We recently held the Getting the Deal Done Breakfast Conference, which started 15 years ago. Some things never change, as in, ~200 RSVPs, 20-25% no-shows, so a packed house of 150 or so.
Following our fantastic speaker, Jim Eschweiler, CEO of Top Pot Doughnuts, the panel* was really in sync on three main topics.
- Pre-transaction planning – Nika started it by asking, “Do your books tell the story you want them to tell?” She emphasized having good procedures so the buyer can know what they’re getting and take over with no issues. John O’Dore discussed Quality of Earnings reports, Greg talked about protecting IP and being prepared for due diligence. I chimed in with six basics to avoid (customer concentration, owner dependency, etc.). Matt discussed why concentrations are a big consideration to lenders.
- Employees – common message here on how employees are the number one asset of a business (but don’t show up on the financial statements). We had discussion on early planning, bringing key people in the loop, and the benefit of retention bonuses, paid after a year or more post-close.
- Why do deals blow up? – a couple people mentioned the landlord, and this is an often-overlooked item. Other reasons included declining earnings during diligence, diligence problems, poor internal controls, built up future cap ex, and the seller not talking to family about selling.
While the above may seem like basic points it’s amazing how often the basics fall through the cracks (and someone sells for less than they could have sold for).
“Don’t look back. Something might be gaining on you.” Satchel Page
* In addition to John Martinka the panel is Greg Russell, PRKLivengood Law, Nika Toce, Hutchinson & Walter CPA, John O’Dore, Chinook Capital, and Matthew Hrdlicka, Umpqua Bank
