In 2014, Hank Goddard got an offer of one times revenue to buy his software company, Mainspring Healthcare Solutions.
Goddard said, “No, thank you”.
A year later, the acquirer came back and doubled their offer to two times revenue. Again, Goddard declined.
Sohail Khan built J.V. Global Consulting into a $3 million consulting business, offering training boot camps and consulting on how to set up joint venture partnerships. Khan was approached by one of his clients wanting to buy his business. Khan rejected their initial offer, but when they came back with a deal worth in excess of eight figures, Khan couldn’t refuse.
Jay Steinfeld started selling blinds online in 1993. The e-commerce pioneer went on to build Blinds.com into a $100 million category killer before Home Depot decided enough was enough and made Steinfeld an offer he couldn’t refuse.
Dan Martell started Spheric Technologies to help Fortune 500 companies build website portals, an emerging business back in 2004. Within four years, Martell had scaled the business to 30 employees when he received an acquisition offer that would change his life.
Terry Lammers took over the family oil wholesaling business in 1991. By 2010, Tri-County Petroleum was selling $42 million worth of gas and oil, when Lammers decided it was time to cash in.
Brian Ferrilla started Resort Advantage in 2006 to help casinos adhere to new anti-money laundering laws. Criminals were laundering money through casinos and Ferrilla’s software helped casinos help spot the bad guys.
In 2012, Randy Ambrosie was hired to run 3Macs, a Montreal-based wealth management firm with $4 billion in assets under management at the time.
If you own Chicago Bulls sunglasses—or sunglasses from just about any other NBA team—you owe your eyewear to Jason Bolt.
In 2011 Josh Holtzman, the founder and CEO of American Data Company, gathered his employees into a conference room to announce “Fifteen Cubed”, a company-wide initiative to grow to $15 million in revenue by the year 2015.
Entrepreneurs can be categorized into two groups. On one hand, you have the doers. These are the people who organically grow a business over time. They plod along for years, or even decades in the same business. They look for small, incremental improvements every day. Their natural tendency is to say no to new ideas and they have to be thoroughly convinced before they change strategy.
A few weeks ago, Shaun Oshamn sold iSupportU, a Colorado-based IT support business. Oshamn started the business at the age of 32 and knew he wanted to sell before his 40th birthday. As that milestone approached, Oshamn started getting his business ready to sell.
Jill Nelson built Ruby Receptionists, a call answering service, into an $11MM business when she met with an investment banker who told her the technology she had built to answer calls could be worth a mint.
Joey Redner started Cigar City Brewing in Tampa Bay in 2009 with a vision of being the first quality craft beer in Tampa at a time when craft beer was gaining popularity across the country.
Ari Ackerman started Bunk1 in 1999 to give parents a way to keep in touch with their kids while they were at summer camp. Over 17 years, Ackerman grew his technology business into one of the biggest brands in the summer camp industry, which is about the time they were approached by TogetherWork, a company backed by a billion-dollar private equity giant.
Dan Faggella started Science of Skill, an e-commerce website selling self-defense videos and paraphernalia, in 2013. His goal was to sell the business as soon as possible, and he started soliciting offers just 14 months later.
Shelley Rogers started Admincomm Warehousing to help companies recycle their old technology. Rogers purchased old phone systems and computer monitors for pennies on the dollar and sold the gear to recyclers who dismantled the technology down to its raw materials and sold off the base metals.
SnapSaves was created by Toronto-based company Buytopia, which has a deal-of-the-day business model similar to that of Groupon.
In the early 2000s, Carl Gould gained notoriety in New Jersey for building upscale modular and log homes under the banner Outdoor Imaging. Gould invested heavily in growing his reputation in the New Jersey market. When Gould went to sell his business, the buyer wanted his hard assets and for Gould to sign over the development contracts he had commitments on, but the buyer did not want to take Gould’s company name.
Adam Glickman started hawking “Jumbo Brand Condoms” from his Tuft’s dorm room in 1989 under the moniker “a safe jumbo is a happy jumbo.” His brand grew across campus and, upon graduation, Glickman started America’s first retail condom shop in New York City. Based on the success of the Manhattan store, Glickman expanded to Los Angeles and in 1996 became an e-commerce pioneer.
Melbourne-based David Trewern grew DT, a digital advertising agency, to $10 million in annual revenue before he sold it to STW Group in 2007 for almost 10 times profit after tax. Trewern was able to get maximum value for his business and preferred terms because he started to look at the world through the eyes of his would-be acquirer.
Lois Melbourne and her husband started Acquire Solutions, a software business that helped large companies manage their employees. After 18 years, the self-funded business had grown to 85 people and the Melbournes received an offer from a private equity firm rolling up software companies in the human resources field.
Acquirers are a secretive bunch. They typically operate behind confidentiality agreements with their motives and tactics disguised from the public. That’s one reason I enjoyed my interview with Rocky Romanella so much.
Anthony Amos and his brother started HydroDog, an Australian company offering a mobile dog washing and grooming service. For $10, the Amos brothers would show up at your door with a giant dog bath on the back of their trailer and wash your dog.
How many people will you have to approach about buying your business before you end up getting an offer?
In this week’s episode, you’ll hear from John Arnott who gives you a breakdown of the statistics on how many people he approached, the conversion rate of those approached to those who signed a Non-Disclosure Agreement (NDA), what proportion of people under NDA requested a face-to-face meeting and, of the people he met with, how many offers he received.
It’s the first time that we at Built to Sell Radio have received such specific conversion rate statistics on a single deal. Arnott’s story is treasure trove of hard-fought wisdom, including:
Dan Lok packaged a set of table tennis video tutorials into a membership website and charged a subscription fee to join. Over eight years, Lok managed to build a five-figure recurring revenue stream from subscribers to Table Tennis Master.
Table Tennis Master was one of 20 businesses Lok was developing simultaneously when tragedy struck his family. That’s when he decided to simplify his life and sell off some of his business interests.
In Lok’s case, speed and ease of transaction were more important than maximizing his financial take, so in this episode you’ll hear the story behind the sale of Table Tennis Master and learn some unconventional tactics, such as: