Playing the Field

So, you have been approached or have decided to sell your business; what do you need to know to feel like it is the right decision? According to “The Art of Selling Your Business” by John Warrillow, there are three types of acquirers. This article will provide some highlights of what you need to understand about each type. Keep an open mind to your options and maximize your odds of creating competition for the sale of your business.


Type 1: The Individual Investor

Individual Investors are looking for smaller companies looking to replace an existing job because of being downsized or potentially having the skills to run a service company and do not want to start from scratch. A qualified Individual Investor needs to be financially established through their own funding or be able to get a loan to purchase your company. They are typically less sophisticated than a strategic buyer or a financial buyer. 

Their lack of sophistication could result in you driving a better deal with less scrutiny of your business details. Typically, they do not pay cash for an acquisition. They either borrow from a bank or ask the seller to finance. Since your loan is second in line with creditors, you need to be very careful on this key point. If they are financing through an SBA loan, make sure you understand an individual’s eligibility to use an SBA loan.

The end goal for you as the seller is to get as much cash upfront. If you are willing to finance the buyer with a loan, ensure that the upfront covers your needs and payments are “gravy,” and if the buyer fails, you are satisfied with the transaction.


Type 2: Private Equity Group

There are three types of PEG buyers:

  1. Multiple shareholders who buy, improve, and flip companies typically within five to seven years.
  2. A family or larger office interested in investing money in a sector, normally on behalf of wealthy shareholders, and their goal is to maintain their acquisitions on behalf of their portfolio.
  3. Individuals or groups of individuals who want to own a business and think they can run a business better than it is today. They are typically financially backed by their contacts to make the acquisition.

The PEG buyer’s game is to find businesses that they can scale or they are underperforming. Their approach is to ingest capital and more sophisticated management into their acquisitions. The end goal is to bring “business school rigor” to the smaller business mindset.

Since they are typically looking to apply a lot of debt to their acquisitions, they want to maximize return by using the business as collateral and pay off a bank loan with the profits from the business. Their target acquisitions are larger and more mature businesses that have a track record. They look for a relatively low valuation and will negotiate a front-end buyout and backend buyout. They add necessary systems, processes, and management to increase the backend buyout for the seller. This arrangement works well for sellers who are not necessarily ready to retire but like the satisfaction of receiving some money upfront. PEGs will take over and overrule your decisions with the goal of trying them up to industry standards.

Acquisition offers to give you leverage when negotiating, so listen and be savvy. A PEG is the business of buying low and selling high. They look for profitable companies for as little money and use a lot of debt to acquire their companies.


Type 3: Strategic Acquirer

A strategic acquirer is a company with assets that is looking to increase the value of their company by other companies. They are typically in the seller’s industry and looking to be more competitive, win more business, differentiate their services, expand into a new market, or kill off their competition. Another motivation is the ability to gain economies of scale by spreading their overhead across more revenue.

Strategic acquirers will offer a higher price and make a deal happen faster because they typically understand the businesses they are buying.   

One of the “key leverages” as a seller is to have something they may want or don’t do today. For example, maybe your service company has a niche in selling and installing water heaters. This niche could be very attractive because of your marketing, training, and processes you use today to be profitable with this service.

Keep in mind the strategic acquirer is not a person; it is a thing. It is an organization run by a CEO who reports to a board to maximize the value for their shareholders. They are in love with their company and are focused on improving their company through acquisitions.


Keep your mind open to the different types of buyers. Understand their motivations and be able to demonstrate the drivers that drive them. Your job is to ensure your business is consistently profitable, so no matter what type of buyer is interested, your company has the foundation to consider an acquisition.


Lynn Wise is the Founder and CEO of Contractor in Charge.

Service Roundtable is dedicated to growing your bottom line and helping your business maximize its full potential. These groups of contractors work together to assist you with marketing, sales, business, and so much more. Twice a month, seminars around the United States and Canada are held to network and further assist your business. Visit Service to see if there are Success Days in your area.

10 Life Lessons from Admiral William H. McRaven

Listen Here!

In his 2014 commencement speech, former Navy SEAL Admiral William H. McRaven offered 10 life lessons to the University of Texas at Austin’s graduating class. Through his experience in the military and basic Navy Seal training, he developed 10 salient elements to help the graduating students understand how they can help change the world as their journey begins beyond college life.

I would encourage you all to watch his full speech. It will be 19 minutes and 26 seconds well spent!

This speech is not only profound and entertaining from a man that has accomplished much in his life, but it is also simplistic in nature. He talks about how the little things, when done well, can and will lead to changes in your life, drive your destiny, and in turn, will be a step forward in changing the world. These lessons are very humbling yet develop great character. Whether you apply these to your business, home life, or your life in general, they can have a profound effect on changing your life and the world around you.

After his introduction, he starts with the University of Texas’ motto, “What starts here changes the world.” Then he goes on to put this motto into context for his speech:

“It matters not whether you ever serve a day in uniform. It matters not your gender, your ethnic or religious background, your sexual orientation, or your social status. Our struggles in this world are similar. And the lessons to overcome those struggles, and to move forward, changing ourselves and changing the world around us, will apply equally to all.”

Then Admiral McRaven takes a deep dive into 10 drills and exercises from basic Navy Seal training, that although they may seem mundane, and at times brutal or abusive, he took a lesson out of each one and applied it to his journey through his career and life.


  1. If you want to change the world, start off by making your bed.

Every morning, the drill instructor would come into the barracks for bed inspection. Every bed had to be tucked perfectly and folded a certain way. Although this seemed trivial and a mundane task, it developed a sense of accomplishment to start your day; something you can take pride in a job well done. This task is about holding yourself accountable to start your day on a positive note with a task completed perfectly. The little things do matter, so start your day with something simple with a task completed.


  1. If you want to change the world, find someone to help you paddle.

Divided into groups of six, students had to paddle a rubber boat through rough seas to a specific destination. Each paddler had to be synchronized with the others and work as a team with equal effort from each person in the boat. Going out of sync would cause the boat to go off course. This exercise is about having confidence in others and the importance of a team effort. You can’t do it alone. Seeking help from others, whether it’s friends, business associates, vendors, coworkers, or credible strangers, all can help guide your boat in the right direction through life.


  1. If you want to change the world, measure a person by the size of their heart, not by the size of their flippers.

Admiral McRaven recalls one boat crew made up of all little guys, 5’ 5” and smaller, and they called them The Munchkin Crew. The taller guys would always make fun of their little flippers. This incentivized the Munchkin Crew to work harder as a team, with a lot of heartfelt energy, and they would routinely outpace and outperform the taller guys. The lesson learned here is that physical stature, or any physical characteristic for that matter, does not determine one’s success. We should respect everyone’s talents no matter their size, ethnicity, race, or social standing and how they can have a positive impact.


  1. If you want to change the world, get over being a sugar cookie and keep moving forward.

Throughout each week during training, the drill instructor would conduct a uniform inspection. No matter how perfect the uniform was, the instructor would always find something wrong with someone’s uniform. Whoever failed the uniform inspection for any reason would have to run fully uniformed to the surf on the beach, dive in to get wet, and then roll in the sand on the beach until they were covered in sand. They called this the “Sugar Cookie” drill. Some of the students would get frustrated knowing that no matter how perfect their uniform was, the instructor would always find a flaw. The ones that couldn’t accept this fact never made it through the training. The message here is that life is not always fair. Suck it up and move on.


  1. If you want to change the world, don’t be afraid of the circus.

Every day of training was filled with physical activity. Running, swimming, calisthenics, obstacle courses, and the like. There were minimum times set to complete these exercises, and if you didn’t meet these standards, your name was put on a list to get invited to “The Circus.” This was an extra two hours’ worth of exercises designed to break you down and make you want to quit. Everyone in training made the list at one time or another, yet those that made the list consistently and didn’t quit got stronger and better. This teaches us not to be afraid to fail often, learn from it, work hard, and get better.


  1. If you want to change the world, sometimes you have to slide down the obstacle headfirst.

During training, all the students are required to complete a 25-step obstacle course. One section of the course involved using a rope attached to a 30-foot-tall tower and climbing down this rope for 200 feet until you reached the end. There was a very impressive, best record that hadn’t been touched for years until one of Admiral McRaven’s classmates decided to slide down the top of the rope headfirst. This was very dangerous because he had to balance himself to prevent falling to the ground while laying on top of the rope sliding downward. He took the risk anyway and beat the record by half. Go ahead and take calculated risks.


  1. If you want to change the world, don’t back down from the sharks.

During a section of their training, they had to swim in the water along San Clemente Island, a breeding ground for Great White sharks. The students were made aware of the presents of sharks in these waters and the different species. Night swims were also part of this drill, making it appear even more dangerous. They were told that if they encountered a shark to “stand your ground” and do not swim away or act afraid. And if the shark did get close, to kick or punch it in the head. Easier said than done, but they did it. Admiral McRaven says that we will run into a lot of sharks and bullies in the world, but we should face them down, hold our ground, and deal with them.


  1. If you want to change the world, be your very best in the darkest moments.

While training for underwater attacks against enemy ships, the students had to swim two miles underwater at night to an enemy ship with nothing but a depth gauge and a compass to get them there. There was some ambient light, but once they got close to the ship, the ship blocked the little light they had. The divers are expected to swim to find the center of the ship, known as the keel. At this depth and with the ship blocking any light, the diver can become disorientated and panicked. The divers are told to stay calm and composed at this moment and to focus on the job at hand. The lesson here is to stay calm and step up when times are the toughest.


  1. If you want to change the world, start singing when you’re up to your neck in mud.

During the 9th week of training, “Hell Week” starts. This is where the students have six days of no sleep and continuous physical activity and mental harassment. Then to top the week off, this is followed by a day in the mudflats. The students were expected to spend 15 hours in a mud swamp in freezing cold while the instructors yelled and encouraged them to quit. They were told that they could leave if only five men would quit. As they shivered from the cold, one man began to sing, and slowly the others followed. As they sang in unison, it lifted their spirits and helped them get through the drill without quitting. Life’s lesson: Lifting the oppressed and those badly treated by authority will give them hope.


  1. If you want to change the world, don’t ever, ever ring the bell.

There is a brass bell hanging in the center of the training compound, and if you want to quit, all you have to do is ring the bell. No more 5:00 am wake-up calls, brutal drills, harassment, and abuse. Some quit; others stay the course so they can change the world. The point here is that no matter how tough things get in business or life, never give up.


Our lives are not as brutal and tough as Navy Seal training, yet simple lessons can be learned from their training tactics that can change our lives and change the world. Start each day with a simple task completed. Find others to help you through life. Show respect to everyone, especially those that we consider different than us. Remember that life is not fair and that you will fail often. Take calculated risks and step up during the tough times. Facedown the bullies, lift up the oppressed, and never give up.

If we all follow Admiral McRaven’s advice and pass it along to others, we can change our business, change our lives, and change the world!


Steve Mores is the Vice President of Training and Sales at Dynamic Air Quality Solutions.

Service Roundtable is dedicated to growing your bottom line and helping your business maximize its full potential. These groups of contractors work together to assist you with marketing, sales, business, and so much more. Twice a month, seminars around the United States and Canada are held to network and further assist your business. Visit Service to see if there are Success Days in your area.

Simplify Now, Diversify Later

My six-year-old has enjoyed…or hated, and I’m not sure…a summer filled with ‘summer camps.’ She’s too young to be working with mom every day, not that I wouldn’t have her answer the phone, but she doesn’t read yet, so typing articles and sending emails…well…let’s give her a few years. I couldn’t stomach the idea of her laying on a couch at her grandma’s watching TV all summer long, so lo and behold, I signed her up for everything I could find: art camp, “Singing in the Rain” camp, “Beauty and the Beast” camp, Bible camp, swimming lessons, and finally, this week, the grand finale of them all…MUD CAMP! She’s waited all summer long for mud camp at the Tennessee Aquarium; meeting new animals, discovering the ecosystems in mud puddles, exploring through the Chattanooga Nature Center, riding a school bus for the very first time! All of these things have been much anticipated…all summer.

So, I’m sure you can imagine with me my surprise when each day this week as I picked her up from mud camp and eagerly awaited the download of her day…silence. Nada. That’s right, a big fat nothing. Too tired to communicate, she climbed into my SUV each day, buckled herself in, and zoned into the abyss on the 45-minute car ride home. I couldn’t believe it!!! I mean, come on, at least tell me all this crazy schedule rearranging, and my co-working from a different office has been worth it!! At least tell me you’re having fun!


Until yesterday, remember, she’s six. The first words she uttered on the way home yesterday? “I’m in love. His name is Owen; we shared popcorn today.” *Insert her giggles here.*


And just like that, she’s in love. Definitely not the moment I’d been waiting for.

You know, something else that isn’t the moment we’ve all been waiting for? That moment your customers call you in the heat of summer to complain about something your guys did that wasn’t even in the original scope of work! And now your week is backed up triple calls thick, fixing problems created by your team instead of responding to profitable repair and replacement calls.

That’s right, left-field curveball coming at you – it’s time to get to the meat of what I’m really excited to share with you today.

The number one relationship killer is unrealistic expectations.

Something that’s been inspiring me lately is the Inc. Best Book for Business Owners, Built to Sell. In Built to Sell, they make a recurring point, “You must have a sales engine that will produce predictable recurring revenue.” The word recurring can be taken in many ways, and I’m not talking about ‘recurring’ incoming from service agreement billings. I’m talking about recurring predictable service calls, even if they’re with a multitude of customers.

Stay with me here. It’s summer, the phones are ringing off the hook, and you have the opportunities right in front of your nose to make back the money you lost in the spring, or last fall, during the slow times. Watch out, don’t get busy with the wrong calls. We’ve said this before in our YouTube video, ‘Creative Call Taking,’ but this is an entirely different angle. What I mean is, watch out for the specialty calls. Don’t get stuck in the “super-specialty” scenarios right now that drain the energy out of your team and have possible room for error. Save the specialties for the fall when you’re open to diversifying. Otherwise, you risk doing those calls halfway or at less than your top quality, which could mean losing those customers in the future.  

Right now, focus on the bare-bones basic relevancy of what you do. For example, you’re a plumbing company, and you do plumbing really well. This isn’t to say that you should be doing “drive-thru,” low-quality service. That should never happen. And it doesn’t mean only doing basic repairs either. But what it does mean is that right now, it’s not the time to be extending beyond your wheelhouse. It’s the time to do what you’re best at over and over so you can maximize the efficiency of your team.  

Standardize your priority services now so you can charge upfront, and always do charge upfront. In the busy season, productize your services and cherry-pick the dispatch board for the calls you know your team does really well with and will be profitable for your company. Not only that but on those calls, track the leads for those that you could offer more diverse services to in the slow season.

Because in the slow season, that’s the time when you can afford to branch out into more specialty and add-on services; that’s when you diversify simply because it’s business, and it’s the job of the CEO to find the money and opportunities for the business. 

This is when you take the time to develop even greater expertise in those specialty jobs and new types of jobs so you can hone the craft while the demand is low…and then you’re able to carry your improvements and your new skills into upcoming seasons. 

Eventually, those might become part of your basic services, too, but the busy season is not the time to try your hand at the next obscure skill. Is this way of thinking too inconsistent for our customers? What’s wrong with scheduling ‘specialty’ services in the fall? Custom services don’t scale, and when you’re busy, you need to be scalable.

Call me crazy, but not for my focused ideas. Call me crazy cause I’m a mother trying to figure out how to get her six-year-old out of love and talking about alligators and river otters again!


Danielle Putnam is the President of The New Flat Rate and on the Advisory Board of Women in HVACR.

Service Roundtable is dedicated to growing your bottom line and helping your business maximize its full potential. These groups of contractors work together to assist you with marketing, sales, business, and so much more. Twice a month, seminars around the United States and Canada are held to network and further assist your business. Visit Service to see if there are Success Days in your area.