Lindsay Buckheit, co-owner of Collective Creative Outdoors, and Kevin Black, co-owner of Holdsworth and Nicholas Inc., share their inspiring journey from corporate careers to co-owning two businesses. They discuss the challenges they faced during their eight-month search and the pivotal role of their buy-side advisor. Their insights include strategies for effective deal structuring, the complexities of securing financing, and the importance of teamwork in navigating business acquisitions. The couple also reflects on the emotional dynamics of managing dual business ventures together.
Lindsay and Kevin's journey into business ownership evolved from a single initiative into a collaborative effort after enlisting a buy-side advisor.
Working with a buy-side advisor clarified their acquisition goals, leading to more targeted searches and ultimately resulting in the purchase of two businesses.
The couple's distinct roles post-acquisition improved operational efficiency, allowing them to leverage individual strengths while fostering collaboration in their new ventures.
Deep dives
Journey from Corporate to Entrepreneurship
Initially, the plan for Lindsay and Kevin was for Lindsay to buy a business as a means to exit the corporate world. Kevin supported her in this endeavor, but the couple eventually found themselves both drawn to the prospect of business ownership. Over eight months, despite their enthusiasm, they struggled to make progress in their search due to time constraints and a lack of clarity on suitable opportunities. The turning point came when they decided to work with a buy-side advisor, which not only expedited their search but also resulted in both acquiring businesses.
The Importance of a Buy-Side Advisor
Working with a buy-side advisor significantly changed Lindsay and Kevin's approach to their business search. The advisor helped refine their 'deal box,' clarifying what types of businesses would suit their personal and professional goals. This collaborative effort resulted in more targeted outreach, allowing them to evaluate businesses that were a better fit, ultimately leading to one agency acquisition for Lindsay. Additionally, the advisor's insights provided confidence that helped the couple remain focused and disciplined during their search.
Navigating the Deal Process
As the couple navigated through the acquisition process, they faced challenges securing funding due to key man risk and client concentration issues within the businesses they were pursuing. They learned that lenders often have specific deal criteria and risk appetites, making it crucial to align their business profiles with these expectations. Through their determination and guidance from their advisor, they ultimately secured funding for both businesses, demonstrating resilience and adaptability in the face of numerous hurdles. Their experience highlighted the significance of understanding each lender’s criteria and showing how their background could mitigate identified risks.
Business Structure and Risk Mitigation
To address potential revenue volatility in the businesses they acquired, Lindsay and Kevin negotiated a deal structure that included seller notes contingent on performance metrics. This approach allowed them to manage the risks associated with client turnover and maintain healthy cash flow. By tying portions of the seller financing to performance, they both aligned their interests with those of the sellers and created an incentive for the former owners to assist during the transition period. Such strategic structuring provided a buffer against uncertainties, making their transition smoother.
Embracing Dual Business Ownership
After successfully acquiring two businesses, Lindsay and Kevin faced the unique dynamic of sharing ownership roles while maintaining individual responsibilities. Lindsay focused on leading the design and build business, while Kevin managed the advertising agency, allowing both to leverage their strengths effectively. Their distinct roles provided a sense of operational independence while still enabling collaboration on various strategic decisions. This arrangement not only fostered mutual support but also created a balanced partnership in their entrepreneurial journey.
