Four Standards That Apex Clients Meet

Standards by Nick Youngson CC BY-SA 3.0 Alpha Stock Images

Some time back Chuck Campbell came on our podcast to talk about some basic standards that he as an advisor holds to before moving forward with any deal. They are standards we are very aligned with as a team here at Apex so we wanted to share them here on the blog too.

1. We Understand the Business

Warren Buffet has famously said that he doesn’t invest in things he doesn’t understand, and that led to his missing out on investing in both Amazon and Google. You can dispute the wisdom of this as an investing strategy, but we don’t dispute it as a rule for representing buyers. If we don’t understand your business, we won’t be able to showcase it the way it deserves. Thankfully, we have so much expertise on our team that we’ve almost certainly sold a business in your category before, if not a business similar to yours. If you want you can even find advisors on our team who have sold their own companies in your industry.

2. We Think It’s Marketable

You might have a great business but it may not be a good time to go to market. For example, if you had a wonderful travel agency and were hoping to list in April 2020, we probably would have told you to wait until things got clearer. It’s not enough to have a solid business: there has to be a willing market for that solid business. It’s our job to monitor the market and at our weekly meeting we are sharing information such that as a team we have a great sense of what’s going on, even in industries we’re not currently representing.

3. The Seller Must Be Realistic

Andy Cavanaugh shared that a dry cleaning business that had fantastic numbers in 2017 and 2018 but had come to us in 2024 hoping we might just overlook the dreadful 2020 and 2021 Covid numbers. The seller wasn’t recognizing (or perhaps accepting) that whatever understandable hit a dry cleaning business took in a year or two when many people worked in their pajamas, that a serious and fundamental change had occurred in relation to business travel, meetings, and even office space. His industry, without innovation or add-ons, is in a challenging time. We could only sell the business for what it is doing now, not for its admirable performance in the past.

4. We Have to Like and Trust You

When we say “like and trust” we aren’t implying we become best friends with everyone we represent. But we do mean that how you conduct yourself with us is likely how you will conduct yourself with others and if you can’t get along with us (it’s happened!) you’ll probably have a harder time getting along with the broader marketplace.

Chuck recounts an instance in which an “expert” representing a family cost him nine months. Chuck has estimated the business was worth between $3.8-4M. The expert replied, “Well, we need $4.9M to retire, so that’s what we are going with.” After nine months passed and 80-100 buyers had gotten off at numerous stages in the buying process, the seller realized who the problem was and got rid of the “expert” and put his trust in Chuck. A few months later, the business sold, at around (surprise) $4M.

Here, Chuck did like the seller but couldn’t insist that the “expert” be kicked out of the deal. Sometimes, we all have to learn lessons the hard way.

If you’ve got a business to sell and think you can meet these standards, give us a call.