further help said Ifat: “Debbie was willing to come in and help with any clients that did need it but it was all fine. Peter offered to have regular meetings to check in and get advice but we haven’t felt the need to take up the offer. Debbie said just make your mistakes and try to figure it out – making mistakes is the point of owning a business. Do it, make a mistake, learn from it and keep going. So we did that and we didn’t really call on them.”

When asked if there were any takeaways from their experience, they said: “Our own succession planning is at the back of our minds. It would be nice to do the same thing as Pete & Debbie have done but you have to think about what age are we going to be when we leave, and what age does somebody need to be to take on a practice. If we’re going to paid out over 10 years in the same way that they are, then somebody who’s already 50 years old, if they start paying us out over 10 years and then they’ve got to sell it on themselves then will that work? We’re probably the perfect age for doing this – we’re likely to have paid them out long before we want to exit ourselves. 

“We think the way Pete & Debbie did it was brilliant really – obviously they had two exceptional people to take it on! The key is finding the right people and having the right conversations. If they hadn’t had those conversations with us, then it wouldn’t have happened. 

“It’s about being open to it as well – Pete & Debbie were open to somebody else taking over and knowing when to step back so it’s the same for us. We keep trying to improve the practice and keep the team involved but if we realised that something wasn’t working – even if it was us – we’d be open to looking at it. So we’re not looking at succession planning at the moment but we’re open to recognising when change needs to happen.”

Read about the management buyout from the point of view of the sellers Debbie Story and Peter Sleigh