Chris Goebel spoke to us about the intricacies of operating and then selling a business that included nine other siblings… and he actually did it twice. Read on for some of the highlights of Chris’ story (which is available for download above):
What was the business?
The business was split across two companies: one was predominantly airport coach transfers, while the other was focussed on leisure travel.
How big were the companies?
At their peak, a total of approximately 400 employees and 175 vehicles spread across four different major airports.
How did they define the roles for each of the 10 children?
Age order was the first criteria, then it was an organic process of matching the roles with people’s specialisms.
Key drivers of business?
Contract revenue rose from 3% to 21%, which not only provided a useful hedge against seasonal factors like weather and events, it also made the business a more attractive proposition for a buyer.
What triggered the exit?
The age of the management team combined with serious interest from two different companies.
What were the most important aspects of the sale?
The dollar amount and taking care of the future of the employees.
How ready were they?
They had a lot of numbers already in place. The company was so big that they had no choice but to have their financials in good shape.
How long did it take?
Six months.
What happened next?
The business was sold to one of the bidders but a few years later ended up being sold again to the other bidder. The first takeover was from a private equity firm, but it eventually became part of a publicly listed firm.
Did the family members stay on?
After the first takeover, those who wanted to stay on did stay on. They kept hitting their targets and were given the autonomy they wanted. After the takeover from the public company it was more difficult, so some left. Chris stayed for a couple of years but didn’t enjoy the additional scrutiny and reporting requirements of a public company.
Where did Chris go when he left?
Chris is now working as a consultant, and using his experience to help smaller businesses with their exit planning.
How did he cope?
After only two days he felt bored. It wasn’t long before he embarked upon a career as a consultant.
Would he have done anything differently?
-He wishes they’d have planned more in advance and had a longer timeline for the sale.
-They should have done more to make the sale tax efficient.
-They should have been more specific about everybody’s roles in the business after the sale(s). It is not enough just to agree that “we need to grow the business”. Exactly how that growth is to be achieved should be mapped out from the very beginning.
The most common mistake he sees from the businesses he advises:
“People are surprised that all revenue and profit are not treated the same, therefore, many are ill prepared.”
“People are surprised that all revenue and profit are not treated the same, therefore, many are ill prepared.”
Wide words for the road:
“So many entrepreneurs are involved in building the business and operating it that exit planning is one of those things they realise they have to do, but it’s not a priority. The priority is building the business or maintaining it or expanding it, whatever it may be. They focus on that, thinking the other will eventually take care of itself…. but sometimes it just doesn’t take care of itself and you really need to address those issues early.”
How to contact Chris:
chrisgoebel@crossroadsconsultinggroupllc.com