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Why we chose BGF to fund our buy-and-build strategy
In 2019, BGF backed Operam Education Group, a recruitment agency in the education sector. Follow-on funding was provided in 2022 to continue a successful buy-and-build strategy. Here, CEO Eddie Austin explains why BGF was the right partner.
Why did you choose BGF?
Right from the beginning, BGF was extremely interested in our business. The team’s strong interest encouraged us to reframe our business model – a buy-and-build strategy. This was hard to articulate to investors in the early days, as we were doing something that had never been done before in our sector.
The team at BGF wanted to know more about our business, as well as our management team and what it would look like moving forward. These questions made us think long and hard about our future direction and gave us the confidence to build that relationship with them.
Three years on, that relationship is as strong as ever. I’m proud to talk about how it has grown.
When did you realise you had made the right choice?
When you’re looking for an investor, particularly at the ‘beauty parade’ stage, you want to know how they’re going to behave. You want them to support your strategy, or help you change it if it doesn’t go according to plan. During COVID, in particular, we really had to trust that relationship. I can honestly say that not only was the relationship strong in good times, it was exceptionally good in the bad times.
How important was the availability of follow-on funding?
Our entire business plan is predicated on buy and build. We acquired our first business using debt funding, but given our business model it was a necessity to secure longer term funding, as well as follow-on funding, to sustain the business. As such, it was critical that BGF trusted our buy and build approach, which we have firmly committed to in the last five years.
I’m happy that BGF took a leap of faith with us. We had a small business and have turned it into a business of significant size with their support.
What do you credit for Operam’s success to date?
There are so many value levers in our success, whether it’s people or proposition – and we have both of those. Ultimately, success comes down to the delivery of our business plan and having a purpose in our plan. That’s where environmental, social and governance (ESG) becomes important, particularly, in our case, the social aspect of ESG. For us, success is about being able to achieve what we set out to do, but to also make a real difference to our clients. And we see that every day.
What’s next for Operam?
We’re currently at the end of part two of our plan, where we have complete geographical coverage from the Midlands to the North through acquisitions. We’re now looking at what next, in terms of growth, whether that’s territorial, or through expanding our service offering. For me, it’s very much about sticking to the knitting at this point and maintaining an overview of the business.
It’s essentially more of the same, but now we have more credibility when knocking on the door of potential businesses to acquire, knowing that people now answer that door.
What advice would you give to other business owners embarking on their funding journey?
It’s important to take a helicopter view of the areas of the business that need investment, and ask whether you have the right management team and management plan in place to accelerate that investment.
Very quickly, you go from an owner-managed business to an investment-led business. You need to be able to accept that change in structure from day one – it’s not about giving away your business, but rather about encouraging someone to come in, provide a different perspective, and help you to grow.
It’s also vital to ask as many questions as you can of as many people as possible. When I see that another business has made a successful acquisition in the market, I reach out to those business leaders to understand about the pain points and successes of the deal. BGF has really encouraged me to do that and engage with the wider business portfolio.
Importantly, when people are thinking about embarking on an investment journey, you need to remember that it’s about a triangulated investment relationship, including your banking partner. You have to ensure you nurture those relationships, while making sure you have a strong finance team in place.
What lessons have you learned through the investment process?
As a business, we’re in a constant state of learning and evolution. Our management philosophy is “learn, adapt, evolve”. However, what I’ve learned during this process is about how to be resilient and never give up. In the early days, there were investors who shut the door on us and didn’t think what we wanted to achieve was possible. BGF taught us to be brave and reinforced what we believed in as a business.
Because of that, they’ve supported us through significant milestones, such as considerable investment in technology, while helping us to revolutionise the way in which we operate as a business, particularly through the pandemic. They had the faith that when the world came back, we would have a V-shaped bounce, and that’s exactly what’s happened.
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