After investing years, sometimes even decades, in establishing a robust business, owners seek reassurance that the positive footprint they've left on their community, customers, and employees will persist well beyond their active involvement in day-to-day operations
The biggest concern voiced by owners is the potential adverse effects of new leadership on their workforce, such as alterations in processes, changes in compensation, staff reductions, or the erosion of a positive work culture. Human capital is a small business greatest asset and owners want to know their people will continue to thrive for years to come
The typical model of private equity forces owners to chose between the longevity of their company and their owner personal financial security. No owner wants to see their company bought and resold over and over again as it loses the soul that helped make it great. Owners want their company to continue to thrive long after they exit
In the absence of a clear succession plan, owners often consider private equity groups or business brokers to sell their businesses, each with their own merits and drawbacks. However, neither model always aligns perfectly with an owner's needs.
Advantages of Private Equity: Private equity groups can offer higher purchase multiples, often surpassing what an employee, family member, or individual investor could provide with traditional bank financing. Their expertise in rapidly growing a company's value is a key advantage.
Disadvantages of Private Equity: Despite the attractive multiples, private equity deals often come with conditions such as extended involvement in the business, revenue and profit goals ("earn outs"), seller notes, and intricate deal structures. The strategies employed may clash with an owner's vision—like staff reductions, changes in compensation, and potential erosion in product quality—negatively affecting the business in the long run. Moreover, private equity typically looks to sell the business to another buyer within 3-5 years, impacting legacy, employees, and long-term stability.
Advantages of Business Brokers: Business brokers are incentivized to market your business widely, akin to real estate brokers, earning their compensation only upon successful sale. This compensation structure minimizes upfront capital risk and keeps brokers engaged throughout the process.
Disadvantages of Business Brokers: The sales process with a broker often extends over a year or more—taking 3-6 months to list and additional 8-10 months on the market. Owners invest substantial time gathering data, interviewing brokers and buyers, liaising with lawyers and bankers, yet frequently face deals falling through during financing or due diligence. This extensive effort typically incurs a fee ranging from 5% to 15% of the final sale price. It's common for owners to undergo this exhaustive process only to withdraw their business from the market in the end.
We're a small team with extensive experience in the tech and service sectors, distinct from private equity. We operate without external investors demanding quick returns and without a limited timeframe. Our strategy mirrors Corporate America's strengths—profit sharing, employee perks, automation, and tech—adapted for small businesses.
We acquire and manage consistently profitable businesses, prioritizing employee growth within our scaling plans. Our focus is on sustained cash flow, stability, and long-term viability, unlike the rush for rapid growth seen in typical models. We offer the speed and scale of private equity without jeopardizing a company's legacy or its valued employees.
In essence, we're pioneering a new model for business owners, ensuring their financial security while safeguarding the well-being of their employees, customers, and community.