Have you ever wondered what triggers a business owner to sell?
Statistically speaking, the two most common reasons are 1) the owner is approached by an acquirer, and 2) a health scare causes the owner to realize they’re not going to live forever. In both cases, the founder is negotiating the sale of their business at a time when they didn’t expect to, which is a recipe for leaving gobs of money on the table.
For example, this week we interviewed Alexx Leyva, who was summoned home from Thailand when his father, the founder of Infinity Enterprise Lending Systems, was diagnosed with multiple sclerosis. Alexx and his brothers thought they were coming home to ready Infinity for sale, but what they discovered was a mess. The company had no processes, angry customers, and miserable employees.
There was no way the Leyva brothers could sell Infinity the way they had found it. Instead, they set about trying to fix it. Alexx had to let go of 12 of the 15 staff he inherited and professionalize the entire business. He started hiring again but this time articulated a clear mission, vision, and set of values for the team. He created systems, gave employees job scorecards, and professionalized the operation.
Over the next five years, the brothers grew Infinity from $3 million in sales to around $10 million, which is when they finally were able to take it to market. Ultimately they sold Infinity for more than $20 million. The story has a happy ending for the Leyva brothers, but it took five years to remodel the business. As Alexx shares in painful candor, the journey was bumpier than it needed to be.
“Never outshine the master.”
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– Alexx Leyva describing the downside of taking over a family business
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