“We make pretty good money here but it’s time for me to sell. But understand this, if a buyer won’t commit to preserve my culture, I’m not interested at any price.” I met Mason (not his real name) at a luncheon in Clarksville sponsored by a local ministry with which we were both involved. I wasn’t there soliciting business and he was not there to talk about selling his. But as we casually talked over lunch, he asked what I did for a living, and when I told him he began to tell me about his business and interest in selling it. We scheduled a time for me to visit at his office to get a first-hand view of his business.

I have never seen a warehouse as clean as Mason’s. The floors were spotless, the painted concrete showed no signs of wear, and the inventory was neatly stacked in 18-foot racks. All employees wore long sleeve golf shirts bearing the company logo. The break room had four modern vending machines (one of which was all-healthy snacks) and two commercial-style Keurig coffee makers. It was obvious, Mason cares about his employees, and his employees care about the company. As we entered his office to talk privately, I said “Mason, this is about as clean a business as I’ve ever seen,” to which he replied, “We feel like everything we do should honor God, how we treat our customers, our employees and even our facility.  It all belongs to Him anyway.”

Mason wasn’t the kind of guy who would make a stranger uncomfortable talking about his faith. He let his actions speak for him. After seeing the operation up close, I could better understand why he had earlier told me he would only sell to a buyer who understood his culture

2024 will be a good year to sell a business. Valuations are near an all-time high for growth-oriented companies with strong financials, a solid management team, and sustainable revenues. Mason’s business has those components, so I expect we’ll have multiple bidders for the company. I will admit, however, there isn’t a foolproof way to gauge the “cultural fit” until the seller spends quality time with the potential buyers. When I say, “quality time,” I don’t mean a couple good steak dinners. Quality time means an extended period whereby Mason evaluates the nature and practical implications of the potential buyer’s management style. We will likely visit other companies the potential buyer has purchased to evaluate if/how the buyer fosters its culture. While the buyer will of course due diligence Mason’s company, I know Mason will be doing a fair amount due diligence on the potential buyer.

Mason knows that once he sells his company, he will have to walk away from it. But by asking the hard questions up front and taking his time to evaluate the qualitative factors (not just the money), Mason will make the right call. Culture counts, even if it’s not on a Balance Sheet.

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Tennessee Valley Group

Jim is an attorney (non-resident status with the Missouri Bar) and though he no longer practices law, he has read and negotiated enough legal documents to fill a cargo tanker. He has an MBA from Harvard Business School and knows how Wall Street and private equity operates. Jim is a Tennessee Supreme Court Rule 31 listed general civil mediator with tons of experience helping business owners (large and small) work through sensitive problems to achieve winning results. He is the author of "Home Run, A Pro's Guide to Selling Your Business, Seven Principles to Make Your Company Irresistible."

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