For many, a successful exit can mean finding the right buyer. Not everyone wants to hand their company off to someone who doesn’t care about your legacy, employees, how long you’ve been in business, and all that you went through to build your company. Some people don’t want to sell to someone who only cares about the money.
Of course, selling a small business is a financial transaction, sometimes the largest of your life, but it can also be extremely emotional. Part of feeling “right” about it is knowing that your successor will care about your baby like you do. Many hope the new owner has prosperity for many years to come—a passing of the torch if you will.
If WHO buys your company is important to you, you’re in great company.
Many sellers don’t just want to sell; they want their legacy to live on, their employee’s jobs to be safe, and they’d like to know that the company they spent building for the last couple of decades will be around for decades more.
If it matters to you who buys your company, look for a seller who fits the profile you’re seeking as your replacement. You may own the exact type of business I’m looking to buy. If your company is in a sector that I understand well, I’m a highly competent, safe pair of hands to pass the baton to. I don’t talk much about my business history, so let me give you the condensed version. This way, if we have a conversation about your business, you will understand my level of experience.
I’ll try not to bore you or seem braggadocios. I’ve had a lot of success, but I’ve also had a few failures.
I’m an entrepreneur who has a unique sense for profitability, market timing, and creating sales and marketing systems that drive exponential growth.
To quote Al Pacino, I’ve been around, you know…
I’ve owned many different businesses in different sectors, and I still do. Some companies I acquired; others I started from scratch with a vision, a dream, and some money (mostly mine).
Here are some (not all) of the sectors and businesses where I gained a lot of experience, which built most of my wealth…
1987 – 1992 – In 1987, I was a locksmith apprentice, and in 1992, at 23, I purchased a locksmith company from a seller who started the company in 1969. I grew it 16x and sold it in 1998. Other than hard work, we were successful for a few reasons that produce results today. I studied marketing, advertised like crazy, and by changing the focus from residential service to commercial service, I added profitable high-margin products to address weaknesses in our business model. For instance, by adding access control and surveillance cameras, we were able to hire better technicians. We could charge more money because we had experience others didn’t have and there was less competition. In the beginning, electronic lock systems had enormous downtime issues because of power problems, which forced me to study the root cause of power problems with the hope that I could find a cost-effective solution. It’s also why I pivoted to my next venture.
1998- 2003 – I became an exclusive distributor for a line of products with a heavy emphasis on lightning and surge protection. When I entered the field, there were very few competitors. Because of what I learned in security and surveillance, I saw a trend in manufacturing. Manufacturers were adding digital controls to production lines, and downtime was costing billions because of power problems. To sell highly technical products, I simplified the marketing message and built a sales force to get our message across to tens of thousands of people who needed our products. Ultimately, what made us so successful was that our supplier was not very good at marketing, but we were. By 2003, we outsold the capabilities of 2 different US manufacturers.
Long lead times forced us to invest in inventory, and because we were growing, sometimes we’d sell out, and then we’d have to wait 4-6 months for the product, and everything came to a halt.
2003-2016 – Because we outsold our suppliers’ capabilities, and in order to continue growing at a fast pace, I knew we had to manufacture our own products. So I did what any rational business owner would do, I decided to do it myself. I hired an electrical engineer with a PE, and, together with my existing director of operations, Scott, Darryl, and I designed, developed, and manufactured a complete line of UL-listed panel-mounted surge protection products. And as they say, the rest was history. We built a US distributor base and, eventually, a global network of distributors. Much like franchisees, we showed them how to build a sales force and how to generate leads; we provided all the marketing materials and sales support, which helped them succeed. Many of our distributors did extremely well. Over the years, we developed and manufactured thousands of products and variations. We made automated and fixed power factor correction products, motor controls, fuel-saving controls for generated electricity, HVAC controls, commercial and industrial LED lighting, and industrial control panels. To top it off, we hired crews of electrical and HVAC technicians to complete complex installations. Many of my companies were sold or spun off into other companies.
2016 to present – I’ve owned or own the following types of businesses: e-commerce electrical products, B2B LED lighting, electrical service and installation, e-commerce pet food, marketing agency, mergers, acquisitions, and advisory services.
In addition to businesses, my wife and I have invested some of our profits into residential and commercial real estate. In 1992, we purchased a boarded-up, rat-infested duplex, our first real estate investment. I rehabbed one side, and we moved in while I rehabbed the other unit. Once complete, we rented the vacant unit, and the rent from one unit paid the mortgage payment, and we lived for free. I was hooked. This investment strategy has served us well, often providing big paydays when my company(s) couldn’t.
Every business owner knows what it’s like when all of your employees get paid, but you don’t. Thankfully, during the tough times, I had real estate to carry me through the ups and downs of business ownership.
There were other investments and ventures, but I think you get the picture.
If you’re thinking about selling your company and seeking a safe pair of hands, I’m the type of individual who will not break your company up and sell off the assets. I will pick up where you exit.
Alright, enough about me…
As I said earlier, if it matters to you who buys your business, figure out what really matters to you and seek a buyer as close to that profile as possible.
You’ll never find an exact match because there is only one you.
One word of caution when dealing with business brokers. I’m not a broker. If you’ve read any of my previous articles, I’m not a big fan of business brokers. There’s a business broker in Jacksonville named Dan. I did not change his name because I don’t care. Dan sends listings by email to prospective buyers. If you like the listing, you fill out an NDA, and at that point, most brokers send the CIM (confidential information memorandum). Every now and then, Dan sends an email with something in my buy box.
Dan’s problem is he’s not a salesperson. He’s a rejectionist.
His company is so hell-bent on gathering data that he runs off prospective buyers. I can’t tell you how many listings I pass on underwriting because Dan wants to know all about my net worth, finances, lender pre-approvals, and shoe size before letting me find out if I’m interested in the company. Dan sucks at selling businesses, and his listings stay on the market for years, most never finding a buyer. If you end up with a broker like Dan, you can’t be selective because he’ll run off your best prospects. Dan is like a car salesman who asks you to complete all the paperwork before selecting a car. Imagine a real estate agent who wants to know all about your finances before you’ve even looked at the house. Whoever teaches these idiots their sales methods is part of the reason over 90% of businesses never sell and close their doors.
Don’t risk it. If selling your business is on the horizon, don’t talk to a broker first. You can eliminate the middleman. I’ll give you a fair market offer, and we can close fast. But if the offer doesn’t meet your needs, I can advise you on the steps to take to get your company market-ready at your price in as little as 6 months.
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About the Author: David Mulvaney moved to Florida from Wisconsin in 1987. In 1992, he acquired a home services company with 98% seller financing. By 1994, Dave converted the company to 75% commercial services and sold the company in 1998 for over 10 times the original acquisition cost. Since then, Dave has owned or owns controlling interest in profitable companies in the following sectors: manufacturing, engineering, global distribution, home services, commercial services, e-commerce, SAAS, residential, and commercial real estate. His companies have grossed over 250 million in top-line revenue over the past 33 years.
Dave buys and builds great companies and advises entrepreneurs on how to exit profitably on their terms. To Book A Call, Go Here.