By Rich Lindblom
Do you look ahead to the future and wonder what will become of your business when you’re ready to retire? If one of the options you’re considering is shuttering your business because you don’t believe you can sell, I have a story to tell you that might change your mind.
Ours was a family-owned appliance company (both sales and service) started by our father in 1956 in Chicago. My brother and I took it over after our father’s retirement in 1994 and we ran it together until we sold it last year.
The journey to sell our company started about five years ago. My brother and I had talked occasionally about how long we wanted to work and what to do with the company, but the five children we have between us all had their own careers. As luck would have it, BrandSource had a business broker lined up to give a seminar at the Fall Convention that year.
While it was very interesting, it was largely a high-level talk about the process of selling but it was short on the nuts-and-bolts details. After the seminar ended, I spoke to the broker about the information I still needed. He walked me through the process of selling in a bit more depth and offered to provide our company with an assessment of the valuation of our company. When I got back to Chicago, I sent him the detailed financial information he had requested.
A few weeks later we received the valuation report. While my brother and I didn’t really KNOW how much our company was worth, we did have an idea in our head of how much we’d LIKE to get for it. Unfortunately, the broker’s valuation was lower than we were hoping for. The bottom line was that our company was definitely sellable, but to make it more valuable we needed to grow sales and profits. So, we went to work on building the value of our company.
Nearly two years ago, in the fall of 2019, I was invited to take part in a major manufacturer’s retail council. It was a group of about 25 dealers from around the country who gathered to talk about a variety of issues for two days. The manufacturer’s goal was to find out what their dealer partners thought about the state of the industry and brainstorm new ideas.
During session, a representative from the manufacturer said something that stuck with me: “We are constantly adding new dealers, but for every one we add, we lose one.” He explained he said that while they are constantly adding new dealers, they also constantly lose a roughly equal number of dealers who close their doors. And I’m not saying that they go out of business or go bankrupt. It’s a case where they don’t have anyone to sell to or turn their business over to, so they simply close their doors one day and walk away.
As the conversation went around the room, it seemed that pretty much every dealer in attendance had the same basic belief … That no one would ever want to buy their business! Every dealer, that is, except for me.
I didn’t feel that way because at that moment, I already had a letter of intent (LOI) in my hands from a buyer to purchase our company. Before I got the LOI, we had one-on-one meetings with multiple interested buyers during the two months the company was on the market. Unfortunately, I was bound by a non-disclosure agreement that prohibited me from saying anything about our impending sale. So as much as I wanted to jump into the conversation and tell everyone they were wrong, I couldn’t.
Well, the sale has since been completed and I’m here today to tell you that YES there are people out there who are interested in buying a company just like yours. So, whatever you do, you owe it to yourself to explore that option before you just lock the door one day and never go back.
I have been invited by BrandSource to speak on my experiences at the upcoming Nashville Convention and would encourage any of you who are considering selling your business within the next five years to sign up for one of my three sessions. I will walk you step by step through the selling process from deciding to sell through the closing process.
You’ve worked hard to build your business, and there could be plenty of life left in it when you’re ready to retire. I can help you find a solution that keeps your business alive.
Longtime BrandSource member and Maytag Leadership Council officer Rich Lindblom recently sold his family business and will be sharing his insights at Convention. You can reach Rich at firstname.lastname@example.org.