On this week’s podcast we tell the incredible story of Conrad Braun, a man who not only managed to turn a business around from technical bankruptcy to profitability in a matter of years, but who also managed to follow most of the golden rules when he exited the business.
He did all this despite having no experience of running, buying, or selling a business. In fact he only became involved in the business because he sold them an IT system. Hear how this accidental business owner managed to save the company by pleading in person with his major creditors to not cash the checks his company had just sent them, how he faced down the banks and persuaded them to extend the credit line of a technically bankrupt business, and why his battles with heart disease motivated him in his exit strategy.
Conrad Braun’s story really is a shining example of how to run a business from beginning to end, through good times and bad. Firstly out of survival and then out of motivation to grow something profitable, Conrad wanted to grow a business that was worth something to his banks, his vendors, and ultimately to he and his family.
By implementing the right systems of reporting, he effectively became ‘bankable’. From bankable to profitable and profitable to valuable, the path Conrad took is one to take note of.
By getting on a plane and visiting his four biggest creditors to persuade them to not deposit the checks his company had already sent out, Conrad literally did go the extra mile. Once he’d averted the crisis, the rapport that he had built up ensured he was trusted in future.
It often isn’t just about volume of sales. In Conrad’s case, it was the expenses relative to volume that proved to be key.
In Conrad’s words:
“When you’re a small businessman, if you owe them $100,000 you’re in trouble, if you owe them a million, they’re in trouble!”
“Banks sell borrowed money. If you can show them that their debt to equity is improving, they will keep giving you money. Just give them a plan that shows them you’re going to pay them back”
He gathered a consensus from other companies who shared the same vendors. He then met with both likely and unlikely buyers and asked the question, “if I was geographically contiguous to you, how would you value my business?”
He concluded that it was worth a lot more than the average multiple the industry was giving companies like his.
His struggles with heart disease motivated him to use the company as a means to protect his family in the future.
3 years. He went through a hypothetical sale with a prospective buyer who knew they wouldn’t be able to complete the deal, just to prepare the company for the real thing.
He was more keen that people didn’t lose their jobs than he was to maximize the value of the company, so he built into the deal a stay-pay package which used 10% of the purchase price to distribute among his key employees after the sale.
Suddenly he had $2 million dollars, but he didn’t know what to do with the money. He joked that he got through 10 bucket lists, but not even this could prevent the boredom.
He ended up working for the buyer he’d originally sold to. The division he ran became the most profitable division of the whole group.
“If you’re successful in business, there’s an intersection – the intersection between ability and opportunity. But finding the right opportunity is sometimes rare.”
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Having a dream and hustling are not always enough to reach your full potential—capital is required to fuel that growth! Sarah Dusek shares how she raised $17 million for a minority stake in her industry-pioneering 'Glamping' company, Under Canvas. She sold it only a few years later to Private Equity for a hefty ROI. Now Sarah wants to change the investment landscape for women entrepreneurs, who receive only 2% of all available funding each year in the US. To help fix this problem, Sarah became a venture capitalist to provide women and entrepreneurs in South Africa access to these funds. Here’s her story, and how she is using business and capital to make an impact on the world. What You Will Learn In Today's Podcast Interview The truth behind why it’s so hard to access capital and break into “the club.” How turning down $7 million got Sarah $17 million instead. The value of really knowing the business you’re in and understanding what’s valuable to someone else when deciding to sell. Why, despite being pioneers in the industry and building their own tents, Under Canvas chose not to sell the tents they made as a new revenue stream. How anger drove Sarah to becoming a venture capitalist and the success she’s seen investing in the underserved market she came from. What metrics people need to know when working with business buyers and investors to make your business an appealing investment as well as a sustainable operation. The broken environment of capital allocation, including the fact that only 2% of venture capital is given to women each year in the US — and what Sarah’s doing to change that. How to evaluate the type of capital you’re receiving, ...
The co-founder of HAAWK, Inc. Ryan Born joins me for today’s episode. Before HAAWK, Ryan was the founder and CEO of AudioMicro, Inc. AudioMicro was a media rights management company. Its most successful venture was AdRev. Ryan explains what that service was and why he felt it worked. We take the journey with Ryan through AudioMicro’s beginnings, the pivots, the changes in the media rights industry, and what life was like after AudioMicro changed owners. This episode is a great example of the struggle and the hustle many entrepreneurs face on a daily basis. What you will learn about: Ryan’s early career as a CPA. His time with WireImage and what it taught him. The only two things that generate wealth. The changes in the media rights industry. The problems Ryan saw with the system. How AudioMicro and microstock changed the system. How Ryan raised the capital for AudioMicro. The mistakes he made early on in the business. Ryan’s advice for building an effective pitch. Why EBITA is important and not important at the same time. Other factors that buyers look at during a sale. Why you need to break even as soon as possible. The struggles AudioMicro had in the beginning. The list of avenues AudioMicro tried that didn’t work. Why you need to choose your investors wisely. How AdRev worked. Why Ryan didn’t hire an investment banker for his sale of AudioMicro. The indicators that it was time to sell. The dance Ryan and his investors did to get offers. How getting the best offer is like playing poker. The benefit of having a knowledgeable team around you. What happened after AudioMicro sold. The beginnings of HAAWK. The thing Ryan is doing differently with HAAWK. Ryan’s parting ...
Wayne Rivers is the co-founder and President of The Family Business Institute, Inc. that has been around for over 28 years. He is an author of four books on family business and has been quoted in many articles for large publications like Forbes, Fortune, BusinessWeek, Entrepreneur, The New York Times, and Washington Post. Wayne is also a Wall Street Journal panelist, a speaker, and has appeared on the Today Show, CNN, MSNBC, and CNBC. Needless to say, he really knows his stuff! In his 28 years at The Family Business Institute, Wayne has worked with many families in all kinds of situations. On the podcast, he tells us stories of different encounters he has had with families over the years. His main goals are business prosperity and family harmony for all of his family business clients. The biggest question they have to answer first is, are you a business family or a family business? In today’s episode, you will learn: How to prosper in a family business and also have family harmony How to avoid complacency in your business The importance of reinventing your business Significance of bringing in good talent Bridge management techniques Importance of modelling out your financials to make decisions Defining roles, responsibilities, and compensation in family businesses Phantom stock arrangement for non-family members Key elements of a good buy-sell agreement Reasons for keeping real, solid financials Wayne explains how a family business needs to plan ahead for successions to make sure everyone is on the same page with where the business is going. Family businesses need to bring in top talent, not just keep it in the family. He also discusses how these days you always have to be looking to reinvent the business and not become ...