Greetings to Tanner H. Hicks, a distinguished figure in the global arena who boasts a multitude of titles. Revered as an investment guru, a versatile owner of multiple businesses, and an exceptional business coach, Tanner exemplifies versatility within the entrepreneurial sphere. His distinctive investment methodologies, adept risk management, and keen eye for identifying talent and business potential have been pivotal in his journey towards success. This article delves into Tanner’s unique strategies, spotlighting his adeptness in juggling diverse investments, steering businesses towards growth and prosperity, and navigating the complexities of mergers and acquisitions. His expertise predominantly lies in the realms of real estate, construction, and engineering sectors. Within this piece, this multifaceted business professional generously imparts advice gleaned from his personal experiences, offering insights into strategic integration, value engineering, and astute investment practices.
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As someone with a diverse investment portfolio, how do you approach the decision-making process when choosing between debt and private equity investments, and what factors do you consider most critical in making these choices?
Fundamentally, investment comes down to risk management. Understanding and assessing the risks, as best as you can, upfront and structuring any investments to maximize upside while minimizing downside is the art. However, with the type of investments that I make, most of the risk effectively sits with the people involved. Understanding who the key decision-makers are, what their experience and knowledge are within the sector, is crucial. For example, do the people in the driving seat possess the right credentials, mindset, and capability to drive and sustain growth? Are they high-risk takers, or risk-averse? When it comes down to the crunch as to deciding what to proceed with or not, much of that decision-making process is, therefore, based upon gut feel for whether I can trust the decision-makers to deliver the results, push the business forward, and have the right attitude and focus.
Your bio mentions that you help business owners and entrepreneurs grow their businesses through strategic integration and value engineering. Could you elaborate on some specific instances where your expertise in these areas led to significant growth and success for your clients?
I have been working closely with one client for the past 4-5 years. At the time of onboarding, he operated a small project management business, carried out the occasional small property development, and had a small property portfolio. His primary income source was via PM fees on commercial and residential projects for external clients. His overheads were high, and it just wasn’t a scalable model. He was the business. After looking at his wider business activities, I noticed he had a small portfolio of holiday lets that did well, but he was paying way too much in management costs. I suggested he pivot his focus and effectively forward integrate the management of his portfolio, then create a business that offered niched management of serviced accommodation – a market that was and is still growing in the UK. He leaned everything down, moving some existing staff on and retraining and integrating others into the new model, and has since built a highly successful property management company in Shropshire that specializes in serviced accommodation units. In 2023, he began franchising the business around the country, and I introduced him to his first franchisee in Hampshire. At the time of writing, he is currently in discussions to open his next two branches, and we are working together on a subsidiary that will help attract and educate further franchisees.
Investing in lower mid-market companies across various industries can be challenging due to the diversity of sectors and market conditions. How do you stay informed about industry trends and economic factors to make well-informed investment decisions?
In the modern day of information overload, it’s easy to become overwhelmed and almost impossible to stay informed across all fronts. That’s why my focus is primarily within the real estate property, construction, and engineering sectors. I attend a lot of networking events, as well as subscribe to a handful of industry-specific publications.
Property investment is another area you have mentioned being involved in, both in residential and commercial sectors. How do you balance your focus between business investments and property investments, and do you see any synergies between the two?
In the simplest terms, my focus is balanced financially. I target a 30/70 split between business investment and property investment respectively, reflecting the risk profiles of the two investments. There are many synergies between both as many of the businesses I like to invest in often service the property, construction, or engineering sectors, as these are the industries I know, have an extensive network, and also have personal experience in.
Mergers and acquisitions can be complex processes. When evaluating potential acquisition targets, what are the key qualities or characteristics you look for to ensure a successful investment?
The mandate focuses on businesses with turnovers more than £1m and which are at least 3 years old in either the property, construction, or engineering sectors. Ideally, there will be fixed assets and/or stock as this presents finance opportunities, and there must be a small team already in place. We look for businesses that perhaps do not have great systems in place or a lack of structure as these target companies present good opportunities to either absorb into the wider group or to flip within 3-5 years. We try to find businesses that are looking to sell primarily for retirement, as these also present great opportunities to structure a phased buy-in and/or a share retention, minimizing the upfront financial risk.
As an investor, you likely encounter both successes and challenges. Could you share a memorable experience where a particular investment taught you valuable lessons that have influenced your approach to investing since then?
A good number of years ago, I invested a small amount of money into a start-up Forex company that was started by a couple of guys I was introduced to. I was incredibly naive and didn’t know the next thing about Forex or trading on the markets. But the projections looked incredible, and I took much of what they said as gospel. It didn’t take long for that ignorance and naivety to come back and bite me when the two of them lost all the cash and did a runner. There definitely is such a thing as “too good to be true.” This taught me a big lesson about understanding the business model and getting to know who you are fundamentally investing in.
