I have been involved in two companies where I was an equal shareholder, and another company where I had sole ownership. The joint shareholding companies include an IT company, which was focused on bringing a technological evolution to the Malta Stock Exchange, prior to when online trading existed. The second joint shareholding company involved the management of boutique hotels. I was also a sole shareholder of Casa Rooms, a residential property management company.
First liquidation
In relation to the first venture, that of stock trading, it failed early in its inception. From my perspective, I assume that I was a bit too immature (myself 19 years old), and myself and my partner’s relationship was more that of being friends than business partners in the venture. Although we had a clear goal, that of technologically democratising Maltese trading, our implementation was lacking. One of the key drawbacks that hindsight provides is that I don’t believe we had clearly defined where each other’s roles started and ended. I’m writing this 15 years later, so it’s only a snapshot of memories. After having some initial difficulties to launch, and struggling with a proof of concept, we had gone our separate ways.
I’m pleased to say that today we are still great friends, which in a small market environment is something to truly cherish.
Liquidation process
For those interested to know, liquidating a company in Malta is a one year plus process and three times more expensive than setting up a company, which involves being de-registered with the Maltese authorities, closing bank accounts, appointing a liquidator, finalising of any audit/s, publications in the local press and other intricacies. Your liquidator will be in a strong position to guide you on the process of closing up any company.
Company sale
Casa Rooms was my venture where a lot of blood, sweat and tears were endured. It was a company focused on the management of short-let and long-let accommodation. It was my true baptism of fire in entrepreneurialism. The decision to sell the company had been decided two years prior to it happening, when I had realised that the market is not large enough for my goals, and that my passion for the business had significantly declined.
I had initiated the sale process by first reaching out to a couple of key employees but the general feedback was that they were fine with the status quo of simply being employees. I had then embarked on an outreach exercise with third parties, and persons who had shown an interest in acquiring the business in the past.
Throughout the sale process, I had made the collective decision to continue growing the business and investing in it, knowing that a sale will take its time. The employees throughout this period needed to be motivated, and there is no greater motivation than growth. Throughout this period, we had also updated all of our IT systems, expanded a complimentary line of business, whilst continuing to register 20% year on year growth.
After two years of searching, I finally reached an agreement with a competitor to acquire the company.
Second liquidation
My second liquidation which is now nearing conclusion, relates to the boutique hotel hospitality management company. I had been fortunate enough to partner with a tried and tested professional in the management of boutique hotels. From a partnership perspective, this assisted me to skip at least three years of deep learning, and achieve profitability from day one. The liquidation happened at the onset of COVID-19, coupled with my then disillusionment with the hospitality industry.
A number of factors led to initiating the liquidation, including:
- Having been burnt out by the past 6 years of building up Casa Rooms and launching the boutique hotel element venture.
- As with any partnership there were challenges that were mainly overcome, such as,
- whether to leave a higher cash balance in the bank accounts, versus distributing it to shareholders;growth strategy i.e. did we want a fast or slow growth company;pricing strategy i.e. should we price ourselves low to build up market share or ensure that we have a higher profit margin on every account; determining a delineation of where one partner’s role ends and another begins;how much should each partner be paid; should we employ a team and at what stage;
- finally, what was the ultimate vision, for the organisation.
The truth is that we hammered out a lot of these aspects before we launched but in the craziness of chasing clients, collecting payments, and a drive to go to the next stage of the company, very often the working relationship can suffer.
The truth is, we liquidated a profitable company, that had value and could have been sold to a third-party. However, in the wild beginning of the COVID-19 pandemic, we also weren’t too sure on how the business would survive, especially since we had revenue sharing agreements with our clients, and ultimately, no revenue was being generated at the time.
Whilst the decision to liquidate the company was tough, till today my business partner and I can count on a solid friendship with many common interests.
Conclusion
My partners of the various entities have their own side of the story, and I’m sure they may not have been too pleased with my input at times. Whilst we had our differences and challenges, I also learnt a lot from them. Undertaking a business is a communal effort whether it is through a partnership or by having employees (who today have numerous opportunities).
Knowing what I don’t know, there is still a lot more to learn. With idisav and its focus on collaboration, there is bound to be growth for joint ventures, and optimising the relationship structures for a joint benefit.
idisav 