Profile - How I Sold My Company
Timing, Focus And Patience Matter
Barry Roberts knew when it was time for him to make an exit. "I loved the industry, being creative and meeting people," he says. "But then, the industry started to change."
For Roberts, the change wasn't sudden, it was gradual. His margins were getting tighter, online competitors were making gains and a challenging economy was hurting profits. "I wasn't ready to retire," says Roberts, who had owned his distributorship, Barry Roberts Inc., for 20 years. "I was just ready to move on."
And that meant Roberts had to make a plan. He had to figure out specifically what he needed and what he wanted in transitioning out of the ad specialty industry. He realized it wasn't just about him. It was also about his clients. "My distributorship was my baby," he says. "I wanted someone to deal with my clients the same way I did."
For three years, Roberts searched for someone to take over his business, but he just couldn't find the right match. He was tempted to change his demands, to give in, but he didn't. Then, in 2009, Roberts finally found a buyer he liked – Proforma Executive Business Services (asi/300094). "I was pleased with the outcome," Roberts says. "I was able to consult and keep a couple of accounts. There are two or three clients I have friendly relationships with that I still sell to."
No doubt, the whole process wasn't an easy one for Roberts, but it was an effective one. Here's his advice for distributors who are considering selling their company.
Q: How did you know when it was right for you to sell your company?
A: Quite honestly, I wasn't having as much fun as I had in previous years. Whether it was competing with the Internet, the poor economy which made price more important than creativity (something I thrived on and my clients looked to me for) or service, I really don't know. Thirty years (including time before starting a company) was a pretty good run.
Q: What did you factor into your exit strategy?
A: For me, the exit strategy was about having something else to do. My speaking business was growing and this was what I wanted to be fully immersed in. The process of exiting will vary from one firm to the next, depending upon the number of employees and salespeople that are involved and how much one cares about one's clients after you're out of the picture. I didn't build a national distributorship, but it was mine. I nurtured it and there's emotion there.
Q: How did you go about your search for a company to buy your distributorship?
A: I did it fully by word of mouth. I checked with some merger and acquisition specialists and decided that that route would not be right for me. I started the search and found one or two interested parties, but we couldn't come to terms with what I wanted. I talked to everyone at trade shows and then I finally met a gentleman from Proforma.
Q: What did you want in the deal?
A: I wanted a win-win-win. I wanted a fair amount of cash up front. I wanted a fair amount of commission on sales from my former clients for X-number of years. I wanted to know that the people I was selling to would handle my clients in very much the way I always did, something I was always proud of. The biggest lesson I learned was the step-by-step process itself.
Q: How did you determine what your business was worth?
A: After asking around, it seemed to me that the formula was based on my annual sales volume over the last several years.
Q: What suggestions would you offer to distributors on selling a company?
A: Think, plan, keep asking questions and be sure about what you want to do. Do not be in a hurry, and while considering everything else, consider too, the best interests of your clients. They have provided for you for all those years.