Episodes

After nearly 3 years of doing his podcast, Marvin has been faced with an opportunity to pursue his post-exit dreams. Listen to Marvin explain the importance of having a post-exit plan, his thoughts on the podcast thus far, and his plans for the future of the podcast.

While the podcast may be on pause, for now, there is an endless archive of shows for you to listen to and continue to educate yourself on how to maximize the value of your business.

As the web developer and producer of Marvin’s podcast, it has been a pleasure working with him and creating the podcast. It has been very amazing to watch it evolve into what I think is the best podcast for encapsulating the dos and don’ts for a business exit. Not just from the perspective of the business brokers who facilitate these deals, but also from Marvin’s ability to process this information and present it to you in an easily digestible form. I learned quite a lot.

Marvin L. Storm
BXAdvisors
California
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Podcast: Play in new window | Download (Duration: 13:14 — 12.1MB)

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An offer was made on a client’s business by a strategic buyer and through the application of both skill and using the strategic buyers own financial metrics convinced the buyer and their advisors that it was to their benefit to pay not two or three, but four times more than their original offer to acquire his client’s business.

A race car driver took his skills from the racetrack into the board room and built a successful company that became well known in the aftermarket auto performance industry where the need for speed is important, and to make a bundle of money doing it. However, as with a lot of entrepreneurs that have a specific skill set, the managerial complexities often overtakes them when the rigor of managing a growing business is not in their wheelhouse. When this happens, burnout can set in.

An event planning business had a more than fair offer on the table but the entrepreneur hesitated and didn’t take the offer because he felt he could get more for his business. Shortly after turning down this offer, their revenue dropped over 95% because of unforeseen circumstances. Although the business survived, it is going to take years for the entrepreneur/founder to rebuild his business. A difficult task for someone in their sixties.

Also, on this episode I have invited Diana Murphy, a mindset business coach, to join me to help me do a deeper dive into how entrepreneur/founders can optimize their value of their business when positioning it to sell. 

Be sure to listen to my post-mortem discussion with Diana at the end of the podcast.

Bob Tankesley
Neri Capital Partners
Atlanta, Georgia
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Podcast: Play in new window | Download (Duration: 1:12:36 — 66.5MB)

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An importer of garden plants and supplies that was growing at an intense rate and making tons of money still couldn’t get their business sold or find a buyer until an advisor approached the problem and came up with an interesting solution.

A third generation security and door hardware distributor that was the premier value-added distributor in the industry and was charging double what their competitors were charging. With help from an advisor, they were able to leverage trade secrets that even the current third generation owners didn’t really understand to get a sky-high valuation for the company. 

Michael Richmond
The DAK Group
Rochelle Park, New Jersey
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Podcast: Play in new window | Download (Duration: 30:56 — 28.3MB)

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A company that manufactured orthopedic implants for pets was growing and profitable. However, getting this company positioned for an exit and finding the right acquiring company proved to be an extraordinary challenge that required some insightful thinking.

Two women 25 years ago open a small retail bakery that makes sweets in the form of cookies and muffins. They opened their first bakery shop in Harlem in NYC and over time grew their cookie and muffin business to six locations. They were approached by a Private Equity Group who made a great offer. With the help of an advisor it increased the offer by nearly 40% seemingly out of thin air.

Michael Richmond
The DAK Group
Rochelle Park, New Jersey
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Podcast: Play in new window | Download (Duration: 31:28 — 28.8MB)

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A business that was given birth after the breadwinner in the family was laid off. To make ends meet, the breadwinner’s wife started cleaning houses. Because she was allergic to many of the chemicals that are commonly used in household cleaning supplies, she began to use organic cleaning supplies and then promoted her organic orientation on social media. The business exploded and then after building a highly successful business they decided to sell. To their surprise, even though they were making a lot of money and had sales and profit growth year after year, they couldn’t get an SBA loan approved.

A entrepreneur with multiple streams of income didn’t file their income taxes separately for each business and it cost them the ability to get their sale financed with an SBA loan. Find out why.

Linda Broom
Transworld Business Advisors
Dallas / Fort Worth Central, Texas
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Podcast: Play in new window | Download (Duration: 25:27 — 23.3MB)

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A family-owned retail produced market that procured its fruits and produce from local growers. The family had operated the business for 10 years and as the kids got older and started to leave for college, they didn’t plan on continuing to work in the business. Which is a common theme for many family-managed businesses these days. One of the stipulations that the seller required was how long they would stay and be available for training. This stipulation triggered the domino effect.

An entrepreneur did all the right things to position their business for a successful exit. However, as is often the case, one critical thing was overlooked regarding key employees that nearly cratered the sale at the last minute.

Linda Broom
Transworld Business Advisors
Dallas / Fort Worth Central, Texas
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Podcast: Play in new window | Download (Duration: 30:28 — 27.9MB)

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A fitness business franchisee of a national franchised fitness center accepted an offer from a qualified buyer. While excited to be stepping away from his business as he had other business opportunities he wanted to pursue, he made an interesting terrible decision before the business sale closed escrow.

A buyer for a 19-unit fitness business hired a firm that specializes in performing due diligence for buyers and invested over $100,000 with this firm. Normally, when a buyer invests this much money into doing due diligence in a transaction, they are generally very committed to seeing the transaction through to closing. Things turned out quite differently.

Some franchisees of national brands such as McDonalds often acquire other franchised brands due to a secret of having a multi-brand strategy. 

Why franchisors often are unable to help their franchisee partners exit their business and why franchisees are often better off finding an expert to help them sell their business vs. the franchisor.

Jon Franz
Franchise Clearly
Winter Park, Florida
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Podcast: Play in new window | Download (Duration: 37:04 — 33.9MB)

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A family-owned business that had been successful for decades was turned over to the founder’s son. While succession planning was a part of the long-term plan for the founder, the execution of the plan didn’t go as planned. 

Two companies with similar issues when being positioned for sale and how the two founders handle their exits in dramatically different ways and with equally as dramatic results. 

How fraud by a partner nearly bankrupted a company but because the right things were done to build creditability and trust with buyers, the company had several buyers lined up to purchase the company.

Mike Kendall
Kendall Capital Group
Chesterfield, Missouri
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Podcast: Play in new window | Download (Duration: 52:17 — 47.9MB)

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A major league baseball team was brought to Denver and the details of how a transaction like this goes forward. 

A hyper growth company that was doubling sales every year outgrew the capabilities of some members on their management team. An owner often tries to show loyalty and does everything possible to keep those that helped build the company in the early stages employed with the company.

A family tragedy forced the wife, who was a marketing director for a company, to become the CEO, a position she wasn’t trained to do. As CEO she turned down an acquisition offer and the outcome will surprise you. 

A company founder was able to sell his company to a large multinational firm for a bundle and then buy it back for pennies on the dollar five years later.

Bill Shenkin
CeFO Inc.
Englewood, Colorado
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Podcast: Play in new window | Download (Duration: 43:44 — )

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A partnership business went from a consistent year over year growth rate to a valuation of zero in a few short years.

A family owned 30-location retail service business that had passed to the second generation. As it came time for the third generation to decide if they were interested in taking over the business, several of the minority shareholders sold their shares.

How a businesses during the pandemic when listed for sale had ample suitors for their business and how they decided on which buyer they wanted to carry on the legacy of the business with and finally accepted an offer that wasn’t the first or best offer.

A consulting business which is normally a more difficult business to sell because the consultant often builds the business around them. This entrepreneur found out a way to optimize their exit.

Van Daughtry
Van Daughtry Consulting, LLC
Raleigh, North Carolina
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Podcast: Play in new window | Download (Duration: 47:15 — 43.3MB)

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A medical research company was founded by research PhDs and had a highly complex business model that relied on highly paid professionals which performed and managed the medical research. While the business generated millions in revenues, the cost of the highly paid staff produced an EBITA in the low six figures.

A label manufacturer’s divorce and other lifestyle changes necessitated the sale of the business and at the same time there was a longshoreman’s strike that blocked critical shipments he needed from Asia. The strike proved catastrophic and devastated sales, yet the entrepreneur was able to find the right buyer even though revenues continued their downward spiral.

A niched hearing enabling manufacturing company was positioned for a successful exit by properly structuring the offering memorandum. The amount of money the business made was not as important as the story told regarding the exit which attracted the right buyers.

A third-party logistics company had a location that was losing substantial revenues and how the losing operation was positioned as a reason for someone to buy the business. This skillful positioning is something required real insight to craft a story that supported what most buyers would have seen as a huge negative and turn this into the primary reason the acquiring company.

Bob Grewal
Seapoint Business Advisors
Westlake Village, California
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Podcast: Play in new window | Download (Duration: 52:52 — 48.4MB)

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An ecommerce business that was two businesses in one and how the lack of understanding and accounting of inter-company transfers not only nearly derailed a deal but almost cratered the entire business. The importance of having a CFO, either a fractional one or full-time one, and how this can make the difference between a successful company and an exit or a failed company and a botched exit.

The sellers of a business felt that their business was worth a lot more than the financials showed. Different types of buyers will pay different prices for the same business and how the bank really sets the price if the deal is going to be financed.

Entrepreneurs that have a service-based business often fail to realize that when selling a business what they are selling is primarily goodwill because the assets are only a small fraction of what the business is valued at. A buyer is really buying the cashflow that is produced by the employees, management, and systems that are in place vs. the trucks, tools, and equipment. 

A seller folded to a company that was willing to overpay for the business because they wanted the skill set of the owner. They offered him a sweetheart deal and his dream job to oversee their entire business.

Richard Gadberry
Murphy Business & Financial Corporation
Dallas, Texas
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Podcast: Play in new window | Download (Duration: 47:27 — 43.4MB)

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A founder of an oil rig manufacturing business started meeting with a buyer on his own and his M&A Advisor cautioned him not to negotiate any of the agreed upon terms. He was also told to follow the plan that had been developed on when to share the sale with his employees. Find out what happened when the owner chose to ignore this advice.

A company that had 65% of their business come from one customer even though it was a large multi-national company, and how this nearly cratered the deal but was eventually salvaged. 

A business worth $30M ended up being sold for a piddly $1.2M due to a few critical mistakes.

How finding the right buyer and the right seller can be a match made in heaven and how a catastrophe was avoided when the time was taken to make the right match.

Michelle Seiler Tucker
Seiler Tucker
New Orleans, Louisiana
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Podcast: Play in new window | Download (Duration: 46:34 — 42.6MB)

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A profitable HVAC company decided to explore selling their business because COVID had escalated valuations in the HVAC sector since more people were staying home and needed more heating and air services. Shortly after deciding to sell, a Private Equity Group approached the company and began their acquisition and due diligence. Financial buyers like a Private Equity Group have key aspects they look for when acquiring smaller companies.

A client makes an assumption that turned out to be dead wrong. Not following some basic steps could be the worst mistake during the sale of your business.

How millions and millions of additional value can be created by simply recruiting the right advisors to be on your team.

Often entrepreneurs only think about taxes after their deals close. Learn why this is an awful strategy and with a pinch of planning you can substantially improve your net after tax returns.

Glenn Henderson
CCK Strategies
Frisco, Texas
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Podcast: Play in new window | Download (Duration: 50:13 — 46.0MB)

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An orthopedic footwear manufacturer was able to weather a series of unexpected events, failed closings, and a complete shutdown during the pandemic to successfully exit the business.

A seller went from a DIY mode to engaging a professional advisor to facilitate their exit and this decision made the founder an additional $20M in the process, which was nearly double the initial exit value in the DIY transaction.  

A pet insurance company was able to make a strategic decision early in the acquisition process that allowed them to entertain other offers allowing them to substantially increase their exit value and in a fraction of the time. 

How rolling a portion of equity into an acquiring entity of a new company that operates your company after the transaction closes enables entrepreneurs to substantially increase their total exit value. In this example, a 1X investment into the new company ended up returning a 10X return in a few short years.

Michael Butler & Joshua Curtis
Footprint Capital
Columbus, Ohio
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Podcast: Play in new window | Download (Duration: 1:00:32 — 55.4MB)

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An e-commerce business where some of the metrics on the financial statements just didn’t seem to add up. One of the issues had to do with the gross margins on some of the products sold being north of 75%, which was far above the norm for this business segment. This issue caused the buyer to dig deeper.

How being transparent can cut both ways, but not enough or too much transparency can both kill deals. 

A transaction that took place during COVID and how top-tier execution doubled the value of a restaurant when other restaurants were failing left and right.

A 35-year-old landscaping business failed to monetize its full enterprise value and why the seller wasn’t upset about this and, if you were in this position, why you probably wouldn’t be upset either.

Lauren Drummond-Dale
Coastal Consultants LLC
D’Iberville. Mississippi
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Podcast: Play in new window | Download (Duration: 39:45 — 36.4MB)

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A chemist that solves a problem his wife had with some of her hair and cosmetic beauty products line while working full time. His side hustle turned into a business that exploded into a $19M business virtually overnight. Hyper growth when scaling nearly forced an early exit and disaster was averted. 

An absentee owner business was acquired and how leverage was used to get a 10X return when properly managed. 

A high school graduate that made money mowing lawns turned this part time job into a multi-million dollar exit by smartly building his business a day at a time and planning his exit like a pro. 

An entrepreneur deciding not to go to medical school was probably a smart financial decision. While most doctors were finishing up their residency and beginning their medical practice, this entrepreneur had banked over $15M on the sale of his medical tech company. 

Matt Wochele & J. Snypp
Preferred Brokers, Inc.
Atlanta, Georgia
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Podcast: Play in new window | Download (Duration: 50:40 — 46.4MB)

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A specialty heavy equipment company that dominated a highly profitable niche decided to sell. A private equity firm suggested by the M&A advisor expressed interest and made a generous offer. However, the seller’s attorney had dealt with this Private Equity from before and had formed some opinions on them. What shouldn’t have happened, ended up happening and it derailed the deal.

How 50/50 partners had taken over a company from the founder’s family and although they were good at their jobs in the company, they weren’t naturally born entrepreneurs and make rookie mistakes as new owners that brought the company to the brink of insolvency. Yet they went from a few hundred thousand dollars to delaying their exit and selling the business for millions and retaining equity in the company that was later sold for millions more.

How a creative deal structure can take a company with multiple revenue streams and package each of these revenue streams to different buyers with an agreement for future collaboration. This resulted in an exit value being worth more than if the company with all of its revenue streams had been sold to a single buyer.

Joseph Guarino
LINK
Lancaster, Pennsylvania
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Podcast: Play in new window | Download (Duration: 48:42 — 44.6MB)

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An entrepreneur decided to sell his business, and then when he was at the closing table, backed out. He did this not once but twice.

Three partners with equal ownership in a business they ran for decades had different goals and objectives which caused an extended five-year process of getting the business sold.

Russian immigrants that built a successful business not once, but twice and how one their businesses became a lot more successful than the other. They decided to sell the first business to focus on the more profitable one. Sometimes focus is the key to ultimate success.

An entrepreneur that started a business in college and grew it over decades until a diagnosis of cancer changed everything.

Paul Visokey
Stony Hill Advisors
Philadelphia, Pennsylvania
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Podcast: Play in new window | Download (Duration: 40:36 — 37.2MB)

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A business owner’s lack of transparency with his M&A Advisor ended up taking his business sale from a sure deal to zero and the IRS killed this deal without breaking a sweat.

A buyer walked away from a deal allowing the seller to re-sell the business again in a matter of months and keep all the sales proceeds from the first deal in a practice called double dipping.

If you are growing your business through acquisitions, regardless of how messy an acquisition is, these can become your most profitable deals.

Taking reasonable risk in selling your business can turn out well for all parties if you manage this type of risk prudently.

Eric Gagnon
We Sell Restaurants
Palm Coast, Florida
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Podcast: Play in new window | Download (Duration: 53:44 — 49.2MB)

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Why working capital requirements can often be used strategically by buyers as they are designed to reduce the effective sales price of a business. Unaware sellers can be surprised when they end up with a lot less than they anticipated because they allowed the working capital to be manipulated either by how working capital was defined or the amount required. 

A business went from $50M in sales to ceasing operations and was still sold for a considerable sum. When you know where the intrinsic value in a business is, the business can still be monetized, even as a non-operating entity. 

A tool that every entrepreneur and their advisors should use as they evaluate offers to gain insights on what the net after tax proceeds are going to be after the sale.

Using multi-state tax arbitrage to reduce taxation on sale proceeds if you can do advanced tax planning. This is especially important if you live and operate in a high taxation state. 

Roman Basi
Advanced Accounting
Lambertville, Michigan
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Podcast: Play in new window | Download (Duration: 51:02 — 46.7MB)

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Although a comprehensive tax plan was painstakingly crafted and designed, a client went dark for nearly nine months. Less than a week before the sale was to take place the client called and asked if everything was ready to go. A significant portion of the tax planning strategies that had been crafted couldn’t be executed or implemented in a matter of days.

Four partners in an Amazon e-commerce business positioned their business for sale, it was discovered that they had no written partnership agreement and only a handshake gentleman’s agreement. As the business moved towards the sale the lack of a decision making mechanism became problematic.

A husband and wife team that had started a business as a side hustle eventually turned it into a full-time business and eventually an eight figure exit. They had done extensive tax planning for their estate and had planned on leaving a bulk of their estate to their favorite charity. What they didn’t realize is they could do the same while they were living and save millions of dollars in taxes when they sold their business, and then have those tax savings benefit their charity.

A young woman who was 22 years old and a freshman in college started a business targeting her peer group. After growing her business for a few years she wanted to sell her business and go back to college. An exit strategy and a tax plan was crafted to eliminate all $87,000 worth of taxes and use those savings to fund her college education.

Shanyn Stewart
Advanced Accounting
Lambertville, Michigan
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Podcast: Play in new window | Download (Duration: 45:29 — 41.6MB)

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A transactional story of an infrastructure construction company that was equipment intensive and had accumulated nearly five times more equipment on the books than it needed. While the company has strong free cash flow, the amount of equipment on the books made it a difficult to capture anything above the equipment book value on the balance sheet. How it was positioned while nearly impossible to sell to literally doubling the business value and getting it sold quickly, far quicker than the seller ever thought possible.

A retailer that had 75% more inventory than it needed, making the business difficult to sell. How a strategy called an owner financed floor plan allowed both the buyer and sell to make out like bandits.

How any business owner that has deals in the pipeline should structure their sales allowing them to capture some of this future revenue as well as benefiting the buyer with free financing.

An entrepreneur who made it a practice to always take a significant amount of cash out of the business by not reporting cash sales, and how after he sold the business, this practice literally got him seven years in the state penitentiary.

Bob Ross
Fuller-Ross Group
Plano, Texas
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Podcast: Play in new window | Download (Duration: 37:34 — 34.4MB)

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A commercial janitorial business dramatically increased their gross margins and profitability the year before it sold. However, the source of the profits wasn’t from excellent execution or dramatically increases sales. When the buyers found out why the performance was so good, they sued the seller.

A juvenile based sports manufacturing and import company had multiple offers on the table but decided to aggressively the countered all the offers. The counteroffers were all rejected. A year later the business was sold for the book value of inventory.

Get multiple strategic bidders at the table and interesting things can happen. Sometimes being in the right place at the right time just happens. You can’t plan for it, but when it happens you need to focus on not doing something that will screw the sale up. 

Ian MacLachlan
BTI Group
Santa Cruz, California
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Podcast: Play in new window | Download (Duration: 38:14 — 35.0MB)

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A highly profitable business services company that has five highly qualified partners in the business handling the key functions of the company. These partners were committed to the business and worked 70-80 hours per week for years. Yet even though this company was highly profitable, it turned out to be unsellable.

A $35M tortilla company with millions in profits company that couldn’t be sold due to critical strategic mistakes that the entrepreneur made.

The wrong attorney nearly crashed a deal and only when the attorney was fired, did the deal close.

How having the right advisor that positions the company properly generated ten offers with the competition for the deal heating up, causing the offering price to escalate and the terms get better for the seller. 

Gerald Kong
Trinity Transaction Advisory, LLC
Dallas, Texas
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Podcast: Play in new window | Download (Duration: 56:31 — 51.7MB)

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Why the FBI, DEA, and state regulatory agencies descended on a business and why this didn’t bother the right buyer.

How the wrong business intermediary can create mistrust and derail a deal in the blink of an eye, making it impossible for a buyer to acquire the business, even though it was a great business. 

A multi-million-dollar liability that the seller didn’t know existed was uncovered in due diligence and how the buyer structured the deal to mitigate this liability to get an impossible deal done.

A deal went from the first phone call to closing in 10 days flat. Why motivation is the grease that oils the skids to get deals done when there is a deadline.    

Dennis Buck
Chapman & Associates
Baltimore City, Maryland
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Podcast: Play in new window | Download (Duration: 47:45 — 43.7MB)

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A family operation with three kids never had a disagreement while mom, the matriarch of the family, was around. However, when she unexpectedly passed away, the kids spent the next 10 yrs. and $5M in legal fees trying to sort out their differences.

A rags to riches saga where a family business, again with three kids, was devastated when the US Gov’t facilitated the confiscation of their business. 

Sometimes succession planning is just not possible because of the personalities that exit within the family – and in this case, how a sociopath can create a literal wall to getting any succession planning done.

Why 50/50 partnerships are not so nifty and how to avoid a deadlocked decision-making situation that can destroy a business.

Lloyd & Champ Rawls
Rawls Group
Orlando, FL
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Podcast: Play in new window | Download (Duration: 46:52 — 42.9MB)

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A business card in a shirt pocket that was visible to others, helped dramatically increase the value of a deal when one of the buyer’s realized that their major competitor was bidding on their deal. Within 24 hours after they realized this, an offer was submitted that was substantially higher than anticipated. 

How Covid has altered how deals are getting done and how smart sellers are stepping back and realizing that it is a different day today and that deals can still get done if you can work through deal structures that are tailored for both buyers and sellers.

How smaller companies can add huge strategy value to larger companies with their value proposition and why it’s important to understand what value you bring to the table because this understanding can dramatically increase your company’s value.

Why it’s important for sellers to realize what they do well and not so well and if what they don’t do well can be done better by someone else, it may be time to sell.

David Kauppi
MidMarket Capital Inc.
Chicago, Illinois
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Podcast: Play in new window | Download (Duration: 42:07 — 38.6MB)

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A 4^th generation business started in the 1890’s. As you listen to this deal story you will learn how the new owner was able to double the business in less than a year. 

A lower valuation on a business appraisal can dramatically change the economics of a deal, but how, if you understand the reasons an appraisal comes in lower than anticipated, you can actually get the appraiser to change their valuation, something that rarely happens. Knowing how the valuation was arrived at can actually help you in presenting a case for a higher valuation.

One of the things that all sellers and buyers need to be aware of when selling or acquiring a franchise business. Knowing some of these issues in advance can actually avoid a lot of problems when dealing with a franchise business during the sales process. 

A business that was acquired seven years earlier as an asset sale, which means that the business was purchased for pennies on the dollar for the discounted value of assets, and how the owner returned seven years later with a business that had grown 100x in sales and sold to a buyer who was going to take the business to the next level again.

Haroon Bhatti
Capital Business Brokerage
Farmington Hills, Michigan
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Podcast: Play in new window | Download (Duration: 45:30 — 41.7MB)

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A family run business with decades of a history with an elite clientele that provided cleaning concierge service for Broadway theaters by cleaning stage garments and costumes for all of the theaters in the Broadway Theater district. The family grew the business to a nearly 8-figure a year business and was flying high until COVID hit and most of their clientele left the city and all of the theaters closed. The pandemic hit the business hard eventually forcing it into bankruptcy.  Yet with the right help a deal was structured to not only salvage the business from the brink of extinction, but to generate millions for the family on the sale of the business. 

The importance of having a management structure in place can facilitate a deal by creating a demand for the business. 

A transaction that created millions of additional value by structuring a deal that not only increased the initial exit value of the business but double that amount again by allowing for the preverbal second bite. 

This was made possible by having the right buyer and structuring and aligning the interests of all parties to achieve the eventual exit of a private equity buyer. 

We often hear of sad stories that are driven by the unexpected illness or death of a business owners that don’t turn out well. In this case, because of the skill of an attorney that was able to convince a family to retain an M&A Advisor, they were able to create an exit versus closing the business.

Anthony Citrolo
The NYBB Group
Manhattan, New York City
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Podcast: Play in new window | Download (Duration: 45:56 — 42.1MB)

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A founder who was selling his business had the absolute criteria that he did not want to remain working in the business after it was sold. He was burnt out and wanted to move on. So, what do you think happened and what you should be prepared for when you sell your business?

How important the terms outline in a Letter of Intent are and if a key deal point is included may save your deal, if you get it right, and if you don’t, may derail your deal.

What not to do when you have a buyer at the closing table that has you made a good offer. Too often entrepreneurs get greedy and try to squeeze a little more out of the deal.

Why business owners insist that their business is worth a lot more than what all of the offers presented. There is an accounting term called “Sunk Costs” that these sellers didn’t understand.

Dave Marx
Front Runner Consulting
Cincinnati, Ohio
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Podcast: Play in new window | Download (Duration: 42:19 — 38.7MB)

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How buyers will often research a market segment to identify companies in a specific industry or niche that is under served or has consolidation opportunities and then decide to create a platform. Building a platform is a strategy that is becoming more popular today for buyers as they seek out companies to acquire.

Small insignificant revenue sources can become a big headache in deals as well as how regulatory issues need to be taken into consideration when positioning a company for sale

Timing is a crucial issue when thinking of selling a business and how 50/50 partners that couldn’t stand each other and in fact were at a point in their relationship where they wouldn’t be in the same room together managed to sell their business.

Bob Zelinger
Hinckley, Allen & Snyder LLP
Hartford, Connecticut
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Podcast: Play in new window | Download (Duration: 47:50 — 43.8MB)

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An entrepreneur in a service sector identified a need where the sales, operations, and finance departments of his clients always seemed to be relatively inefficient. He conceptualized a customized solution that could revolutionize the service and hospitality industry. Little did he realize how perfectly his company would be positioned when COVID hit.

A young husband and wife team launched a business in the asbestos abatement industry, and again they benefited from have a business that was COVID resistant. Yet, they made crucial mistake.

A business owner that thought his landlord, and close personal friend, would renew his lease like he had multiple times over a 25-year period. Only to find out that money makes people, even close friends, do the unexpected.

A business that ran a tight ship and was organized which is unusual in the construction industry, because contractors are notorious for less than perfect operational, HR, and financial record keeping. When it came time to sell, right in the middle of Covid, the deal went smoothly when many other deals were struggling to get done.

Jay Offerdahl
Viking Mergers & Acquisitions
Charlotte, North Carolina
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Podcast: Play in new window | Download (Duration: 46:32 — 42.6MB)

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A financial services company that was a few weeks away from being sold. As the final draft of the Letter of Intent was being reviewed, after all of the terms and conditions had been agreed to by the buyer, there was just one more term to discuss with the client – a term the client wouldn’t agree to.

A technology company founded by a tech genius got right up to the closing table with all of the terms agreed to that created an opportunity for generational wealth for the founder and his family, but then the buyer and seller went out for diner to celebrate consummating the deal. That dinner turned out to be a game changer for the founder.

An entrepreneur founder was approached by a strategic acquirer. It took months for the founder to negotiate a deal only to have his attorney suggest talking to Jim before doing anything. That conversation turned out to be the most profitable phone call he ever made. 

How a business worth less than $20M turned into a cash deal of $120M. You won’t want to miss this story.

Jim Afinowich
IBG Business
Scottsdale, Arizona
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Podcast: Play in new window | Download (Duration: 53:10 — 48.7MB)

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A transaction involving a successful residential HVAC company, which is one of those industries that hasn’t been impacted a lot by the pandemic because people still need their furnaces and air conditioners. The business had a number of offers but when it came time to close, the seller had a change of heart. 

A great idea doesn’t always translate into value that can easily be monetized.

A retired military serviceman started a business and hit a home run. Interestingly, the real home run was not in the actual business that was listed for sale but in what happened during the sales process. It isn’t what you might expect from a deal that didn’t initially get done. 

A transaction where the seller was talked out of selling, which doesn’t happen all that often because the job of an advisor is to help entrepreneurs sell their business. This decision resulted in tripling the exit value a few years later when it finally was the proper time to sell.

Mike Feinman
Texas Business Brokers
Austin, Texas
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Podcast: Play in new window | Download (Duration: 39:23 — 36.1MB)

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An acquisition of a firm where the founder had a long-term strategic vision and how they wanted to exit. Because of this vision, he turned down a cash buyer. While most of the episodes on this podcast place price as an important consideration but not the only consideration, it’s rare to have a cash deal turned down and to accept 80% carry back plus an earnout.

A blockbuster deal where a firm could have acquired a billion-dollar company that was over three times the size of his firm and why it didn’t work out.

Walking away from a deal that was months in the making and where there was a lot of hard work and due diligence expense and time invested into the deal. Everything pointed to this being great fit for an acquisition but there was just one thing that wasn’t quite right.

One of his smallest acquisitions turned out to be one of the best and by far the most profitable.

Tom Hine
Capital Wealth Management, LLC
Glastonbury, Connecticut
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Podcast: Play in new window | Download (Duration: 54:11 — 49.6MB)

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In a transaction that involved a Private Equity group, the deal was structured in a way that the seller was very focused on getting his price for the sale of his business. Sophisticated buyers pick up on this and structure a deal to play to this emotional need and then build in other terms that may well take away the upfront give on the price.

A transaction that involved a different type of buyer known in the industry as a Search Fund Buyer. How search funds are structured and some of the good and bad elements of dealing with this type of buyer. 

How a lack of inventory control can raise havoc on the sale of a business as well as how buyer and seller trust in another transaction made for a sweetheart deal.

Carol Shin
Inbar Group Inc.
Greenwich, Connecticut
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Podcast: Play in new window | Download (Duration: 56:13 — 51.5MB)

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A second-generation family owned business started in the 1950’s where there was no succession plan in place had a sales price number that they needed to get for the sale of the business. Fear surrounding being able to get that number dictated how decisions were made in trying to sell the business. 

A Medical Billing company where the partners had disagreements that landed them in court and where the judge, through a court order, forced the business to be sold as a way to resolve their dispute. Their company had figured out a way to build a better mouse trap that was highly valued in the market. A strategic buyer entered the picture and what happened during the negotiations and how the actual business was not what the buyer was primarily looking to buy. 

An electrical contractor was able to head off attempts by a buyer to drive down the price of business.

A buyer’s big vision was in alignment with a seller’s willingness to help the buyer achieve this vision and why this concept of alignment is so important for buyers and sellers to understand. 

Eric Gall
Edison Business Advisors
Tampa Bay, Florida
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Podcast: Play in new window | Download (Duration: 48:11 — 44.1MB)

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Terry became a business intermediary because of his experience as a business owner when he bought, scaled up, and sold a manufacturing business.

An almost unbelievable story of a business listed for five years, one that generated over 5,000 inquiries of interest in the business, primarily because the business was a solid business with a long track record; however, the business’ big problem was that it had a vendor and revenue concentration issue. It persevered and finally got an excited and motivated buyer to the closing table. But the outcome is surprising. 

A thirty-year business that was a cash machine was listed for sale because the owner was burnt out. Yet, with multiple buyers ready to pull the trigger and make offers on the business, greed took over and lost the seller $5 million dollars. 

A transaction where a business was able to get multiple offers at a much higher valuation than expected.

Terry Altman
Florida Business Exchange, Inc.
Orlando, Florida
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Podcast: Play in new window | Download (Duration: 47:43 — 43.7MB)

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A large development property that a physician purchased out of bankruptcy during the Great Recession for pennies on the dollar. After investing an additional $20M in preparing the property for market as a turnkey real estate development, the commercial realtors missed a key component in their marketing of the business which had a proposed sales pricing in the $500,000,000 range of a proposed fully developed value of nearly $2B.

How brothers of a second-generation business were making money hand over fist and how this cash flow from the business distracted them with a result of the business being driven into the ground.

A first responder and part time entrepreneur showed his moxie in being able to conceptualize a business idea from what he noticed on the job and grew it into a phenomenal business success even pivoting the business from a wholesaler to a direct to consumer model worthy of a Shark Tank Episode. 

Two Silicon Valley tech entrepreneurs built a subscription based business in the Health IQ space and hire the right talent that enabled them to differentiate their company in a crowded health field, and then position their company to sell to a strategic acquirer that valued not only their tech but their customer list.

Adam Maoz
M&A Business Advisors
Los Angeles, California
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Podcast: Play in new window | Download (Duration: 41:55 — 38.4MB)

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A founder was so focused on his product and making it the Lamborghini in his market niche that he ignored what the market looks for when acquiring a business. While he was able to make his product really powerful, this didn’t do him a lot of good because what was important to him wasn’t necessarily what buyers were looking for in his type of business.

An entrepreneur too focused on tax avoidance and deferral costs more money than saved in taxes.

Two founders increased the value of their business over $16M in net proceeds simply because they asked for advice and then they followed that advice.

Three partners that were at different ages and over time their goals and objectives changed, but were still able to resolve this and get what they needed when selling the business.

Hank Nelson
Monadnock Advisors
Quincy, Massachusetts
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Podcast: Play in new window | Download (Duration: 53:57 — 49.4MB)

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A minority shareholder who had his own agenda attempted to sideline a deal that was ready to be closed.

A seller was able to protect himself from the decrease in the acquiring company’s stock price.

A chance meeting at an industry conference took a business from a highly commoditized business into becoming a specialty player that grew the value of the business ten times and was eventually sold well into the 8 figures.

A pharmaceutical company was assisted in properly valuing the company’s intellectual property and leveraged strategic buyers interested in that IP to turn a $50M valuation into a $200M sale.

Chris Wagner
Strategic Wealth Partners
Ohio & California
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Podcast: Play in new window | Download (Duration: 44:10 — 40.4MB)

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A transaction began to fall apart early in the due diligence process but was held together because the buyer was motivated, remained engaged, and really wanted to close the deal.

A family business with a long history of profitability was listed for sale and five buyers were ready to make offers to acquire the business, but the business ending up not being sold.

A sale with a number of buyers that made offers and for one reason or another they decided not to proceed. An axiom to live by: Some will, some won’t, so what, what’s next. A number of qualified buyers came and went but the last buyer ended up being the best one. 

A business had an offer pre-COVID and when COVID hit, the deal fell apart. However, even in uncertain times there are buyers that will make decisions and close deals.

Susan Rosner
Calder Associates
Newton, Pennsylvania
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Podcast: Play in new window | Download (Duration: 43:02 — 39.4MB)

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A commercial sign company that had two main types of customers. One customer segment was in the tradeshow, convention, and event market vertical. The other was for companies that needed exterior signs for their buildings and locations. A co-founder had 44% of the business, and an angel investor was a silent partner for 5% that provided the capital for the startup of the business. The client had 51% of the business and still didn’t have control or the final say when and how to sell the business. 

A pharmaceutical company with two 50/50 partners. One partner was mid-career and the other at the end of his career. The difference in life stages made a huge difference when it came to their exit. 

A business established in 1877 was sold when there was no viable successor because none of the four kids of the current generation were involved in the business, and even during Covid with the tons of economic uncertainty the buyer moved forward with the purchase in May of 2020 at the peak of the Covid shutdown with no contingencies, all cash, and a short escrow.

An entrepreneur took care of his four kids, when only one could run the business but the other three worked in the business and was able to treat them all equitably. He provided for his wife who had no business sense and no ability to budget or control her spending habits and yet owned 100% of the business when he unexpectedly passed away.

Matt Carbray
Ridgeline Financial Partners
Avon, Connecticut
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Podcast: Play in new window | Download (Duration: 56:55 — 52.1MB)

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A client that had a machine shop and how an environmental impact report on new building, which shouldn’t have had any environmental issues, ending up being a major factor in cratering a deal. 

An equipment manufacturer that had a single supplier for his product that had an unexpected outcome.

An owner wanted to sell his business because he was convinced that he was going to die soon. Remarkably he continued running his business for another six years and increased the value of his business from $750,000 to $5M. 

An unsolicited offer went from $6M to a incredible $14.5M sale in less than eight weeks.

Doug Robbins
Robbinex Consulting Intermediaries
Ontario, Canada
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Podcast: Play in new window | Download (Duration: 39:08 — 35.8MB)

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Most business owners don’t fully appreciate how important it is to know who is buying your company and what their motivations are. 

How a transaction can get thrown out the window when the key people and both the buyer and seller get along well and build a lot of trust during the due diligence process. You might assume this is a good thing. It isn’t what you might think. 

How when things get personal it can cost the owner the deal and potentially millions of dollars. 

The problem with business owners valuings their business not on what the market values it, but on things such as what a friend’s business sold for, and how destructive this can be. The market will always set the value of the business and what you think the business is worth is irrelevant.  

How not having a handle on validity of revenue can wipe millions of profits off of the books with a stroke of a pen. What a quality of earnings report is all about and why it is important.

Eric White
EBB Group
Dallas, Texas
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Podcast: Play in new window | Download (Duration: 51:21 — 47.0MB)

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A company walks away from an offer of $35M and months later is forced to accept a $2M offer.

A niched business is not necessarily always a good thing, and not being able to forecast trends may be the difference between an exit or having no exit at all.

Why properly positioning a company in the market is important and can, and often does, make millions of dollars difference in what the entrepreneurs are able to put in the bank, and why companies are willing to pay more than a company is worth – sometimes a lot more. This is one of those episodes that can literally make an entrepreneur a million dollars of extra profit on an exit if they understand and apply these concepts when exiting their business. 

Jeff Rich
Touchstone Advisors
Windsor, Connecticut
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Podcast: Play in new window | Download (Duration: 1:00:13 — 55.1MB)

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A transaction which took place during the height of the Covid Pandemic Lockdown. While delayed by a few months, it was able to be closed while most of the country was still under lockdown restrictions.

Two companies which had similar issues during the sales process which resulted in neither of these transactions closing. Both sellers were ready to retire but were unable to consummate their deals, even when both buyers made full asking price offers.

How having an expertise in valuation methodology helped a buyer find, vet, and eventually buy a company for 30% less than the offering price.

Brad Scoffin
Calder Associates
Portage, Michigan
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Podcast: Play in new window | Download (Duration: 44:32 — 40.8MB)

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A founder of an IT based company had an unrealistic expectation on the valuation of his business solely based on his internet research. The business was most likely overvalued as much as 75% to 100%. How this potentially deal breaking fact was negated when buyer/seller chemistry created a situation where 1 + 1 actually equaled 3. 

A $12M revenue company, with five equal owners, never could come to a mutual agreement on the urgency and the reasons to exit their business. While they all agreed to sell the business, they had completely different motivations and reasons for selling the business. This ended up driving six highly motivated strategic buyers away from the table. Without a consensus, the deal was abandoned due to the hopelessly divided opinions of the owners.

An ESOP – Employee Stock Ownership Plan and how an owner’s illness caused a huge drop in the value of the business and consequently the valuation of the ESOP. This ultimately ended in the termination of the ESOP when the business was sold. 

A founder of a business, who absolutely loved what he did, was forced to sell his business because of pressure from family. The importance of structuring a business becomes evident to allow for either a transition where there is a meaningful life after their exit or that your business can operate without you.

Bill Vinck
Chapman Associates
Scottsdale, Arizona
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Podcast: Play in new window | Download (Duration: 46:37 — 42.7MB)

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How a $35,000 decision ended up costing a business owner $2,000,000 in cold hard cash at closing.

Customer concentration cost a seller a $7,000,000 deal that was almost across the finish line.

How positioning a company with strategic buyers can create a buyer’s auction that can dramatically increase the value of a business.

Sam shares how he sold his own business and how a deal was structured that benefited all parties creating a win-win situation.

Sam Thompson
Transitions in Business
Minneapolis, Minnesota
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Podcast: Play in new window | Download (Duration: 46:17 — 42.4MB)

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