Author: Marvin L. Storm

About Marvin L. Storm

Posts by Marvin Storm:

August 1, 2022

Pursuing Post-Exit Dreams & Hitting Pause On The Podcast.

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)

June 1, 2022

How a Sales Price Went From 1X to 4X with the Stroke of a Pen

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)

June 1, 2022

Part Two – Michael Richmond: What Happens When the Owners of a Company Don’t Know Why Their Company Was Valuable

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)

June 1, 2022

Part One – Michael Richmond: Why a Company That Was Growing Exponentially Couldn’t Get Sold

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)

April 25, 2022

Part Two – Linda Broom: Why a Business Growing By Leaps and Bounds Couldn’t Get an SBA Loan

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)

April 25, 2022

Part One – Linda Broom: The One Thing You Can’t Forget When Selling a Business – If You Do It Can Cost You Big Time

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)

March 7, 2022

Why You Shouldn’t Buy a $400,000 Ferrari Before Your Business Sale Closes

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)

February 21, 2022

A Success Plan That Took a Business Worth Million to Zero

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)

February 7, 2022

What Is Pre-Due Diligence and How It Can Make You Millions

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 — )

January 24, 2022

How Two Partners in a Successful and Growing Business Managed to Take It to Zero When They Decided to Sell

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)

January 10, 2022

How Skillfully Crafting A Story Regarding Your Exit Can Turn Your Biggest Loss Into The Reason Why A Business Is Sold

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)

December 27, 2021

Why Certain Types Of Buyers Will Pay More Money For The Same Business

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)

December 13, 2021

How an Entrepreneur’s Ego Took a Deal from $30M to $1.2M

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)

November 29, 2021

How To Sell Your Company For Less Money But End Up Putting More Cash In Your Pocket

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)

November 15, 2021

How Doing the Right Things Turned a $20M Sale into a $40M Sale

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)