Many entrepreneurs experience extreme anxiety whenever they think about selling their businesses—to the point where they won’t even pick up the phone or answer an email from a potential buyer. Have you ever stopped to think about why this is? On today’s show, my business partner here at Arkona, Pat Hobby, and I talk about ways to mitigate this anxiety through intelligent and intentional planning. We also discuss why you should be prepared for an out-of-the-blue offer—even when you’re not considering selling—since potential buyers are reaching out to business owners with increasing frequency. Do you want to miss your multimillion-dollar deal? Of course not. But if you have no plan, you’re not going to get what you want out of an unsolicited offer (or even a solicited one!). This isn’t an episode you want to miss if you’ve ever wondered what you need to know to be ready for any outcome, or even if you just want to give your future more choices.
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Pat Hobby started his career as an auditor at EY and over the years held various finance positions before launching his own outsourced CFO services company. As one of his clients continued to grow and needed more assistance, he joined the company full-time for more than 20 years. He helped the company grow significantly, do acquisitions and eventually sell it to the employees via an ESOP. Two-and-a-half years later, he led the sale of the company to a PE firm—with tremendous benefit to the employees. Since then, Pat helped co-found Arkona to help change how owners grow and exit their businesses.
06:00 - “There’s a lot of money looking for a place to get a return.” – Pat Hobby
06:43 - “Right now, in the private equity world, it’s easy to raise money.” – Pat Hobby
11:49 - “If you’re positioned properly, you can maximize the results of what you’re trying to accomplish.” – Pat Hobby
17:26 - “It’s human nature. When you don’t understand something, you just ignore it.” – Pat Hobby
21:55 - “A lot of people who had a great success on the financial side of selling their business are still unhappy because they don’t know what’s important to them.” – Pat Hobby
28:00 “Business owners aren’t professional folks selling their businesses.” – Pat Hobby
35:00 - “Most people do it once. It has to be done right.” – Pat Hobby
35:44 - “The ability to negotiate the right deal is not automatic.” – Pat Hobby
41:18 - “Is that extra amount worth it? Is it worth 60 people losing their jobs?” – Pat Hobby
43:00 - “Your kids act up when they feel like they don’t have any control. I believe that about adults.” – Pat Hobby
44:20 - “You can’t see what’s going on all the time unless you do the financials the right way.” – Ryan Tansom
46:32 - “Once you figure out what your strategies are, you have to translate that into your financials.” – Pat Hobby
46:35 - “Financials are the language of business.” – Pat Hobby
57:21 - “It’s critical to understand the process.” – Pat Hobby
61:34 - “So many of the terms and conditions you’ve negotiated can make or break a deal.” – Pat Hobby
63:23 - “Every seller is expected to deliver the buyer a normal quote-unquote working capital, which in most businesses is AR—inventory less payables.” – Pat Hobby
67:16 - “The training that we created was because this is something we wish we had eight years ago.” – Ryan Tansom
67:26 - “The stress of running a business without a plan is just, it just doesn’t need to be that way.” – Ryan Tansom
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Our guest this week had to face up to tragedy and the realization that she owned a worthless company before turning things around to make the perfect exit. When her husband unexpectedly died, Kathleen Ferry had no option but to take over his business – a business that was struggling to adapt to a changing marketplace and one that was significantly over-staffed. Kathleen shared some excellent tips on how to streamline a business, and how planning a certain way can put you in the driving seat when it comes to transferring your business to the successor of your choice! Where was the company when she took it over? When Kathleen took over, after her husband and the General Manager of the plant were gone, she got the news that the company had been valued at next to nothing. She had no choice but to keep the business going and try and turn things around to keep food on the table for the livelyhood of her and her kids. Her company was $1-2m in debt and needed some serious streamlining. What were the first key decisions she made? She brought in good-caliber senior staff: a head of sales and an operations manager. What was the streamlining process? After a year in charge it became clear that not only was the firm over-staffed; there were the wrong staff in certain senior positions. The rewarding of loyalty had been too influential in the process of recruitment. Kathleen cut 20% of the staff but only after she’d brought in an external consultant to prove that this needed to be done. Internally she had discussed trimming the workforce, but nobody would agree with her. How did she drive the business forwards ...
Want to know what it took for a Black woman CEO to succeed in Silicon Valley in the early IBM years — and still be at the top of her game today? If you’ve ever felt like you’re facing insurmountable odds, this episode is for you. Shellye Archambeau shares her incredible journey to show you how staying true to your values and aligned to your long-term vision while making (sometimes ruthless) decisions will get you to your goals. As her new book suggests, Shellye is unapologetically ambitious and thinks you should be too. Listen as she highlights the importance of having cheerleaders on your side as well as standing your ground when your convictions are challenged. As her new book suggests, Shellye is unapologetically ambitious and thinks you should be too. What You Will Learn In Today's Podcast Interview The similarities in being a CEO and running a club Why it was the "right, holistic decision" to return to work after only five weeks of maternity leave to further her career (and why later she would commute for three years instead of move her family) The difference between choice and sacrifice Why she can’t stand the term "work/life balance" How washing a pie plate changed her entire life The importance of having a shared long-term vision with key players in your life and seeking help along the way to avoid burning out before achieving your potential What your "backpack" looks like, how everyone’s is slightly different and what this means for our interactions How cheerleaders helped Shellye overcome major issues and why you should recruit your own Why it’s ridiculous to compare yourself to other people When you should swerve or stay the course and how ...
Understanding the real reason WHY a buyer is willing to sit across the table from you and write you a big check is THE most important thing you can do. Today Todd Eberhardt is on the podcast sharing with us how he boot strapped a company with his partner into a multimillion dollar company (named Comm-Works) that maintained double-digit growth for years and why/how they eventually sold to a Private Equity Firm.Todd shares his challenges with rapid growth, buying out a partner, a few failed attempts to sell the business and then how they finally chose their private equity buyer. Post closing, the story unfolded differently than Todd intended (both financially and ultimately with his role) and he is on the show to share with us everything he learned so you can better understand how to: do as much reverse due diligence on the potential buyer as you possible can to figure out WHY they want the business and what they plan on doing with it, align what they buyer what's with your business with what is important do you (personally and financially) get as much money up front as you can and make sure you are comfortable with that number in case things don't go as planned post closing. Great quote from Todd in the interview:“People buy for their own reasons and, you know, you need to figure that out when you’re making a sale because, in my experience, as an owner and working with dozens and dozens ...