One of our newer brokers, Wayne Swisher, sits down with Andy to discuss his career, what led him to be a business broker at Apex, and what he most looks forward to with the firm.
Are you considering selling your business? Are you considering entering the world of entrepreneurship? If so, please get in touch for a FREE consultation. The best way to learn about us is at our website, which includes connecting with Doug, Andy, or the rest of the Apex Team.
When Dr. Joseph Marchell started Old Brown Dog Veterinary Partners he was a broke, in-debt recent college graduate. But he took six months working at a private equity firm, observed what was going on in the marketplace, made moves, and bet big. In the end, he achieved a 28X EBITDA exit for the entity he helped to build.
Joseph is the son of two veterinarian parents so he very much believes in helping animals, but he also has a real eye for business, and his first job out of school was not understudying with one of his parent’s practices, but rather working in private equity, helping to identify veterinary practices that could be bought and packed up into a larger entity with more value after operations had been streamlined and professionalized.
Indeed, because many vets are focused on animals and not spreadsheets, they end up functioning like solopreneurs and hence there are lots of inefficiencies that PE can improve, including that lowest-hanging of fruit, underpricing.
As Joseph continued to see skyrocketing values for veterinary practices he was evaluating for purchase at his PE firm, he brought his work home and had a conversation with his parents, talking about the value they currently had and how much more their business could be worth if it was part of a tactical roll-up. They were cautiously optimistic and before too long, Joseph created Old Brown Dog as the entity for this project.
While that entity was originally going to get funding to go out and get deals, Joseph had his hands full creating efficiencies with the three practices the entity acquired (his parents’ practices and another). Because he took the time to bring in a professional operations manager and someone fully in charge of HR, Old Brown Dog started seeing more profitability right away, leading to an even better possible multiple of EBITDA.
Further, Joseph was ultimately de-risking all these practices by putting people in place that reduced the key man burden on the practicing vet. Indeed, once all those functions had been hired, even the vet himself could leave and the practice could continue on with a new doctor. The mom-and-pop one-off practices were becoming part of a well-oiled machine.
Joseph was working as a vet in these practices as well as working on the business so he knew he couldn’t also take it to market. At least…he realized that after he tried it first. When he realized he was in over his head he brought in an M&A advisor who took the business off the market and cut all lines of communication off with interested parties so that the adjustments to EBITDA were crystal clear and so that Old Brown Dog could craft the narrative for selling.
Once it went back out into the market, 22 NDAs led to 8 LOIs. Joseph took the three best and asked them to come back with their best and final offer. When the dust settled, he had sold the business for a value far beyond his parents’ wildest dreams, and right in the zone he had hoped for.
This case study offers three helpful lessons:
Considering a roll-up in your industry? We’ve helped others put those together before. Give us a call.
On today’s episode of the Apex Business Advisors podcast, Andy and Doug discuss scenarios when buyers want to go too deep with their questions too early in the process.
Are you considering selling your business? Are you considering entering the world of entrepreneurship? If so, please get in touch for a FREE consultation. The best way to learn about us is at our website, which includes connecting with Doug, Andy, or the rest of the Apex Team.
One of the lessons that we learned from March 2020 was that far too many businesses were running without a cash flow safety net. They had made financial calculations (and taken financial payouts) that implied that things would pretty much only ever stay the same or get better. But as we were brutally reminded, that’s not living in reality. What is living in reality is making sure your business has what it needs to survive big downturns that have nothing to do with you and your business.
Dig your well before you’re thirsty. Get a credit line with your bank and fill out all the paperwork they need so you have something to call on if you need. There’s no reason for a business that has been around at least a couple years and has clean financials to not have a line of credit with at least one bank.
You should also see if there are business interruption insurance policies that make sense for your business based on what you experienced during the pandemic.
We’ve talked about the importance of red-teaming your business before. In this use case, you’d want to create the absolute worst-case scenarios for your business so you could figure out what you’d have to do in order to survive. Come up with dramatically bad numbers to find out just what kind of beating your business can take.
Not only is this a lot easier to do before a crisis, it also means you can create an “if this, then that” plan that corresponds to various levels of disaster.
Speaking of clean books, you can’t have a cash flow safety net for your business if you’re using it as a piggy bank for your personal life. One of the first things you want to do in a crisis is trim unnecessary or unneeded costs and it’s a lot simpler to do that before there’s a disaster.
Living below your means isn’t just a good personal rule, it’s a solid business strategy as well. In their earliest days, inexperienced business owners often used “checkbook accounting” to measure the health of their business: money in the account is good, no money is bad.
Hopefully as the business grew, business owners tapped their accountants to find ways to not only optimize tax strategy, but also to make sure that there are options available should a sudden and unexpected drop in business occur.
Those options could be anything from the business having a reserve of cash to identifying assets that could be sold quickly if needed. There are lots of ways to find cash and savings when you’re not under pressure.
Now obviously, adding new revenue lines is a part of normal business operations, but we saw so many businesses pivot to related and unrelated offerings when their regular business was impeded during lockdowns.
If you are working on new products or services, there’s no reason to wait until a disaster to launch them, but if you have a few ideas at least roughly sketched out that you don’t have the resources to pursue or develop right now, it makes sense to have them in a file that you can go back to and keep adding to over time so that if there is a crisis and you need to manufacture some new revenue, you can look back at some ideas that made sense when there wasn’t a crisis.
Do you want us to take a look at your cash flow safety net and offer suggestions and advice? We’d love to hear from you.
In many instances, multiple buyers are vying for the same business. On today’s Apex Business Advisors podcast episode, Andy and Doug discuss a few different ways (outside of Cash, Full Asking, No Contingencies) buyers can set themselves apart from the pack.
Are you considering selling your business? Are you considering entering the world of entrepreneurship? If so, please get in touch for a FREE consultation. The best way to learn about us is at our website, which includes connecting with Doug, Andy, or the rest of the Apex Team.
At the beginning of 2021 Kia launched a new logo as part of a brand refresh. Kia chose for symmetry and rhythm. This logo was meant to show a commitment to transformation underlining the new tagline, “movement that inspires.” Yet, while many people can recognize the “KIA” letters within its new look, there are still tens of thousands of searches for “KN Car” each month.
At the moment if you search for “What is KN Car,” you’re going to get a full page of non-Kia websites writing about the confusion regarding the logo. You’ll only find two Kia stories on page one of your search, both from savvy dealers who took the time to write SEO-winning content. These search results, more than two years after the logo change, represent a wasted opportunity for Kia, but some great lessons for business owners.
Most businesses these days have to have a digital strategy, which includes monitoring what is being said about your business, either by reviews, inbound links, or general chatter (think of Google Alerts for various keywords).
It seems that early on that Kia knew people were confused about the rebrand, but didn’t really help those who were. Even now, as noted above, you only find a couple dealerships that have addressed the issue.
With a fraction of the budget that it spent on the brand refresh, Kia could have built some marketing campaigns to win the search results through paid and organic results.
Kia could have launched a keyword campaign to advertise for those searching for “KN Car.” These people were curious enough to ask the Internet after seeing the logo in real life and might even have been potential customers.
The advertising links could have clicked through to explainer pages similar to the ones done by the dealers we mentioned or to something more fun and self-deprecating (though the latter would have assumed some kind of humility regarding the logo failure).
Kia could also have written some of its own content, some of it serious and some of it fun, while encouraging it to be picked up by media outlets always looking for news. They may have tasked some internal assets with creating the content, while the organic reach that the content would garner would be free.
Perhaps the biggest mistake Kia made in this brand refresh was going from a globally recognizable logo to something abstract and asymmetrical. Worse, it was so strong a departure from the previous logo as to be unrecognizable for many.
If we’ve learned anything in the era of Nike, Apple, and Chipotle, it is that consumers gravitate (understandably) towards simple logos. This also makes marketing easier, since complicated logos can be harder to reproduce in various sizes and formats.
If you’ve got something that works and your customers know, go for smaller changes rather than radical ones.
Kia could have done what Gap did exactly six days after releasing their new logo in 2010: go back to the previous one. The backlash against the logo from allies of the brand and even neutral consumers was enough to realize they messed up.
While it didn’t mean Gap didn’t have egg on its face from the attempt at a new logo, it did mean that they at least began to wipe most of that egg away.
Are you thinking about a new logo or a brand refresh in general? We know some experts who can help you with that. Give us a call.
Andy and Doug are discussing the magic that is June 30. It’s halfway through the year, and what does that mean for listing and selling your business? Find out here.
Are you considering selling your business? Are you considering entering the world of entrepreneurship? If so, please get in touch for a FREE consultation. The best way to learn about us is at our website, which includes connecting with Doug, Andy, or the rest of the Apex Team.
Habits are powerful tools for your personal and professional development. That’s why there are so many books devoted to them. But one has emerged in recent years that helps reframe the discussion around habits to help others succeed with them where they may have previously failed: Atomic Habits by James Clear.
“Every action you take is a vote for the type of person you wish to become. No single instance will transform your beliefs, but as the votes build up, so does the evidence of your new identity…meaningful change does not require radical change. Small habits can make a meaningful difference by providing evidence of a new identity.”
Just like compounding interest in a bank account, small habits don’t just become powerful habits, they actually give you more power to make other habits which can make big changes. The power of these changes, like a snowball, is cumulative.
Clear has Four Laws of Behavior Change to help readers understand how to build these habits one at a time. These are four characteristics of each habit you wish to build.
Your new habits need to be obvious, not vague. You can’t simply “be a better manager” or “lose weight.” You could “become a better manager by developing stronger personal relationships with my team” or “lose five pounds in the next three months.” When working on the habit gets tough (as it inevitably will) you can always come back to the obvious goal.
Clear unabashedly wants to use your body’s chemistry to help with habits. Dopamine is released not only when you experience pleasure, but even when you anticipate it. For example, gambling addicts have a dopamine spike right before they place bets, not when they win.
When your body thinks an opportunity will be rewarding, dopamine spikes in your body. But when dopamine rises, so does your motivation to act.
Going back to our weight loss example, going to the gym may be unattractive, but watching a certain TV show may be very attractive. By making it so that you can only watch that show while at the gym, you can make your new habit attractive, as it carries a pleasure you want.
Complicated is the enemy of easy. When you make a habit complicated, you will make excuses not to do it. You need to build a string of successful habit performances and that’s simpler to do if the habit is easy and straightforward.
The fourth law, be satisfying, is about repeating the cycle so that you can continue to pursue an obvious, attractive, easy habit. That feeling of making progress is in itself satisfying.
Clear also notes the importance of not breaking a habit chain. Try to keep that streak alive, but if you break it for any reason, don’t give up. Get back on track as quickly as possible.
There are many other important points Clear makes in this helpful book. To get a peek, here’s a free excerpt on the four stages of habit.
A habit many of our team has here at Apex is reading. If you liked this review, check out the others in our Book Club series.
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