Intentional Growth #249: From a Burned Down Building to a Multi-Million Dollar Sale to Private Equity [Part 1: The Growth Story]
TIn part one of a two-part series, we dive into the growth challenges early entrepreneurs face, including the mindset we have to be prepared to have to be successful. Today’s guest knows all about adapting his mindset to meet his needs. Dave Hoeffel is a local Twin-Cities entrepreneur and founder of Endurance Technologies who sold his company to a private equity firm on New Year’s Eve 2020 for millions of dollars. Dave’s got such an incredible story to share, from surviving a number of crises like the dot-com crash and 9/11 to his company’s building burning down and being on the line for some of the recovery costs. We’ll also touch on the emotional challenges we all experience owning a business we’re trying to grow, while concurrently making progress for the long-term and remaining true to ourselves. This is directly tied to why people get so emotional when they start thinking about exiting their business. Regardless of where you are in the entrepreneurial journey, Dave’s got some fantastic insights to share with you.
What You Will Learn In Today's Podcast Interview
- When you should sell to a private equity firm and how to coordinate the sale
- How an early realization of the freedom that comes with entrepreneurship shaped Dave’s outlook for the future
- Why it’s crucial to diversify, especially in distribution
- How his family business survived 9/11, even after his banker pulled out
- What was different in his second partnership that allowed it to continue to this day
- Dave’s wife’s reaction to finding out she was on the hook if things went wrong in the business
- What he’s learned from crisis that applies to business
- How Dave grew his company from $3.5 million in sales to $5 million to $7 million . . . and why he never made any money
- How understanding financials can help entrepreneurs navigate challenges and their growth need to be more informed about finances if they want to be successful
- The value of pulling money from the business to support the team
- How Dave’s business managed to survive the building burning down in a huge fire and the $700,000 fee he suffered because he didn’t have cleaning insurance
- Why Dave called his competitors to help save his business and what that says about his networks
- The best deal isn’t always the lowest cost to you
- When to change your company’s image and focus, and how quickly it can be done
Are You Growing The Value of Your Business
Take The 2-Minute Assessment To Get Your Intentional Growth Score™ And 1-Page Vision Board.
- Are your company's current initiatives intentionally designed to increase the value of the business?
- Do you know what you want from your business long term and why?
- Do you know what your company is worth?
- Do you know the differences between Management, Family Transitions, PE Firms, ESOPs and Strategic Buyers?
- Does the business have a written strategic plan on how to achieve the desired normalized EBITDA and valuation?
About the Guest:
Dave Hoeffel is a founder, a father and a family business man. Dave is presently doing business development for the Polytek Development Corporation, after having sold the business he founded out of the literal ashes of the old family business to them on New Year's Eve 2020. His over 30 years of business operating experience and subsequent sale of his company, Endurance Technologies, taught him about distribution, transition, rebuilding, and crisis management. When not helping other businesses grow more successfully, Dave devotes his time to his wife, Jenni, and their four children.
Quotes:
11:00 - “All the chips, everyday, on the table.” – Dave Hoeffel
12:55 - “If I could pull all the things I learned in the last five years and apply that back, these were all the right things to do but nobody told us what to do. This was just me and my dad.” – Dave Hoeffel
13:49 - “My dad was always just getting the squeeze and in that business, if you lost a major line, your business was gone. There is no business.” – Dave Hoeffel
19:29 - “That hardened me a bit. Like, all these events go along, just harden you. All these people told me they cared, but they didn’t.” – Dave Hoeffel
22:59 - “Sometimes you don’t know where feelings come from because you bury stuff so deep.” – Dave Hoeffel
24:49 - “We’re supposedly making money and I’ve got no money.” – Dave Hoeffel
27:20 - “I just wasn’t well-educated. I did the books, but I didn’t understand book keeping.” – Dave Hoeffel
32:44 - “I did not have insurance to clean my facility – to clean up the mess. $700,000.” – Dave Hoeffel
36:23 - “It’s really an interesting thing. That corporate philosophy that we have is really important toward how we change going forward.” – Dave Hoeffel
53:30 - “We brought a huge value-add in custom formulating.” – Dave Hoeffel
54:30 - “We need to do things differently because this customer base isn’t good.” – Dave Hoeffel
63:13 - “My son-in-law just bought a business, and I said, ‘The first thing you need to do is put in a budget for traction.’” – Dave Hoeffel
63:25 - “If I said, ‘Ryan, I’ll buy your business’ and you were going to give it to me for free, but I could never run traction, I wouldn’t do it. I don’t know how to run a company anymore without it.” – Dave Hoeffel
Links and Resources:
Mastering Your Cash Flow Digital Course
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You can also reach out to me via email at rtansom@arkona.io, or on my LinkedIn.