Are you contemplating selling your business or creating an exit strategy ? It could be tempting to jump into the process of selling your business without...
How I Sold My Business – Matt Wakelin
Our ongoing series of discussions with small-business owners about their business selling experience continues as we talk with the former owner of Treasure Chest Foods, Mr. Matt Wakelin. As the long-time owner of a company specializing in high-quality meats and seafood delivered “to your door,” Matt knew that his business was valuable, but the first two business brokers he worked with might not have seen it that way. On this edition of Deal Talk, Matt shares his experience working with brokers who seemed to be more motivated by their commission check, until he connected with a company that put his business first and got him the results he had wanted from the start.
Questions Answered For You
- What does a business owner need to do to get his or her company ready to sell?
- How is Morgan & Westfield different from other business brokerage firms?
- How long does it take to sell a business?
- What was the most challenging part of selling your business?
- Based on your experience selling your company, is there anything that you will do differently the next time you sell another business?
Two years, two brokers, not much response… the second broker by the end of the first year told me that he didn't even want to re-list with me. He didn't think it was really sellable. I didn't believe he was right, and I knew that my business had value and it was worth something to somebody, and it was just a matter of finding who.
Key Takeaways To Remember
- Selling a business is a journey. As you go through the steps of selling your company, you will get to appreciate your business’s value more. This helps you to effectively show the buyers the true value of your company. So, when brokers tell you that your business is not sellable, don’t believe them. You know that your business has a value. You just need to find the right buyer.
- As a seller, you should not list your business at a price higher than what you can negotiate with potential buyers just to be able to pay about $10,000-$15,000 commission to some brokerage firms.
- Keeping accurate, professional records, aside from running the business well, is key in preparing your business for sale.
- Morgan & Westfield prepares a comprehensive business portfolio that provides prospective buyers a complete overview of the business including detailed financial records. This business portfolio, according to Matt Wakelin, has “made so much difference” in showing potential buyers the true value of his company and eventually successfully selling his business.
From our studio in Southern California, with guest experts from across the country and around the world this is "Deal Talk," brought to you by Morgan & Westfield, nationwide leader in business sales and appraisals. Now, here's your host, Jeff Allen.
Jeff: Hello and welcome back to the web's number one content source for small business owners committed to building a business for eventual sale. Here on "Deal Talk" it's our mission to provide information and guidance from our growing list of trusted experts that you and all small business owners can use to help you build your bottom line and improve your company's value .
As part of our ongoing series of shows where we get a chance to talk with the business owners themselves who have sold their companies and lived to tell about it. On this edition we're talking with Matt Wakelin, former owner of Treasure Chest Foods, LLC, a home delivery service of high quality meats and seafood on the East Coast. Matt Wakelin, welcome to "Deal Talk," sir, it's good to have you.
Matt: Thanks, Jeff. It's good to be here.
I was absolutely happy with that price. The other brokers wanted me to list a good chunk higher than what I wanted to negotiate. I would say don't list a price higher to negotiate, don't list a price higher to pay that $10,000-$15,000 plus commission to some brokerage firm. Set it out at a good price and then stay firm on your price, because the business is worth it. And that worked for me.
Matt: I got into this business in 1985 and I started my own business doing this in 1988. I've been doing this business for 31 years, and it's been a really good business, very profitable and a lot of freedom and a lot of work too. I decided to move back to upstate New York and sell my business.
Jeff: Did you sell your business because you wanted to head back home and just retire, or you've done everything that you felt that you could do with the company? And give us some insight as to the decision process that you had in deciding to sell your company.
Matt: Well, I actually moved back to New York before I had the business sold and I was driving back and forth like 600 miles each way about once a month to run the business, because I didn't want to let it die and I was trying to sell it. And it took me a while until I found a way to get it sold quickly.
Jeff: Your business is actually located precisely where then, Matt?
Matt: The home base Toledo, Ohio. It's actually located in Maumee, which is a suburb of Toledo and I serviced about an 80-mile radius surrounding Toledo, Ohio.
Jeff: Was the decision to finally sell your company, Treasure Chest Foods, something that you had to wrestle with? Or were you pretty much ready to sell and you were committed, and you just woke up one day and said, "Nope, I'm ready. Let's go ahead and let's do it."
Matt: No, I was definitely ready to sell and I definitely knew that I was going to sell it if I could, and I wasn't even sure I could.
Jeff: Tell us, had you had any businesses before then that you had any previous experience selling?
Matt: No, not at all, just this one.
Jeff: And any idea at all, once you kind of started thinking and you got through maybe the initial should I or should I not do this. Once you got through this did you have any idea about how you were going to start the process or where you were going to begin?
Matt: I started with just putting it on Craigslist, and I didn't really think of listing with a broker right away. And then I finally decided to start looking into ways to sell it to get some help.
Jeff: When you were getting help initially, who did you call, who did you talk to? Relatives, friends, other business owners, just kind of fill us in on that on your mind-set.
Matt: Word of mouth, people I know. And then I found a business broker three years ago who wanted to list it with like a $15,000 minimum commission, and I actually signed up with them and I got very little responses. And that was for a year. And then another year I signed up with another broker who wanted $1,500 down to advertise. And there's another broker, a big name company who wanted $2,800 to list my business. And I went with the guy who's worth $1,500. He was local in Toledo, and I was listed for a year and we got very few responses. And I was beginning to think after two years I just wasn't going to be able to sell it.
Jeff: This went on for how long? You had kind of bounced back and forth between a couple of companies.
Matt: Two years, two brokers, not much response. And actually the second broker by the end of the first year told me that he didn't even want to re-list with me. He didn't think it was really sellable and suggested I just leave it, go, or sell the customer list to my competitors, and get rid of the truck and stuff. And I get an email from him. He wouldn't even relist the second year with me.
Jeff: So he just kind of wanted to wash his hands of the whole thing and he suggested you do the same.
Matt: Yeah, he did. I was surprised. I just wanted to give it another year. I spent $1,500 to advertise it and got very little responses.
Jeff: And during this time, of course, you had to, obviously, you're continuing to run your business and continuing to be profitable. Did that kind of harden your resolve? Or were you at any point at that stage kind of thinking, "Maybe he's right."
Matt: I didn't believe he was right, and I knew that my business had value and it was worth something to somebody, and it was just a matter of finding who. So at that point I went on the internet and I started Googling for more business brokers and I found Morgan & Westfield. And I contacted the company. I had a good talk with them, and all the things that I had come to believe with the last two brokers, he kept telling me, "No, that's not true. You can do this. Try this. We've got a great marketing plan."
And he was very encouraging, and so I decided to give it a try. First I got a few responses, and what occurred was that with the other brokers, with the $10,000 or $15,000 in commission, I had my business marked up for that. And they both advised I mark it up another $10,000-$15,000. If someone came along, didn't make an offer on it, and I could come down on the price to put the deal together.
After a couple of months I decided, you know what, I dropped it down to the lowest price I would take. My bottom line and that's the price I put in and I wasn't going to budge. And I knew selling at that price, full price, what I advertised, and I got my money. But as soon as I dropped that price I start getting responses. Morgan & Westfield put it on, like, 11 different websites nationally and that was the first time. I was going to respond left and right and eight months later I had two buyers at the same time that wanted the business.
Jeff: So it sounds to me that the company, Morgan & Westfield, had a real immersive kind of a plan for reaching out online through a number of different sources and that may have been part of the difference maker there. Tell me again, just to reiterate, Matt, how long was it before you first started receiving some responses after they had begun that marketing campaign for you?
Matt: Within the first couple of months I had two or three responses. And I had it listed at a pretty higher price someone was willing to take. And once I just brought it down to my bottom line, which I'd be totally be happy with selling for, I started to get six to eight responses a month.
And what was nice, too, is that Morgan & Westfield offered me a business portfolio. He charged me just $500 for a 35-page portfolio. And I have one from the other business brokers. I go, "Why can't I use this one?" And they say, "Ours had this and that.” And so I paid the $500, I got this business portfolio. So when I got responses I was able to email this complete overview of my business with pictures and exact figures and stuff, very professional. That was huge. That just made so much difference. It was so worth the money to have that done.
Jeff: And the other companies didn't offer you anything like that?
Matt: Well, they offered a business portfolio, but the ones that I got that were included were nothing compared to what Morgan & Westfield offered me. In the first several pages of the business portfolio was teaching people how to buy a business. That was totally awesome. So someone would get an email and they'd get a step-by-step process in how to buy a business. That was so good because people need to be educated in how to buy a business. Most people out there had never bought a business before.
Well, they [other business brokers] offered a business portfolio, but the ones that I got that were included were nothing compared to what Morgan & Westfield offered me… very professional. That was huge. That just made so much difference. It was so worth the money to have that done.
Tell me a little bit then, Matt, how long did it take from the time that you began working with Morgan & Westfield to sell your company at the beginning of that sales process to the end when you finally were able to close the deal?
Matt: It would be about eight or nine months. And I ended up with a buyer who really wanted it. Basically, in my delivery service I would offer, like, he could ride a day with me on the route. And I had one guy I met with who wanted to ride with me, and another guy met with me and he did ride with me. And the second guy wanted to ride with me now and I told the first guy that if you want to give me a non-refundable deposit, $10,000, I won't have the second guy ride on the route, it's yours. I'm not going to play you against each other.
And the guy rode with me on the route and gave me $10,000 non-refundable, done deal. And that was it. The business at that point was pretty much sold. And then we just waited until I could run him through the route again, and I got the rest of the money. And that was it, it just went really smooth.
Jeff: That was huge. It sounds like it went really, really well for you and it just kind of eclipsed your expectations maybe in particular, Matt, after the experiences that you had with the other people who tried to help you sell your company but weren't successful in doing so.
I'd like to take just a second to kind of go back to the beginning of the process when you were thinking about selling and you were doing everything that you felt that you needed to do in order to get your business ready. Kind of take us through that process, Matt, when you knew that you had to do certain things to get your company ready sell. What did you in fact have to do and who did you involve in the process of getting ready and getting all your financials and everything snugged down?
Matt: Initially, it was like taking some pictures, giving him an idea on what the product line was. Then with the other two brokers it was just kind of piecemeal, like different things being pieced together, and I would type up this thing and that thing about the profit, about the history. And when I got that 35-page portfolio from Morgan & Westfield then I was really able to quantify everything in a nice flow. And there were so many different wonderful questions down there to answer about my business so people would really understand what my business was about.
By just going through that step-by-step in such a professional way I was able to really make clear what my business was all about. And I came up with a way to present my business when I met in person with someone so they could see what was going on. And it was more than just showing them my tax returns . I ended up copying my bank statements so they could see the deposits. I ended up copying checks from my sales so they could see the sales. When someone sits down with me I can prove to them what my business is doing in black and white. And so when I did get a couple of buyers I can show them that, they knew right away that what I was saying is true is I could prove it to them.
Jeff: Were you given kind of a checklist of things that needed to be done on your end by Morgan & Westfield, Matt? In order to make sure that your business was as ready as it had to be from a financial and legal perspective, if you would, kind of a to-do list of things that you had to put together for them? And were they helpful in helping you get those items together?
Matt: Absolutely. There's a complete list of all kinds of information on my business, things I never thought to tell people, like, I would assume that people knew about my business, but they really didn't. Because without this question they won't even know what questions to ask. So I have the questions for them before they even came up with the questions themselves.
Jeff: That's really important. Matt, so far so good. I really enjoyed talking to you in this first segment about kind of the experience that you had with the two companies that wasn’t so good. And then of course you found Morgan & Westfield and started working through them a little bit to help you get your business ready for sale. We're going to continue our conversation with you here in just a moment. We're going to hear more about the process.
And then also, too, I'd like to kind of hear a little bit about what you're doing post-sale of your business, just to kind of hear how you're kind of transitioning into your new retired life, Matt. I know that you've got a lot of other things that you have planned for yourself and no doubt your family as well. You're listening to a business seller, former business owner talk about having sold his business in his own words, how that process went within the experience that he had, and you're going to hear more of that discussion with Matt Wakelin. He is the former owner of Treasure Chest Foods, LLC. My name is Jeff Allen, we'll be back when "Deal Talk" resumes after this.
If you'd like to share your knowledge and expertise on any subject related to selling businesses or helping business owners improve the value of their companies, we'd like to talk with you about joining us as a guest on the future edition of Deal Talk.
Interested? Contact our host Jeff Allen directly. Just send a brief email with "I'd like to be a guest" in the subject line. In a brief message include your name, title, area of specialty, and contact information, and send it to email@example.com, that's firstname.lastname@example.org.
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That's why it's important to work with a team whose one and only specialty is selling businesses throughout the United States. Morgan & Westfield will help you every step of the way. From helping you plan your exit strategy , to preparing a comprehensive appraisal, and locating the right buyers.
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Call Morgan & Westfield for a free consultation at 888-693-7834, 888-693-7834, or visit morganandwestfield.com.
Jeff: My name is Jeff Allen, I'm visiting with Matt Wakelin. He is the former owner of Treasure Chest Foods. We're talking about his experience having sold his business, and he, of course, is off enjoying life but doing some other things, and we're going to get to that here in just a minute. Matt, before we do talk about what you're doing now after Treasure Chest Foods, I wanted to go back and just kind of finish our discussion a little bit.
In the sales process, oftentimes we talk to business owners who go through the process in the various stages of selling their business and oftentimes there are periods where their stress might begin to mount a little bit because there are a number of things to do, and questions to answer, and things to get ready in order to help them prepare and sell their business finally once and for all.
Was there any of that that you went through, any stress, any periods of anxiety where you were wondering if you were doing the right thing, or just some periods during the process where you felt like you needed some additional help in order to maybe run your business or something? Kind of tell us in your own words if you went through any of that.
Matt: Well, the times where I wasn't getting any responses and then of course when the one broker told me that he didn't think my business was sellable and I was beginning to think I was never going to sell. I was just going to either keep driving back and forth from New York to Ohio or just give it up and lose any value of the business. That's the most difficult part.
And also I dig through responses. A lot of the perspective buyers, they were just kind of … they weren't really that interested. And some of the reasons they decided to not buy weren't good reasons, but I couldn't really communicate with them how my business really was. They got in their mind how it was and they made choices that I didn't think were accurate.
A lot of the prospective buyers … they weren't really that interested. Some of the reasons they decided to not buy weren't good reasons, but I couldn't really communicate with them how my business really was. They got in their mind how it was and they made choices that I didn't think were accurate.
Matt: It was easy for me to prepare my business. So once I got mine set up, like what questions and things like that, which help with the business portfolio that I have.
Jeff: Is there anything that you think that you might have done differently or next time when you sell your next company, and we'll get into that here in a minute, that you might do differently in order to either help with the process and better prepare you and your mind-set or your team, anything else at all that you think that you would do differently?
Matt: I would say better record keeping. I think a business that was set up on QuickBooks that was very visual and professionally done. QuickBooks is a great idea I think. I ended up working with just the paperwork stuff but something really exact or you could really see everything the business is doing is what I'd do differently.
Jeff: Kind of at a glance, and it's tight, and kind of cohesive from page to page, quarter to quarter, year to year, very, very good. And as you know, Quicken is probably one of the most relied upon software programs there is, accounting programs there is, for many businesses today and very popular indeed. If a business owner came to you, Matt, now that you've sold your company, came to you asking for advice about selling their business, what would you tell them based on your experience?
Matt: Other than the record keeping, I would definitely refer them to Morgan & Westfield. I just paid a $150 marketing fee and $500 for the portfolio. I didn't end up shelling out $10,000-$15,000 in commission to a brokerage company. That was definitely the way to go. And your marketing plan was so effective.
Jeff: And you got a price that obviously you are happy with, correct?
Matt: Yeah, I was absolutely happy with that price. The other brokers wanted me to list a good chunk higher than what I wanted to negotiate. I would say don't list a price higher to negotiate, don't list a price higher to pay that $10,000-$15,000 plus commission to some brokerage firm. Set it out at a good price and then stay firm on your price, because the business is worth it. And that worked for me.
Jeff: Matt, it sounds like overall a pretty positive experience in having sold your company, and in using Morgan & Westfield to help you do that. Did you know, when you started to think about selling your company, what was it that you wanted to do afterward? Did you have any plans that you had made at that point?
Matt: Well, my social life is in upstate New York, and I have reason to be here. I have a couple of my buddies here in upstate New York that used to go door-to-door with high quality meats and seafood, and now they're in the residential solar business. And I got back here and took some time off and I decided I wanted to do the solar business.
It's also a door-to-door business and I like it, knocking on doors, meeting people, being outside. That's what I'm going to do right now. I can run it part-time and it could be a good semi-retirement business where I can make some good money and maximize my skills and abilities with in-home sales.
Jeff: You know, it's really interesting, isn't it, that there are some industries out there that still thrive on those knocking on door types of methods that most of us kind of feel have gone by the wayside over the years? But that old process of foot to the pavement and walking along through neighborhoods knocking on doors, that's still very effective for some kinds of businesses, and solar is the one that really comes to mind as much today as any other.
What is it that attracted you to the solar industry? Do you think it was mostly for the opportunity to work with friends there closer to home and do something like that? Or is it maybe also to the possibility that solar energy does in fact provide that sustainable energy resource that so many people have been talking about is not being such a future reality but something that could really benefit people today?
Matt: Yeah, definitely helping the environment. But I also like the idea of, I still like being self-employed, because I can come and go as I please, and work at my own pace, and get my own car, and I can drive around, and I can look for homes that qualify for solar, get out and knock on their door. In a way it's similar to like building the meat business, just out there looking for customers. And when you find a qualified customer it can be a real easy sell and everything makes sense to them.
Jeff: Matt, we've had a chance on this program to talk to authors and business advisers who have made part of their careers to counsel business owners about their exit strategies and succession plans when it comes to thinking about leaving their business and selling their companies somewhere down the line. What would you suggest to those people who may not really be thinking about the end game, I mean, what it's going to be like once they leave their business? Is there any advice that you can give to people who may not necessarily have any plans right now for that day when they do in fact sell their companies?
Matt: I would say just keep good records and just keep running the business well, and do something to increase the business at least a little bit instead of let it die. So just keep putting the effort in. And it's nice to just ask around, and you don't have to necessarily tell people you're thinking about selling your business, but you can ask people what they think about your business and have they ever thought of owning one, and talk positively to people by word of mouth about it and you might come up with someone who's interested in it or knows somebody that knows somebody. But I think the record keeping is really key so you can show somebody the value of your business.
Jeff: With that thought and going out on that positive note, I want to thank you so much for participating here on "Deal Talk" today. It was really nice to chat with you, and nice to hear about how things are going on with you now after having sold your business, Treasure Chest Foods. And thank you once again for joining us today. We appreciate it.
Matt: All right, Jeff, thanks for having me.
Jeff: That's Matt Wakelin. He is the former owner of Treasure Chest Foods, and now he's doing other things after having sold his business successfully. And we would once again like to thank him for joining us on this program.
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My name is Jeff Allen. I appreciate you joining us once again on "Deal Talk," brought to you by Morgan & Westfield, a nationwide leader in business sales and appraisals. Learn more at morganandwestfield.com. Until next time, Jeff Allen, thanks so much for listening. We'll talk to you again soon.
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