When Waiting is the Right Way to Sell

Two brothers built their restoration business together. They were all in, working the business day in and day out, building and growing a successful organization, a legacy that included their sons and other family members. They came in every day, building something special together. It was fun, until one day it wasn't. Getting up and coming to work was not what it once was. It was time to sell. 

The brothers came to us, and we did an evaluation which determined their business was under the value they hoped to get. We saw what it could become with some changes and time and urged them to stay in the business a bit longer.

We convinced them to hire a consultant who would help them fine tune and implement the necessary changes. 

To their credit, they hunkered down and did everything we asked—and then some.

When we package a restoration business for sale, we always ask ourselves, "Who's the perfect buyer for this company, at this stage in its growth cycle, and in this market?"

In the case of these two brothers, this was a tough question to answer for two important reasons:

1. Their business was big enough that the single entrepreneur/operator wasn't ideal. We needed to find a private equity firm that invests in the restoration space or a larger company that was looking to diversify. 
2. The most active private equity firms investing in restoration already owned businesses in the same city. They might be interested in an acquisition, but the likelihood that they would make an offer worth full market value was slim. With this added challenge in our space, who was going to buy this business? 

My job is to connect the right people, and I take that job seriously. I had been introduced to the CEO of a large environmental engineering firm several months earlier, and on a hunch, I picked up the phone. She took my call, and it turned out to be a perfect fit. Within 90 days, we closed.

We got our asking price, which was 400% more than the business was worth when the brothers first approached us two years earlier. Not only that, but we were able to negotiate a rollover equity position for one of the owner's sons. He stayed on, retained an equity role, and is positioned to be bought out in full in just a few short years, earning even more should the company hit its targets.

These two brothers who had built this exceptional family legacy were able to move forward with a sale that brought them wealth and a new path forward. 

As you get ready to move forward with your sale, it's important to remember these key takeaways from the brothers' story:

• When you do sell, your business is an important driver of the price you'll get. It's not just the market but the overall condition of your business, which has the potential to improve, sometimes substantially.
• Another important driver of the price your business will bring is the team helping you sell and the industry knowledge and experience they bring. 
• Your best time to sell may look much different than your neighbor. Understanding what drives the best price gives you a path forward, and making the right changes can increase the value of your business.   

In this case, we recognized our client’s business was worth substantially more to a tangentially-related company wanting to expand into their city than the private equity firms already in restoration who had an established presence in their city. The brothers' hard work and patience paid off, and our contacts led us to that rare and hard-to-find perfect fit.