Episode 11 of the Cordant Wealth Partners’ Podcast Series
Nurturing a small business to maximize its potential while dodging the risks, plus preparing a business for exit when a business founder wants out are the topics on today’s podcast.
You will meet Jeff Kadlic, who started his career in commercial lending, then moved into institutional investing. During his time in the investment sector, he was exposed to private equity funds. He kept seeing smaller successful companies that didn’t have access to capital, but were overlooked by the larger investors. Today, Jeff is an advocate for small business owners, and his company, Evolution Capital Partners, dedicates itself exclusively to this market. There’s lots to learn in this episode! Take a listen as Scott and Jeff chat.
- Farming system for “the big leagues”
- Target: small businesses with 500k – 3mil operating profit
- Professionalizing great small businesses to make them attractive to institutional buyers
- Maximizing potential
- Fundamental of accurate and timely financial reporting
- Fundamental of achievable and measurable strategic plan
- Fundamental of aligned and experienced management team
- Fundamental of transparent & accountable team members
- Fundamental of effective and repeatable sales process
- When business owners want out: exit strategies
- Business is completely dependent on its founder
- Ways in which a founder hurts or adds to value
- Checking your ego
- What is the business really worth?
- Start preparing at least 2 years in advance
- The importance of being emotionally balanced
- The value of most peoples net worth is tied up in their business
- How to know when it’s time to sell
- Making sure business is running optimally during the sales process
- Investing in the best team that you can afford to get you to the desired result
- Financial consequences resulting from sale process
- Later consequences “representations and warranties”
- What is the importance of having a board of advisors?
- Preparing for your company exit
- Buyers generally look at last 3 years historical financials
- Some buyers also ask for 5 years projections
- Filling in the gaps where the challenges are
- Continuing to learn and push yourself every day to do better – utilizing coaches
Book: “Shoe Dog”, by Phil Knight