Built to Sell Radio

In this episode of Built to Sell Radio you’re going to hear from Erik Huberman, who started Swag-of-the-month, a T-shirt business he quickly scaled from start-up to sale in 18 months.

Huberman considers the exit a success, but during negotiations there was one question the acquirer asked that Huberman wishes he had never answered

Rick Day built Daycom Systems into a $26 million dollar business over a 17-year run. Daycom sold phone systems but the company had a problem: it had become too reliant on one supplier.

Daycom sold phone systems but the company had a problem: it had become too reliant on one supplier in a business where the technology was changing fast. Motivated by the fear of becoming obsolete, Day decided to assemble an advisory board to help him prepare the business to sell. The board helped him to see his business through the eyes of a potential buyer and exposed a number of things that Day needed to fix.

Rick Day built Daycom Systems into a $26 million dollar business over a 17-year run. Daycom sold phone systems but the company had a problem: it had become too reliant on one supplier.

Daycom sold phone systems but the company had a problem: it had become too reliant on one supplier in a business where the technology was changing fast. Motivated by the fear of becoming obsolete, Day decided to assemble an advisory board to help him prepare the business to sell.  The board helped him to see his business through the eyes of a potential buyer and exposed a number of things that Day needed to fix.

Mark Patey started Prodigy Engineering in 2010 to help companies leverage hybrid engine technology. Four short years later, Patey accepted a multi-million dollar offer to buy the company.

Prodigy Engineering is the latest in Patey’s pattern of starting businesses for the purposes of scaling them and then quickly flipping them. Patey has flipped six companies, and his approach could be considered the counterbalance to the prevailing view that businesses should be built to last a lifetime.

When you get to know Patey, his compacted timelines start to make sense. He – like so many successful entrepreneurs – suffers from ADHD, a blessing and at times a curse. Patey credits his ADHD with much of his success at selling businesses.

Mark Patey started Prodigy Engineering in 2010 to help companies leverage hybrid engine technology. Four short years later, Patey accepted a multi-million dollar offer to buy the company.

Prodigy Engineering is the latest in Patey’s pattern of starting businesses for the purposes of scaling them and then quickly flipping them. Patey has flipped six companies, and his approach could be considered the counterbalance to the prevailing view that businesses should be built to last a lifetime.

When you get to know Patey, his compacted timelines start to make sense. He – like so many successful entrepreneurs – suffers from ADHD, a blessing and at times a curse.  Patey credits his ADHD with much of his success at selling businesses.

Andrew Yang had built Manhattan GMAT into an $11 million business when Kaplan Test Prep, an 800-pound gorilla in the education business, threatened legal action against his company. Rather than react defensively, Yang sought to build a relationship with Kaplan executives, who would eventually go on to buy Manhattan GMAT for more than 8 times EBITDA. To see how Yang turned a potential crisis into a clean offer of more than 8 times EBITDA.

Andrew Yang had built Manhattan GMAT into an $11 million business when Kaplan Test Prep, an 800-pound gorilla in the education business, threatened legal action against his company.
 
Rather than react defensively, Yang sought to build a relationship with Kaplan executives, who would eventually go on to buy Manhattan GMAT for more than 8 times EBITDA.
 
To see how Yang turned a potential crisis into a clean offer of more than 8 times EBITDA.

Derek Sivers sold CD Baby for $22 million dollars and decided to do something interesting with the money.

As an independent musician, Derek Sivers was blocked from selling his music through mainstream distribution channels, so he decided to start a company that would give his band, and other artists like him, a way to sell their music online.

The business grew as Sivers entered into distribution deals with iTunes and Amazon.

Ten years later, Sivers sold CD Baby for a cool $22 million dollars – and you’ll never believe what he did with the money.

Derek Sivers sold CD Baby for $22 million dollars and decided to do something interesting with the money.

As an independent musician, Derek Sivers was blocked from selling his music through mainstream distribution channels, so he decided to start a company that would give his band, and other artists like him, a way to sell their music online.

The business grew as Sivers entered into distribution deals with iTunes and Amazon.

Ten years later, Sivers sold CD Baby for a cool $22 million dollars – and you’ll never believe what he did with the money.

Small service-based businesses are typically not worth very much, but Walter Bergeron made one simple change to his business model that garnered a $10 M acquisition offer.

Bergeron started a small company servicing circuit boards for large food processing plants. It was a “break/fix” business with lumpy demand and cash flow.

Struggling to grow, Bergeron starting offering a membership model where instead of calling when they had a machine to repair, subscribers paid a monthly fee so they could have their circuit boards serviced at any time.

The switch to a membership model transformed the business and Bergeron quickly grew the company to $7 million in annual sales, at which point he was offered $10 million to sell it.