My Worst Investment Ever Podcast Simon Bedard – Make Your Contracts as Airtight as Possible
BIO: Simon Bedard is the CEO of Exit Advisory Group, a boutique M&A firm, that also provides a range of advisory services focused on exit strategies and how to maximize company value.
STORY: Simon had a client who convinced him to change the terms of their contract. The change worked in Simon’s favor because he made $2 million after delivering his services instead of the low seven-figure he had quoted. Unfortunately, the client now felt this was more than he expected and refused to pay up.
LEARNING: Make your contracts airtight enough to cover you during conflicts. A contract is important but doesn’t have to be everything.
“If you don’t understand all the elements of your contracts, then you’ll make decisions on flawed information.”
Simon Bedard
Guest profile
Simon Bedard is the CEO of Exit Advisory Group, a boutique M&A firm, that also provides a range of advisory services focused on exit strategies and how to maximize company value.
Simon’s experience spans over 20 years in the finance, investment, energy, and technology sectors. As an entrepreneur, Simon has started, bought, and exited his own companies. He has also worked for one of Australia’s largest banks as an investment advisor to high-net-worth clients and private companies.
Simon’s passion is helping business owners understand where they want to be, then building a business that can get them there.
Worst investment ever
Simon’s company had this particular client that they wanted to work with. The company negotiated a contract and put a standard fee based on the valuation they did. This was a solid seven-figure. The client came back and renegotiated the contract wanting a sliding scale with the aim of getting Simon’s company to push for higher valuations.
He told them that this was unnecessary because his firm is motivated and would do the best possible work. But because the company could make more from this deal, Simon accepted their terms.
The company went on to deliver more than the client expected. By the time it came to getting the deal done, the valuation was probably 50% higher than the client initially thought. And so, Simon’s fee went from a low seven-figure to over $2 million.
Now the client didn’t want to pay. They went down the path of just blatantly making up lies and never paid up.
Lessons learned
- When structuring your contracts, make sure that you include things that you are willing to accept and not accept and make sure it is tight.
- When getting into a contract, do a basic scenario analysis of good and bad outcomes and how clients are likely to react to certain things.
- Be wary of making your contracts super tight and aggressive because every deal has different underpinnings. Know what you can afford to give up to keep both parties happy.
Andrew’s takeaways
- Contracts only matter at the point of conflict. So make sure you’re protected from that.
- A contract is important but doesn’t have to be everything. Things change, and you can always talk, resolve issues, and modify a contract if necessary.
Actionable advice
Whatever you invest in, make sure you spend time assessing all the variables and understand where the risk sits.
No. 1 goal for the next 12 months
Simon’s number one goal for the next 12 months is to find good solid advisors and people to join his team and help us have the kind of impact we want to have.
Parting words
“Be kind to yourself and to the world. We need more kindness.”
Simon Bedard
[spp-transcript]
Connect with Simon Bedard
Andrew’s books
- How to Start Building Your Wealth Investing in the Stock Market
- My Worst Investment Ever
- 9 Valuation Mistakes and How to Avoid Them
- Transform Your Business with Dr.Deming’s 14 Points
Andrew’s online programs
- Valuation Master Class
- How to Start Building Your Wealth Investing in the Stock Market
- Finance Made Ridiculously Simple
- Become a Great Presenter and Increase Your Influence
- Transform Your Business with Dr. Deming’s 14 Points