GUEST COLUMN:
Matthew Tossell
Co-founder and Chairman
Tailwind Group
There is a tendency in business to equate progress with growth. More turnover, more people and more customers are all visible signs that a company is moving forward, but none of them necessarily tells you what that business is really worth.
When I established Tailwind with my co-founders Angharad Neagle and Nigel Griffiths just over a year ago, we initially thought of it as a growth consultancy. The assumption was straightforward: businesses would come to us because they wanted help getting bigger. It did not take long to realise that the issue founders were describing was more fundamental.
They were saying: we know this business could be better than it is. We know the profitability should be stronger. We know we have most of the constituent parts, but somehow the business is not translating them into the value we believe should be there.
That is the value gap.
Growth may form part of closing it, but so can stronger cash conversion, better reporting, more effective management structures, clearer governance, stronger leadership depth or removing an overdependence on the founder. The important question is not simply whether a business is growing, but whether it is becoming more valuable and more resilient as it does so.
And crucially, owners should be thinking about that long before they expect to sell, raise capital or hand the business to somebody else.
You do not always get to choose the timing of a capital event. We have spoken to business owners whose circumstances have changed suddenly because of events within their families. A company which somebody expected to own for another ten years may unexpectedly need to be sold or passed to another generation.
That is why founders should aim to operate as though they might have to demonstrate the full value of their business tomorrow. That does not mean preparing permanently for an exit. Quite the opposite; it means building a stronger business in the first place.
My own experience at Hugh James shaped much of my thinking around this. When I joined, it was a regional firm operating from a number of small offices around the South Wales Valleys. Over the years, we professionalised the management structure, consolidated the business, developed new service lines and expanded beyond Wales. The firm eventually became one of the UK’s top 100 law firms.
That experience taught me that increasing enterprise value is rarely the result of one dramatic decision. It comes from repeatedly examining how a business operates, identifying where it is being held back and then doing something practical about it.
There is also a wider Welsh economic argument here. If a founder stops short of what their business could realistically achieve, the consequences do not end with their own valuation. A larger and stronger business can employ more people, develop more leaders and create opportunities for those coming behind them.
One of the most rewarding parts of my legal career was seeing people recruited locally at junior levels go on to run significant parts of the business. Those opportunities exist because the firm created the room for people to progress.
Wales needs more companies doing that.
For founders, the first step is therefore not asking how quickly they can grow. It is understanding where value is currently being lost and what is preventing the business from reaching the position it is capable of occupying.
Once you can see that gap clearly, the conversation about what comes next becomes a great deal more useful.
