“My wife wrote a thesis in the early 90s when she got her Master’s at Duke. So now I need one, too?” Perry (not his real name) was 53 years old and ready to sell his company. He had built his business over 20 years to be worth close to $40 million. He loved going to work every day, but recent private equity consolidation in his industry got him thinking 2024 was the right year to exit. Perry and I did a Read More
Getting a Higher Multiple
“What does my growth plan have to do with it, Jim? I’m making a million bucks a year, who wouldn’t want to buy my company?” Nathan (not his real name) was rather annoyed at me. He had called me about selling his company. We discussed valuation, potential buyers, how the process would work, and what he might do to enhance the value of his company. It was the last part that he didn’t like. A friend had told Nathan his Read More
Escape From Corporate Prison Seems Like a Good Idea, Until You Get Into the Details
“I’m tired of my corporate job at ______, I want to be an entrepreneur, be my own boss, how do I buy a business?” I hear this question about once a week, at least. The ensuing conversation often feels more like a counseling session than a business conversation. In most cases, the individual doesn't really want to be an entrepreneur; they are unhappy with their job and just want to fantasize about doing something Read More
The Value of Potential, and One Other Moral
“We’ve been granted legal custody of my daughter’s two children, and we’re about to move them here from Chattanooga. I’ve got to sell my company because my wife can’t handle this on her own.” Bart (not his real name) is one of the nicest guys I’ve ever met. I could tell he had a heart of gold to do the right thing for his two grandchildren. He told me the circumstances leading to his decision to take full time Read More
The Conundrum of the Profitable, Yet Unsellable Business
Mark (not his real name) was making so much money it was almost silly. “Can you believe this?” he said to me a few weeks ago. “Last year I made $800,000, this year it’s bound to be over $1 million. Seems like a great time to sell!” Mark’s ability to make money is no laughing matter. He has been building his company for six years, but the last two years he has really hit his stride. But Mark is tired. Working 10 to Read More
Explaining the Growth Premium
“What does my growth plan have to do with it, Jim? I’m making a million bucks a year, who wouldn’t want to buy my company?” Nathan (not his real name) was rather annoyed at me. He had called me about selling his Nashville company. We discussed valuation, potential buyers, how the process would work, and what he might do to enhance the value of his company. It was the last part that he didn’t like. It seems somebody Read More
Roseanne Roseannadanna Was Right, It’s Always Something
“I’m looking to buy a good business from a founder who is ready to retire but doesn’t have a succession plan. I can come in, learn the business, then I can buy it over time.” As I read the email from David (not his real name), I could only sigh. If David only knew the number of times I have heard this pitch or received an email like this. Life would be so nice if buying a business was as simple as he described. It’s Read More
Don’t Treat Your Business Like a Dialysis Machine
My Dad spent the last two years of his life attached to a dialysis machine for four hours three times a week. He literally could not live without it. Some business owners face the same dilemma. Cindy (not her real name) has a good thing going. Her business is growing at a steady pace, and she’s been able to pocket around $750,000 a year the past several years. We sat down recently to discuss her interest in selling. Read More
If This, Then That
Wilson (not his real name) took over management of the company from his father, who founded it in 1978. Over the five years Wilson has been in charge, company revenue has doubled. The company is well known in the community, and Wilson is a respected business leader, much like his father was. Wilson has not retained me to sell his company. At the age of 48, he has no interest in slowing down, much less selling. But he Read More
General Rule: Business Buyers Buy Cash Flow, Not Ideas
It didn’t take long for the meeting to get confusing. Bart (not his real name) started talking about ideas unrelated to the business he wanted to sell. Bart is an accomplished business owner, but years of living on the entrepreneurial edge are taking their toll. “I’m worn out,” he told me during our meeting in his conference room. The large table in the middle of the room was full of gadgets and stuff, from balls to Read More