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How Core Values Helped Jay B Sauceda Build and Sell a $14 Million Business | Built to Sell Radio

October 20, 2023 |  

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J.B. Sauceda built a logistics company that helped brands like Howler Brothers ship online orders. At their peak, Sauceda’s company had a 150,000 square foot warehouse, 150 employees and was on track to hit $14 million in annual sales when a fateful meeting at an industry conference led Cart.com to make an acquisition offer Sauceda couldn’t refuse. In this episode, you’ll discover how to:

  • Recruit hourly workers.
  • Write a job description that garners attention from candidates.
  • Retain and drive engagement among hourly workers.
  • Reduce your company’s reliance on you (even if your surname is in your company name).
  • Reprimand employees without losing your cool (or your staff).
  • Value your company in a partnership break up.
  • Adjust your EBITDA to boost the value of your business.
  • Avoid the most common reasons acquisition offers fall apart.
  • Negotiate a Letter of Intent with an acquirer.
  • Deal with life after you sell.
  • Delineate between a leader and a manager.

Show Notes & Links

Howler Brothers
Official Press Release
Connect with Jay B

What is a 3PL?

A 3PL, or Third-Party Logistics provider, is like a middleman for companies that need help with their shipping and logistics. Imagine you have a small business and you sell products online. You need to get those products from your warehouse to your customers, but it can be a complex process.
Here’s where a 3PL comes in: They’re a company that specializes in handling all the steps involved in moving your products. They can store your inventory in their warehouses, pack your orders, and even handle the shipping and tracking of those orders to your customers. It’s like having a logistics expert on your team without actually hiring one.

Check out our article on am Approach To Hiring High-Potential Employees.

Curious about what your company might be worth? Start with a Built to Sell Valuation.

Definitions

Letter of Intent (LOI): This document outlines the basic terms and conditions of a deal before a formal agreement is drawn up. It serves as a mutual commitment between the buyer and the seller to move forward with the transaction on the agreed-upon terms.

Adjusted EBITDA: Earnings before interest, taxes, depreciation, and amortization, adjusted to reflect the profitability of your business in a buyer’s hands. Typical adjustments that may drive up reported EBITDA would be things like executive compensation (assuming you’re paying yourself more than it would cost to replace you with a general manager), personal travel, automobile expenses, one-time extraordinary expenses (such as a lawsuit), etc.

Due-Diligence: This is a comprehensive appraisal of a business or investment undertaken before a merger, acquisition, or investment. It seeks to validate the information provided and uncover any potential risks or liabilities.

Earn-out: This is a financing arrangement for the purchase of a business, where the seller must meet certain performance goals before receiving the full purchase price. It reduces the buyer’s risk and attempts to align the interests of both parties post-acquisition.

Re-Trading: This occurs when a buyer attempts to renegotiate the purchase price of a deal after initially agreeing to one. It is often seen unfavorably as it occurs after due diligence, seemingly exploiting newly discovered information.

Quality of earnings (or “Q of E”): When an acquirer has secured an exclusive position to purchase your business via an LOI, and the transaction is over $1 million or $2 million in value, the acquirer will often hire an outside CPA firm that specializes in reviewing financial documentation, to provide an analysis of your historical EBITDA compared with the values provided in your Confidential Information Memorandum (CIM). A Q of E report can often be a milestone, enabling an acquirer to consider a major portion of their due diligence completed.

Check out our full M&A Glossary

About Our Guest

Jay B Sauceda

With over 15 years of experience in advertising, media, and e-commerce, Jay B. Sauceda is a culture-focused builder who has a deep appreciation for good stories, firm handshakes, and porch beers. He has co-founded and led several successful businesses, including Two Corgs LLC, PUBLIC SCHOOL, and Sauceda Industries, which was acquired by Cart.com in 2021.

Jay is driven by a passion for helping people connect the dots and fostering empathy among individuals. He firmly believes that storytelling and community building are the cornerstones of creating lasting value and impact in both business and life.

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