Tom Heller: That immediately took us overnight from, you know, me working out of my basement and doing very well, uh, as a sole proprietor to now I've got three full-time employees. I'm soon to add more and office space and all kinds of other issues that I had never really had to deal with. And uh, and so that was a challenge. And shortly after that I had done some consulting work for I don't think it's a problem to name names here, but for National Alec Elmo car rental before they moved their headquarters down to Tulsa. So I was doing some graphic design consulting work for them. And then when I purchased the other company I essentially my contract, my consulting contract with them, and one of their managers went onto Honeywell and she called, she called me shortly after that and said, you know, we're, we're looking at outsourcing all of our technical communication and just wondering, I know you purchased another company and you're ramping up your business. I'm wondering if you'd like to bid on the contract. And I was embedded with the tech comm team at National Alamo. So I, I had a good understanding of that business, um, and that service offering. So I said, yeah, what the heck. And so I bid on the contract ended up getting it. And those are the things that some business owners look at it or people who want to start their own business. And they're like, oh, how awesome is that? You landed a huge contract with honeywell. It was awesome. It was great, but it was unmanageable growth for the most part, it, you know, my wife and I didn't take a paycheck for maybe six months because we had to ramp up, hire three or four people, um, by all of the equipment, add additional office space and, based on the terms of the contract, we didn't get paid for over 100 days. Oh my gosh. So, you know, we had to really scraped together everything we could, uh, to, to get through that gap. Once we did, then it was great and we ended up, I haven't keeping the, the honeywell contract for well over 12 years now after I sold the company, they're still working with honeywell.
Dojo Cuts - Take From Me (2012)
Tom Heller: Well, there's, I think there are countless errors and mistakes. Fortunately, I married well, my wife is extremely organized, analytical, planner, you know, all of that. All of the things that I'm not, um, you know, by birth, I'm a, not only an entrepreneur but a creative person. So I'm right brained. I tend to be a bit unorganized. I think after our second federal tax penalty, she took over the books for the business and helped with all of that. But, uh, I would say the biggest mistakes was just not being strategic, not being really thoughtful about all of the details of not just running a business and buying another business and the employees and everything that went into it, you know, some of the down side to going basically straight from college to running my own company is. I didn't, you know, I worked for a small publishing company for a little while and I like to say that I learned everything about managing people based on my bad experience with that.
Tom Heller: And I won't name names there, but it's just going straight from college essentially to running my own business. I didn't have that experience to drawn of working with employees and running a company, all of the numerous things that go into that. And so it was basically just trial by fire and learn from your mistakes, hopefully, you know, don't repeat them.
Ryan Tansom: So super interesting because yeah, there's, like you said, there's some interesting stats that are underlying that and like Kennedy or thought process and here's we're, we're, we're you w was there any researchers or resources or something that you were getting that, that was kind of feeding that, that thought process and then the next level that is I want to get into what do you mean by like ready for it and how long did that take yet? So like, you know from the kind of the decision of like uncomfortable to having those thoughts, like how long did that take and where were you getting that information?
Ryan Tansom: Well it's interesting. I, I, I wholeheartedly agree with you in like kind of my, my take on it since I have delved into this since our sale is that, you know, you've got like the financial benchmarks are always going to be the same. So you had, okay, there's a, you know, here's your EBTDA, you normalize it. Then there's a multiple applied to based on how risky your company has. Right. So that's if that's, if it's going to be purely a financial buyer, but you know, if you think about how many times they're just purely a financial buyer, you know, I, I mean I actually don't know that the total stats for the amount of transactions and how many are financial buyers, but then you layer on the fact that there's probably a strategic buyer or there's a strategic multiple reasons that they're buying you, then it's totally like a jigsaw puzzle and that's it. It's more of an art than it is of the pure financial science-minded. And I think that's something also a lot of people struggle with because that art takes a lot of work and a lot of experience in order to master it. Yeah, absolutely. There's the art, the intangibles and the things, you know, some of the things of those intangible things you can mitigate. And we did through through our negotiation and sale by saying, okay, well if I come on with a two year employment agreement, which we negotiated independently separately from the sale of the business, he was able to say, okay, well you're willing to put a little skin in the game and you know, do it on an earn
Ryan Tansom: Okay. But like I guess, yeah, which makes sense and then the, at least the kind of my, my takeaways from all the stories I've heard is that, you know, if, if you've got half up front versus half an or or it's not like dramatically going to impact your comp, you know what I mean? So like it's, they're not like overly incentivized to push the buyer to getting more upfront because it just isn't worth the effort for them.
Tom Heller: Yeah. Yeah. And I was, again, not the, this is good or bad or again, it's just different. But I was, I was the type of business owner and manager were, you know, we would do regular quarterly meetings, reviews. We worked the EOS system and traction. We started implementing self-implementing EOS probably five or six years before the sale of the company. [Ryan interjects: Early adopter. That's awesome.] Yeah. Yeah. And uh, they had worked it to one degree or another and so having, you know, been on kind of the same operating system. I'm more or less, it was a very helpful in the transition of the sale of the company. With that said, I would, you know, have my weekly meetings, level 10 meetings. I'd have my quarterly meetings, um, you know, with my leadership team, annual meetings, but when one of my people, and again we're high on fairly high end professional services, creative services, writing, um, when, when I found that an employee was doing just an overwhelmingly exceptional job, I reward them right then on the spot. It's not like we would have to wait for a review. It's like you're doing a kick ass job, you're making me money, you're helping my company, I'm going to help you. And so some of those decisions then after the sale they were taken from me obviously in rightfully, but I felt like, you know, that separation again created a different dynamic with the employees that were my employees previously. And so as much as I wanted to, to work with them and help them and reward them and do those certain things, I couldn't.
Ryan Tansom: Because if you don't think about this stuff, there's a high probability that you could be sitting across the table from a potential buyer that is one out of a handful of buyers that it has terms, conditions, and the situation in front of you where you might be forced to be an employee over the course of the next two to three years in order to get the money that you need to actually be financially free. And if you can get most of that as much of that money up front as you possibly can because you've done certain things in the business, then the rest can be gravy and you can feel like you're not trapped. Once that thing is closed and you are sitting there in strategic meetings knowing you can't make any decisions because you're an employee, so if you are not familiar with the GEXP Collaborative process, go onto our website and take a look at what the process is that will help you understand what all your options exit options are, how to increase value your business and go get an engineer the exit that you want so that way you can be as happy as you possibly can be afterwards and get the money that you deserve because you've maximized your outcome. 2ff7e9595c
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