The Big Idea with Ron Davis
Behind-the-Scenes Peek at Selling a BusinessNow
If you had just one really great idea you could share with the alarm industry, what would it be?
This month's BIG IDEA comes from Jill Oliver, Georgia
In deciding to sell her business, Jill Oliver had come to the realization that she was having difficulty multitasking, accepted that it was a fact, and felt that a CEO who didn’t multitask was not effective.
HIS MONTH, as well as the next month (part two), are a bit of a departure from the usual but I think will be interesting for you — particularly you Baby Boomers and beyond. It deals with a woman of a certain age, the owner of a well-run, well-established company in Georgia. For reasons that you will see, I will identify her company next month as well as introduce you to the president of the purchasing company.
The lady in question is Jill Oliver, a mother and grandmother, a salesperson and entrepreneur, and soon to be, almost retired (though I will believe it when I see it!). Oliver single-handedly built a solid alarm company with a good base of accounts and a great reputation. She did much of the selling herself, and even to those she did not sell knew Oliver as a hard worker and someone who deals with problems rather than runs from them.
TRANSACTION NEED TO HIT SPECIFIC NUMBERS
She’s done it all, seen it all, and one day called me to ask if I would help her sell her company. Something told me it would be fun. I agreed immediately, and started working with Oliver compiling all the information that’s needed. She kept good records, had good contracts, and even received a few tentative offers to buy her company. She was very specific as to the amount of money that she wanted. Not “about” or “in the range of,” but rather an exact figure from which we were told she would accept not one penny less. She told me her son Ramsey, a U.S. Army Major, would be advising her pro bono.
Within a few weeks of having met Oliver, my colleague Steve Rubin and I started talking to prospective buyers. We sent out information, got some offers, but none were quite to her liking. She was willing to work part time after the acquisition, but wanted to get away from the day-to-day grind of running a business. Rubin and I were starting to get frustrated. We got close to her number, but not exactly where she wanted to be.
Then one day, she called, and told us that she had found the perfect buyer, and wanted us to make sure that she wasn’t missing anything in the negotiation that could come back to haunt her. We looked at the offer and were surprised to see that a substantial amount of the money that would be paid to Oliver was going to be seller financed, i.e. financed by her — which is not unusual — as long as there were certain assurances in place. At that time, those assurances were not in place. Also, it seemed to us that the amount of time that the loan was to be financed was way too long. I called Oliver and asked her what she would like me to do. “Fix it,” she said.
WITH A FEW TWISTS, SCRIPT NEARS HAPPY ENDING
I called the president of the company, told him the issues (including some smaller ones) and when he asked my suggestions, he agreed to meet them. All of the principals of the buying company would guarantee Oliver’s note, personally, regardless of what happened to the company. The time that the note was to be written for was cut in half, interest was agreed upon, and within several telephone calls all issues were resolved. A few days later we received the asset purchase agreement, and it was written exactly as we had discussed.
There was never a time when Oliver faltered, hesitated or felt unsure that it was going to happen. I realized I had to write about what gave her that confidence that things would turn out exactly as she wanted them.
And here is Oliver’s great idea, in three parts:
- She believes, in her words, “that the Lord’s timing is perfect.” A lesser religious scholar than I might have put it that she believes in cause and effect.
- She had come to the realization that she was having difficulty multitasking, accepted that it was a fact, and felt that a CEO who didn’t multitask was not effective.
- With the help of her son, who is an acquisition and financing specialist for the government, she put together a plan of what she had to do, how much money she would need, and where it might come from.
And that is exactly what happened — almost as if she had written the script with the outcome of the story preordained.
In April’s column, assuming the transaction finalizes when it is supposed to, I will share the rest of the story. We will talk to the president of the buying company and get his insights into how this happened, and why. For now, reread Nos. 1, 2 and 3. There really are some life lessons there. And I bet that the transaction will happen exactly as Oliver foresaw it.
Ron Davis is Security Sales & Integration's "What's the Big Idea?" columnist and contributing market analyst. He is president of Davis Group, a full-service consulting firm serving the security industry, which also includes GraybeardsRus. He has 35 years of industry experience, including founding Security Associates International in the 1980s.