The External vs. Internal Sale
June 22, 2016 |
Want to increase the value of your business by up to 71%?
Take the 13-minute survey and get your Value Builder Score
About this episode
Subscribe:
Barry Wood sold two virtually identical businesses over an 18 year period. The first was external and the second, internal. His exits clearly show the differences in an as close to apples-to-apples comparison as possible. The pros and cons may surprise.
When the time comes, do you want to sell your business externally, or internally to your employees or family members?
Once you decide, a little piece of you may always wonder how the other option would have played out. That’s why the story of Barry Wood is such an interesting case study. Wood is a door guy, who started M&I Door Systems in 1995, sold M&I in 1998, and then started another – virtually identical – door business in 2003, only to sell it in 2013.
Wood sold his first door business externally and his second internally, so his two exits allow us to see clearly the differences between these two types of sale with an as close to apples-to-apples comparison as possible. The pros and cons of selling externally rather than internally may surprise you.
You may be wondering how your Value Builder Score affects your likelihood of a successful external vs. internal exit. Generally speaking, the higher your Value Builder Score, the more likely you are to have a business that will be attractive to both internal and external buyers. To get your Value Builder Score, complete this questionnaire.
Our guest
Barry Wood is CEO of Ontario Excavac Inc., a leading provider of hydro-excavation, infrastructure, renewal and improvement services to the utilities sector in south-central Ontario. Wood is an experienced, engaging and energetic CEO. He has a solid record of leading the acquisition of small to mid-sized manufacturing, distribution and service businesses and then growing and evolving them into polished and valued legacy businesses. Wood has worked internationally, setting up joint ventures in Asia and Europe, and he has worked with customers and suppliers ranging from the small to the largest multi-national companies. Wood has successfully bought four businesses in succession situations and executed two start-ups. He is a recognized leader in implementing continuous improvement and lean enterprise practices.Boost the Value of Your Business
Sign up for a copy of The Subscription Economy: 9 Subscription Models Any Business Can Adopt eBook
Download Now
Related to this topic
How To Get Acquired By A Partner
Adam Ochstein started an HR software company called StratEx in the depths of the 2008 recession. CEOs were asking HR managers to do more with less and Ochstein’s software promised to help HR managers do just that. Despite the challenging economic environment, StratEx was an early success and was particularly popular with restaurants. Ochstein decided to focus on the hospitality sector and forged a partnership with Toast, one of the fastest-growing Point of Sale (POS) providers serving restaurants. The collaboration was a success, and StratEx ballooned to 160 employees.
Rick Martinez is a military nurse who stumbled into the staffing business by accident and grew his company to 600 employees. Then, when he decided to sell his business, he took a surprisingly zen-like approach to negotiating the deal.
How to negotiate an extra $1M in the sale of your business overnight
After building his business for twenty years, Stuart Crane sold it for $43M, which includes an extra million he got by using this one simple technique.
The One Question You Never Answer
, a T-shirt business he quickly scaled from start-up to sale in 18 months.
How to Hire a CEO Without Losing Your Company
When we discover a vaccine or reliable treatment regime for COVID-19, there will inevitably be an unscrupulous gang of counterfeiters trying to make a quick buck by selling fake remedies.
How to Package Your Service Into a Product
Michael Spinosa and Scott Greenwell started a digital marketing agency called Unleashed Technologies at the start of the 2007 financial crisis. Spinosa believes the recession helped Unleashed get started because their flexibility and lower fees enabled them to pick up business from larger rivals who were losing customers amid cost-cutting. By 2019, Unleashed had grown to over $6 million in revenue when they were approached by LINC Partners, a private equity-backed group looking to do a role up of digital marketing agencies.
