Exiting a Family Business

September 14, 2016 00:46:59
Exiting a Family Business
Intentional Growth
Exiting a Family Business
/

Hosted By

Ryan Tansom

Show Notes

Exiting a family business can be very challenging – just what are the rules of engagement? How formal or informal should it be? How much should be based on good faith and trust?

Our guest this week, Kurt Theriault, managed to navigate through all of the moral dilemmas and come to an arrangement to buy out his father’s share of his business, only for the Great Recession to throw a huge wrench in the deal. There was eventually a happy ending, when a surprise offer came in that allowed them both to exit the business.

In one sense this is a cautionary tale about what can happen if you avoid tough conversations with your relatives and don’t value your business properly, in another sense it serves as a shining example of what can be achieved once you get your exit planning right.

How to sell a family business and how not to sell a family business: the moral of the story, with Kurt Theriault

In this week’s episode Kurt discusses the ups and the downs of exiting a family business, and how learning from the mistakes of negotiating with his father helped streamline the business to a point where it attracted a surprise takeover. See below for some of the highlights of the conversation:

Use multiple sources to value your business:

Kurt regrets only using one opinion. This process is especially important when dealing with family members inside the same business, i.e. if more than one party agrees on a valuation based on a wide range of factors, it is more likely to stand up to the rigors of negotiation and solidifying a deal.

Put a value on your intellectual property:

However many clients you may have, the real long-term value in the business is the unique nature of what you do. Clients can disappear overnight, especially when someone exits a business, so if it is possible to monetize the concepts that underpin your day-to-day business, then you should.

Create an advisory board:

This was a core building block for Kurt. Involving impartial 3rd parties in the valuation/streamlining of a business can be invaluable during the exit process.

Hire senior employees with their own client base before exit:

It’s vital to assure potential buyers that the business has a sustainable and profitable future after the owner leaves the business. This is a surefire way of doing just that.

Understand the value of business support groups:

This helped define Kurt’s entire future. It helped with his exit and it gave him his next venture.

How did he value the company?

He used one external source to name a price.

What motivated him to sell?

The value of the offer and the realization via his peer group that he could do fulfilling work outside of his current business.

What did he do afterwards?

He was offered an opportunity to be a partner in a peer group/support business for SEOs and business owners.

Wise words for the road:

“Business peer groups are vital. Everybody’s got blindspots that they can’t see… if you’ve got 12 or 13 people living in your shoes as an entrepreneur, they’ll help you”

“The hard part of being an entrepreneur is: where do you go to get your ideas?”

“Everyone should spend more time saying: what do I really want out of the business?”

Kurt’s peer group business:

www.alliedexecutives.com

 Contact Kurt:

[email protected]

952-484-0166

 

Other Episodes

Episode

November 13, 2019 NaN
Episode Cover

#171: Why the Time to Sell Is When You're Doing Well

Today on the show, I’m with Chad Peterson (and his beard), who is here to share his story about growing and selling six companies (including a mortgage business back in the 2000s back when the financial crisis hit). He is here to share the lessons he has learned, the pros and cons of selling six different companies, and how he has become the top in his field. We also talk about how valuable and important your passion for your business is and why that can be a deciding factor on if you should sell your company. What you will learn: Chad’s background in flight school and mortgages “When you’re doing well, is the time to sell.” What is a “quantum leap jump”? When not to sell your company Being passionate versus being too emotionally attached to your business The different types of businesses Chad has built in the past The books Chad has written Chad’s game plan with building and selling his businesses Where there is no passion, there is no profit What happens when hatred comes into the equation What to do when you are too financially trapped in your business Takeaway: Learn about what matters, regardless of the timeline. Even if you’re having fun, think about your business in the way a buyer would look at it. Look at what your exit strategy is, regardless if it is five or ten years out. This will help you shift your mindset and build ...

Listen

Episode

December 02, 2021 01:12:34
Episode Cover

#277: Lead from the Core: The 4 Principles for Profit and Prosperity with Jay Steinfeld, Founder of Blinds.com

Blinds.com founder, Jay Steinfeld, bootstrapped his company — with only $3,000 in 1996 — to a sizable competitor of the big box shops like Home Depot, who acquired the company in 2014. Jay was an early adopter of this thing called “the internet” and transformed his small retail business into the world’s #1 online blinds retailer as well as the leading e-tailer of hard-to-buy custom categories of home goods. Jay intentionally designed a successful exit to Home Depot that included him staying on to run Blinds.com for an additional six years after acquisition. Jay is a passionate advocate and frequent speaker on how company culture and authentic core values drive profitable growth. Throughout his journey, Jay identified four principles that guided his decision making in every aspect of business and life which lead to his continuous happiness and success. He calls them the 4Es: evolve continuously; experiment without fear of failure; express yourself; and enjoy the ride. Jay just packaged up his experience and the 4Es into his new book, Lead from the Core: The 4 Principles for Profit and Prosperity which was just released. He thinks business owners need to stop asking themselves how little they can do for their employees before they quit and start wondering how much more they can do, and why this is a smarter strategy. This is an amazing episode that shows how caring for the people in your company will scale your business to heights you never thought possible.   What You Will Learn How Jay shifted his mindset in his business after a personal tragedy Why it’s super important to understand what your employees want (including their personal goals) The four Es that that turned Jay’s business into ...

Listen

Episode

February 05, 2020 NaN
Episode Cover

#183: Growth Consumes Capital: How David Grew from $0 to $50M then Acquired 14 Companies and Sold to a Strategic Buyer

    David Tramontana started a healthcare business (Home Care by Black Stone) back in the ’90s. It grew from 2 employees to nearly 2000 employees and from $0 in revenue to over $50 million in revenue.Today we’re talking about his challenges in growing and how growth consumes capital, his experiences with bringing on investors, and the dynamics of planning for distributions for the investors while you’re growing. The big question is: do you reinvest your EBITA to grow a valuable business (long term) or do you create your company to create distributions for yourself so you can live your best life (however, at some point, you will be sacrificing value creation for annual distribution)? Don’t just go grab an investor or a private equity firm because you can’t afford to grow. Instead, sit down and make a plan for your finances and understand your value. Everyone has different motives and you want to make sure that you intentionally get what you want. What you will learn: How David started the company from 2 employees to $50 Million and 2,000 What it was like going through two rounds of capital raises in order to fuel growth The trials and tribulations involved in growing so quickly and so much How 14 acquisitions helped David the business from $20M to $50M How strategic planning helped navigate the changing industry and Obamacare  David’s experiences working with investors What it was like shifting focus from an income business to a growth business Managing expectations of distributions versus long term value creation What it was like trying to sell ...

Listen