Nov. 4, 2021
Topic: How to Get Top Dollar When You Sell Your Pest Control Company
Guest: Brian Schoonmaker, former owner of Capitol Pest
In this episode we discuss:
How Brian exited his business for one of the highest multiples Dan knows of in the industry
Brian's roundabout way of getting into the pest control industry, being recruited by a college friend, Matt Nixon from American Pest in 2004
How he connected with his predecessors at Capital Pest and took over as president in 2015, growing the business from $1 million to $6.6 million
Why now was the right time for Brian to sell personally and professionally
Brian's concern in fall 2020 that the M&A market would change based on President Biden's proposed capital gain tax policy
What Dan told Brian at that time that prompted him to pursue a sale in April 2020
The anatomy of a sale, including setting goals and developing a board book to demonstrate who the company is and what it has accomplished
How Brian's software's business valuation report was wrong and the impact that detail could have had on how much he netted in the sale
What the due diligence process was like
What impressed Brian about American Pest/Anticimex
How lawyers can complicate a deal and what to do about it
Why Brian didn't sell when he went to market in 2019
The steps Brian took to get the company's EBITDA to more than 30 percent
The 3 levers Dan says you can pull to get the best results in the sale of your business
Dan's M&A business: PCO M&A Specialists
Brian's attorney: Mark Ruff of MHR Law
Additional advice from Brian:
Build your business to sell by adding practically nothing but recurring revenue. It is worth the money in the end, and it all but guarantees your growth. If your sales team can’t do it, you have the wrong sales team. Get someone like Patrick Quigley from Sales Training by Design to help you with that.
Review your entire operation, including:
Services offered and ensuring the services provided are better than advertised by doing the extra thing.
Marketing return on investment.
How the phones are handled.
Sales processes, routing and other efficiencies.
Your team and HR practices; ensure you have the right managers in the right roles, and change them if you don’t. Make sure your management team is strong and fills in the gaps for your own weaknesses.
Understand your software so you can know your numbers.
Be humble and know that you don’t know everything; learn as much as you can from these podcasts, your state association, NPMA, online resources or books, and take any opportunity to get to know and learn from others who have been there and done that.
Don’t be afraid to fail. There is value in learning from your failures. There is no such thing as a mistake. A mistake is only truly a mistake if you don’t learn from a misstep.
Most of all, don’t be afraid to do anything. Our motto at Capitol Pest has always been, “Do or do not, there is no try,” as the great Yoda from Star Wars would say.
Have fun! It is a great and rewarding journey!
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