Is It Time to Sell or Grow?

Do not sell your pest control or lawn care business before it is the best time for you to do so!

How to determine when it is time…Grow and build your company exponentially until it is time to sell…Walk away with Million$ more…How to do that…

Let’s talk about it…

Is it time to sell or grow? I say this in all seriousness, even though I am also in the business of advising sellers/owners through the entire acquisition process: It may not be time for you to sell your business. In fact, selling your business now may turn out to be the worst financial mistake you ever made or will make. It may be the time to grow your company at an exponential rate and, thereby resulting in millions of dollars more in your pocket if you sell it later. That may only be a couple or a few years later. That may also mean that to get that done, you cannot continue to grow your business the way you have been growing it.

“If you want to know the secrets to exponential growth for your business like I did, contact Greg Clendenin. I first heard about The Clendenin Consulting Group at a Mergers and Acquisitions Seminar after I had come to own two 27-year-old businesses, one of which I founded, and the other being a competitor I bought. I had tried to grow both as big as I could get them, but their growth rate flattened at a place I did not want them to be. I knew the business could be greater. Greg's consulting changed my business and life in so many ways that I could not possibly list them all. We have been growing exponentially from his advice, and still are! In just two years, we have tripled the size of our business. This August, we grew over 80% over August of 2019. There is a new spark within our business and lives. Working with Greg was spectacular, as he was kind, concise, and methodical in his work. I cannot recommend him enough!"

Glenn Borochaner
President, Newtown Termite & Pest Control, Inc

Greg, Thought I’d share November’s performance with you! New Sales: 104% over last year. Almost all of this was recurring pest control and lawn spray business. Total revenue was 53% increase over last year. We are sitting at 24% over last year in revenue November YTD. Thank you again for your coaching!!"

Dale Mauro
Owner
Choice Pest Management
Ft. Pierce, FL

Quite often, I have owners contact me for a confidential conversation regarding the potential sale of their business. Some of them have definitely decided to sell. Others are pondering the idea and seriously exploring the potential of selling what is perhaps the lion’s share of their wealth/financial portfolio. They understand that selling their business may allow them the financial freedom to do what they want to do in the “second half”…or not.

Those who have made the firm decision have likely done so after much thought and introspection. Those who are not quite sure are going through somewhat the same process of thinking it through. In either case, I ask potential sellers a list of questions. At least half of the time, of those unsure, I recommend that they do not sell…YET, and for good reason.

When and if I arrive at the personal conclusion that they should not sell yet it is because: 1) I have a pretty good idea of what they can expect in terms of the purchase price range they would receive and how much money they would walk away with after taxes, etc. pursuant to hearing from them about some basic information regarding their company and, 2) I gain a picture of how they stand personally in terms of debt, financial obligations, lifestyle that the want to continue, etc.

The highly confidential questions we need answers to, in order to get some idea of what they would walk away with from the closing table, are questions such as, but not limited to, the following:

•How much was your revenue last year, this year YTD and the last trailing twelve months?
•What is your mix of services? By the way, The Clendenin Consulting Group has been very successful in selling not just PC companies but also lawn care companies.
•What percentage of total revenue is each of your lines of business?
•What percent of your revenue is recurring?
•What type of corporation is your business? By the way, being a C Corp is not the end of the world. We can explain.
•What is your rate of customer retention?
•What is the rate of your employee retention?
•What is your adjusted EBITDA after adding back the Seller’s Discretionary Earnings?
•What is the footprint of your business?

The highly confidential questions I ask to gain an understanding of the owner’s current personal situation and goals for life after the sale are questions such as but not necessarily limited to:

•Why do you want to sell?
•Is there anyone available, capable and trustworthy who can run the company while you are away fishing, hunting, spending time with kids and grandkids, traveling, sailing, etc.
•How much debt does your company have?
•How much personal debt do you have?
•How old are you?
•How much does it take in annual personal earnings to maintain the lifestyle you want to live post-sale and to pay for your future or your dependent’s future health, welfare, education and lifestyle as long as they are dependents?

After hearing these answers, I then suggest that they do not sale or that it sounds like a good time to sell.

If it is not time to sell, and if they agree, I then offer to consult for them to get the company to the size and with the characteristics that the company will need to have in order to get the purchase price needed to make sense of selling considering their personal position and goals they have in life.

There was a movie (Taken) starring Liam Neeson in which his daughter was taken by international mobsters and sex traffickers. Before they took his daughter, he had a chance to speak with one of them on a cell phone and warned them not to take his daughter because, as he said, “If you are looking for money, if you are looking for ransom, I can tell you I don’t have any money. But what I do have are a very particular set of skills, skills I have acquired over a very long career….” He then goes on to explain that they probably should not take his daughter.

Over the last 40 years or so, by way of unique experience, cumulative learning and a solid MBA education graduating with honors from an elite business school, I have acquired a unique set of skills and built a strong track record in growing companies organically and moving the majority of that increase in revenue to the bottom line. I have close partnerships and strategic alliances with others, as well. So, TCCG has the unique set of skills for anything your company may need to grow exponentially or to sell and get the very best deal for you. Our group can also successfully advise on the sell-side in other industries such as landscape (maintenance, install, design and build, snow plowing).

So, if it is time to sell, The Clendenin Consulting Group can take you from start to finish and get you the very best in terms of price, pricing structure, price allocation, terms and payout schedule. However, if it is not the time to sell, we can take you to exponential growth and to a point where you will be ready to sell and in a relatively short period of time.

More than once, I have had potential clients, who are now clients, call me and they are now on a path of real, sustainable exponential growth. Some had been in business for 20 years or more and were doing less than $2MM in revenue. They had good companies but not the revenue and/or the mix of revenue needed for them to get the purchase price needed to meet their goals. We have clients who have gone from no growth or very little growth to now growing 25% to 100% in revenue year over year after retaining TCCG.

Do not give up millions of dollars in purchase price because of what you have been able to do in the past. If you do less than 5 millon in revenue and you’ve been at it for 20-30 years and you have always wanted to grow exponentially, let’s have a confidential conversation before you decide to sell. Maybe it is time, maybe it isn’t. If it isn’t then you might leave millions on the table if you sell now.

That brings me to knowing what the potential of your company is if after I hear from you on the current situation and you make some changes. Let us work with you for just a relatively short period of time before selling if it isn’t time to sell. Your ROI will be very substantial.

Years ago, a dear friend of mine coined the phrase “the Rule of 23”. You may have heard it before. It is a good standard or target for larger companies, especially companies over $50MM dollars in annual revenue but not for companies under that who are desiring to grow exponentially. The Rule of 23 means that between the annual growth percentage rates of your top line and the margin of your bottom line, the number equals at least 23. So, if your revenue grew 15% in 2021 over 2020 and your profit margin is 8%, you met the rule of 23. I think the rule is applicable to the largest companies. It is not a good target for the smaller companies and, as I said, not for companies doing less than $50MM in annual revenue.

If your company is doing, for example, $2MM per year in annual revenue and you want to grow it exponentially, the Rule of 23 isn’t applicable or relevant; not in the world that I know exists and is waiting for you. Your growth alone in terms of percentage over the year before should be more than 23%.

It has been said that if you aim at nothing, you will hit it every time. If you aim low, you will likely hit even lower.

There is an acronym that you may have heard of before which is BHAGs. It means Big Hairy Audacious Goals. Establishing B-HAGs is only a part of getting your company on the path of exponential growth. Getting on a path of YOY exponential growth takes a whole system. As CEO of my company which we sold in 2005 at 16X EBITDA, I led our company’s growth from less than $500K in annual revenue to $35MM in annual revenue with no acquisitions. Our growth was all organic. In one 9 year run, we went from $8MM to $35MM…all organic…no acquisitions.

If you sell too early, you are giving up millions and possibly tens of millions of dollars in purchase price. Let’s talk. Do not be sold on selling too early. Below is a link to my bio and some contact information. Looking forward to having a no-obligation, confidential conversation.

https://www.theclendeninconsultinggroup.com/bio/ Email: gc@clendenincg.com Text: 407-948-0897

“We retained Greg Clendenin and The Clendenin Consulting Group to handle the most important business transaction of our life, the sale of our pest control company. In just over three months, Greg's team was able to bring the deal to the closing table and negotiated a great price and terms for us. In addition, the buyer has taken great care of our customers and our employees. We couldn't be happier with the outcome. Vicky and I would recommend The Clendenin Consulting Group without hesitation to anyone looking to sell their business."

Dan and Vicky Cassidy
Owners, The Bug Man