July 27, 2022 • 40 mins
It takes a lot of effort and time to plan an exit strategy for your company, especially if you don't know much about it. It is best to hire an experienced expert to complete these tasks. In this episode, Kit invited Caroline Young, the CEO and founder of Craftsbury Consulting, a business consultancy that provides assistance with exit planning, preparedness, and executive coaching. Caroline discusses her personal experiences as well as how she started her consulting firm. She continues by outlining their services, which include business coaching and exit planning. She also talks about her expertise in M&A and how she used her abilities to help her clients succeed. If you're interested in learning more about organic growth, growth by acquisition, or the sale of your company, this will be interesting and useful for you.
Key Takeaways
Caroline's Business Coaching and Exit planning services
The definition of Private Equity
Caroline's Business Coaching and the 360 feedback
Caroline's approach to exit planning strategy
Quotes
"I love learning about new companies and helping people, find the strength of that company in a way that buyers are going to fall in love with it." - Caroline
"I'm not a certified coach, but leveraging my experience to help people has been super effective." - Caroline
Featured in this Episode
Christopher Lisle
Growth strategy advisor for the ecosystem of investors, banks, and the companies they work with (middle market).
Linkedin: https://www.linkedin.com/in/kit-lisle
Websites: Acclaropartners.com / strategicgrowthcouncil.com
Contact: kit@strategicgrowthcouncil.com / 703-867-7269
Caroline Young
CEO and Founder of Craftsbury Consulting
Linkedin: https://www.linkedin.com/in/caroline-young-b634332b
Profile: https://craftsburyconsulting.com/about-us/meet-craftsburys-founder
Company Website: https://craftsburyconsulting.com/
Words from our Sponsors
Thanks to our sponsors Acclaro Growth Partners, a strategic consulting firm serving middle market mergers and acquisitions. You can visit acclaropartners.com. Our other sponsor, of course, is Strategic Growth Council, not the podcast, but the Peer Advisory Council slash virtual roundtable slash mastermind group for senior execs and business owners. Contemplating what an acquisition, a sale, or just strategic growth is? Strategic Growth Council collaborates with participants in the M&A ecosystem, such as private equity groups, lenders, investment banks, and relevant service providers. Visit strategicgrowthcouncil.com to learn more.
Chapters
00:00 Introduction
01:45 Guest's background and what she does
08:13 coaching and exit planning services
10:08 What is private equity?
13:34 Business coaching
15:13 Importance of feedback
20:35 Caroline's edge compare to other coaches
22:11 Are there people who are uncoachable?
23:56 Preparing the business for sale
26:21 Entrepreneurial operating system
27:34 Some case studies
36:42 About retreat and how to reach Caroline
This podcast is produced by Heartcast Media
https://www.heartcastmedia.com/
Key Takeaways
Caroline's Business Coaching and Exit planning services
The definition of Private Equity
Caroline's Business Coaching and the 360 feedback
Caroline's approach to exit planning strategy
Quotes
"I love learning about new companies and helping people, find the strength of that company in a way that buyers are going to fall in love with it." - Caroline
"I'm not a certified coach, but leveraging my experience to help people has been super effective." - Caroline
Featured in this Episode
Christopher Lisle
Growth strategy advisor for the ecosystem of investors, banks, and the companies they work with (middle market).
Linkedin: https://www.linkedin.com/in/kit-lisle
Websites: Acclaropartners.com / strategicgrowthcouncil.com
Contact: kit@strategicgrowthcouncil.com / 703-867-7269
Caroline Young
CEO and Founder of Craftsbury Consulting
Linkedin: https://www.linkedin.com/in/caroline-young-b634332b
Profile: https://craftsburyconsulting.com/about-us/meet-craftsburys-founder
Company Website: https://craftsburyconsulting.com/
Words from our Sponsors
Thanks to our sponsors Acclaro Growth Partners, a strategic consulting firm serving middle market mergers and acquisitions. You can visit acclaropartners.com. Our other sponsor, of course, is Strategic Growth Council, not the podcast, but the Peer Advisory Council slash virtual roundtable slash mastermind group for senior execs and business owners. Contemplating what an acquisition, a sale, or just strategic growth is? Strategic Growth Council collaborates with participants in the M&A ecosystem, such as private equity groups, lenders, investment banks, and relevant service providers. Visit strategicgrowthcouncil.com to learn more.
Chapters
00:00 Introduction
01:45 Guest's background and what she does
08:13 coaching and exit planning services
10:08 What is private equity?
13:34 Business coaching
15:13 Importance of feedback
20:35 Caroline's edge compare to other coaches
22:11 Are there people who are uncoachable?
23:56 Preparing the business for sale
26:21 Entrepreneurial operating system
27:34 Some case studies
36:42 About retreat and how to reach Caroline
This podcast is produced by Heartcast Media
https://www.heartcastmedia.com/
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:09):
Welcome to Strategic Growth Counsel, apodcast about strategic growth and mergers and acquisitions
for the middle market. Now.Strategic Growth Council also provides growth strategy planning,
work and peer advisory roundtables that meetvirtually every month. We focus on
solving members cases or business dilemmas asa group, intentionally, consistently and as
(00:36):
a dedicated support team for one another. I serve as the moderator. Just
contact me to learn more at StrategicGrowth Council dot com. But this this
is our podcast. Then if you'reinterested in learning more about organic growth,
growth by acquisition or the sale ofyour company, this show will be interesting
and useful for you. Thank youto our sponsor, a Claro Growth Partners,
(01:00):
a strategy consulting firms serving middle marketM and A. Visit a claropartners
dot com. Every episode I interviewan expert or participant in the world of
strategy growth in M and A,and today I'm pleased that I'm joined by
Caroline Young of Craftsbury Consulting, whichofficer offers exit planning, preparation and executive
(01:22):
coaching. Caroline, Welcome, thankyou, happy to be here. Awesome,
well I'd love to hear you know, I typically say thirty to sixty
seconds worth of background on your experience, what brought you to this point in
your career. So love to hearmore about your your experiences historically and then
where we are today. Absolutely,and I have to tell you it's probably
(01:46):
gonna take more than sixty seconds becausewhere I am today was so shaped and
influenced by where I came from,so grep and Vermont. I went to
UVA for law school, and lawschool, I didn't really know what I
was going to do, but Iwas dang sure I wasn't going to be
a litigator because it scared the crapout of me. So ended up coming
(02:08):
to Indianapolis joining the law firm,and they instantly put me in the litigation
group, which was just as scaryas I thought. But it was great
at getting me out of my comfortune, figuring out how to present to
an audience so that they would connectto it. You figure out negotiation skills,
all those things, and it wasgreat, but it I never loved
(02:29):
it. You're always bunking head.So two, I'm going to interrupt.
I told I warned you I probablywould, So I went to UVA as
well, and I would go overto the UVA Law School and get some
books or do do some studying.And there were a couple of things that
I noticed when I went to theDarden Business School. You know, people
(02:50):
were socializing, hanging out, youknow, just sort of like a fun
atmosphere. And then in the lawschool library, Oh my goodness, you
guys were so serious. You know, that's so funny. You say that,
because I would say the Opposite's probablybecause all the law students were over
there at the Darden library, becauseI felt like we had way more fun
than they did. And it wasjust it was a great school. Depends
(03:12):
on what year. I guess myyear was the first years. Well that's
true. First years is a littlescarier. But it was a great school,
and so glad I went there,and so glad I did the litigation
piece because I learned so much fromit, but happily moved on to private
equity and I remained in private equityfor twenty years. Great firm called HKW
(03:36):
started out doing some legal work thereand quickly realized that wasn't the value proposition
I wanted for myself for the firm, so I maneuvered my way onto more
of an OPS role and I becamethe partner in charge of exits, and
so for most of my time there, I was helping firms get get ready
for the exit process, thinking abouthigh level strategy. How do you how
(03:58):
do you shape a company to bethe most attractive on exit, and how
do you get ready for that exit? And then I shepherd them through to
the to the sale. And youknow it's I would be like the cheerleader,
the advisor, literally cracking the wayup over CEO's head sometimes because it's
such your process. And Caroline,you're selling yourself short a little bit,
(04:20):
because for those members of our audiencewho are not aware in the world of
business private equity, you're you're therock stars of the business world. And
then within private equity, HW isvery well known and very well regarded.
To become an operating partner as abig deal, and you have to have
a lot of experience and know howand skills to bring to the table and
(04:41):
to last twenty years in the worldof private equity is a testament to your
capabilities and skills. So you knowthat that may have been missed by some
members of our audience. But Ijust wanted to point that out. That's
it's an impressive resume. Thank you, so continue. I appreciate that.
It's it's a there are so manysmart people. I got to work with
so many smart people both within myfirm, and I loved the management teams,
(05:05):
I mean great CEOs and teams thatwere passionate about their business. And
to me, that's what I wantedto see on that exit process is a
team that loved their business, lovedtheir future. I'm kind of all in
and that's what makes for a reallygreat sale process. But you know,
as I said, sometimes i'd haveto crack that whip. And one of
(05:27):
the CEOs and his wife actually gaveme a rhinestoon studded bull whip that I
have hanging in my office and thatwas my closing dinner gift. So sound
a little bit about the exit process. So I've loved it. I really
enjoyed it. But after twenty years, I decided I wanted another chapter.
So I'm really leveraging my experience andmy prior chapters to help people both through
(05:54):
as you say, kind of theexecutive coaching side, and mostly I'm working
with women. I spent twenty yearsreally being the only woman in the room,
and I know what that's like andhave some thoughts on how to leverage
that. So most of my workis with women, some men as well.
And then I'm also working with businessowners because again I spent twenty years
helping prepare companies for sale and thenshepherding them through that exit process. So
(06:18):
I know it so well. I'velived it and breathed it, and there's
a lot of things that you cando to make that a better process.
And I feel like there's kind ofa black box out there. People don't
really understand what that process is andhow to best prepare for it and really
understand what that future can look like. Because I think in life, if
(06:42):
you if you can't visualize where youwant to go, it's really hard to
get there. So I like tohelp people visualize where they can go so
they can get there. That's wonderful. So just to clarify two distinctly different
services, and that's a question coachingand then preparation for a potential ale of
a business. Is that right?It is as funny as like I was
(07:03):
working on my website, It's likethese are there's such different things. There's
a lot of commonality. As Isaid, it's about visualizing what you want
and leveraging both your personal strengths oryour company's strengths, and figuring out what's
getting in the way, both foryourself and your company. So there's a
lot of parallels with what I do, but they're pretty different. So probably
(07:25):
in the future I may split itinto two companies. But right now,
Craftsberry does both, and I loveboth of them. They feel pretty different,
but I mean, I worked withso many great women and some great
men, and I love helping thembe their most impactful selves. And then
the business side, it's just sointeresting and I love learning about new companies
(07:46):
and helping people, you know,find the strength of that company a way
that buyers are going to fall inlove with it. Yeah, and I
want to take them one at atime. But first, and this is
these are my words, and Ifeel free to dispute refute what I'm about
to say. Coaching is more aboutpersonal growth, and exit planning is more
(08:07):
about the growth and preparation for thecompany as a whole. Would you agree
with that? I would for themost part, I would say, um,
on the business side, there isa it's not really necessarily coaching,
it's sort of coaching, but itis um for the owners. This is
(08:28):
their baby and this is a bigpart of who they are in their life.
And helping owners understand what that salecan be to them is also really
important. You know. I talkedto some of the other day. They
were like, yeah, and thisis like a fifty percent owner that does
all the sales, and he waslike, yeah, I want to sell
like in about nine months and thendo something else. It's like he's the
(08:50):
head sales guy. You're not goingto have a very successful exit if you're
gone on clothes. So you haveto understand and that just selling your business
doesn't mean you walk away day one. So understanding what your options are.
You know, private equity has abad name out there, and it's to
me, it's very misunderstood in termsof what it can mean for that owner.
(09:15):
So it's helping them understand that too. Well. Before we dive into
your businesses or your two service areas, let's probe on that because that's a
topic we've covered in previous podcasts.You know, private equity is a dirty
name, and I think it startedwith leverage buyout organizations, and you know,
we've sort of as an industry justadopted private equity. But that's a
(09:37):
big, broad umbrella term that coversall investments of any company, venture stage,
growth, buy out, big companies, small companies. So it's a
kind of a big broad term.But why why is it that private equity
has this bad reputation or why isit that a business owner would would have
(10:00):
the perception that private equity is anegative? And why are they wrong?
I mean, who better to askthan somebody who's spent twenty years in private
equity. Yeah, well, Ithink the news likes to find negative versus
positive. That's how they make money. So that's what they focus on,
is some bad examples. And Iwill say, there's very different firms out
(10:22):
there. So if you're selling yourcompany and you've got private equity interested in
you, you got to do yourown diligence and figure out what kind of
firm is it. Some firms aremore hands on than others, some are
more operational, you know, butreally, at his heart, private equity
they buy a company to make itbetter, right, They don't buy it
(10:43):
to tear it apart. That's nothow they make money. You know,
they make money by growing it,by doing acquisitions, by helping build out
the team. So understanding you knowmore about the firm is really really important.
But in general, and most firmsare there to support teams, to
help them grow, to bring anoperational expertise that maybe wasn't there before,
(11:09):
and then to sell it for evenmore money. So you know, a
lot of owners. You know,for HKW, most all the founders would
reinvest. It's called a rollover investment, and most of them made more money
on the second sale than they didon the first, so it's called the
second bite of the apple. Andthat's a really important concept that you're not
(11:31):
just selling and walking away. Youcan sell, be a part of it,
stay on a CEO if you want, or maybe you want to sort
of pass on the baton during thatownership, or maybe you've set up a
new president that can then step intoyour role. There's a lot of ways
to do it. But you know, just thinking you're going to sell and
(11:52):
walk away is it's not a realisticthing, and there's so much great opportunity
out there. We had one dinnerand as the CEO she had she had
not been a prior owner so sheinvested a little bit of money, but
most of her shares came through options. And we were sitting around the table
(12:13):
and she gave a little toast andshe looked at us htw folks, and
she goes, you do realize thatyou change lives. And it was such
a beauty, you know, It'slike, that's what it was all about.
Like she was like, our kidsare going to college and maybe we
can buy a new house, orour retirement looks different. And that,
to me is the beauty of privateequity because you're spreading out that wealth to
(12:39):
a broader set of the management team. You're giving opportunities for teams to go
and learn. You didn't explicitly statethat, but it is common as well
for the first tier of management toshare in some form of equity, and
that's an important I don't want tosay trigger because that sounds negative, but
that's an important incentive component. That'san important opponent of what private equity is
(13:01):
all about, is to incentivize managementto be in lock step. In other
words, we all share in thegains of the company's growth and development and
maturation. So yeah, you wantthem in a seller mindset as well,
right, all right, so backto back to coaching. Let's start with
coaching. So I think I knowa lot about coaching. I have a
(13:22):
son and a daughter. I coachedboth of their teams to the basketball championship.
So now that's not the type ofcoaching that we're talking about here,
obviously, So what is executive coachingor business coaching? Yeah, and I
take a little bit different tact onit, probably than most. I'm not
a certified coach. I thought aboutit and then decided I wanted to just
really you know, we've had alot of books on it, but leverage
(13:46):
my experience to help people. Andit's been super effective. Really proud that
well over half the women I workedwith last year got promoted and that,
to me, I'm just so proudof them. And I'm proud of Craftsberry
too for what we've put together.But so how I think about coaching,
it is sort of a whole lifething. Like my first sending, you
(14:09):
know, are you eating right,are you getting exercise, or you're putting
your phone away? And then weget into you know what really matters to
you? You know, what feedsyour soul, what are your strengths,
what's getting in the way, andhow are we going to work past it?
And we set goals and set visionand a really important part of the
career development engagement that we do isa three sixty. So I'm talking to
(14:33):
usually four to six supervisors or coworks sometimes people that report up, and
people give me, especially given mybackground, they give me really unvarnished direct
feedback, and that is super important, like what are the strengths, what's
getting the way, what's that pathto promotion? What does he or she
need to do together? When you'resoliciting that three hundred and sixty degree feedback
(14:56):
from people who know this person indifferent capath a city's upper level, lower
level, left, right, whatis it that? Why is it that
they're as candid as I think you'veyou've shared a little bit of this with
me previously. Why are they ascandid as as they appeared apparently? Well,
for one, it's safe, it'ssafe to tell me something really direct.
(15:20):
I'm not gonna get mad, I'mnot gonna get defensive. I just
purely want to learn so I canhelp that advisy. That's my sole goal.
And so it's much easier, andI will say, especially when it's
a woman and it's a male supervisorwho pretty much has all men. It's
intimidating and they want to be carefuland that gets in the way of getting
(15:43):
the really clear feedback you need.And the beauty of the three sixty is
after they've given me that feedback,it becomes easier to give it directly that
person because they know the person's hurtit and I just feel like it opens
up that door to clearer feedback.And I've also I'm also working with people
on taking feedback. It's really importantnot to get defensive. It's so easy
(16:06):
to take things personally, but ifif you approach feedback is this is this
person is trying to help me,and there's colonels. You know, maybe
I don't agree with one hundred percent, but there's a lot. You know,
they're giving me this feedback to helpme. What can I take from
it and learn to improve? Soit just helps on both sides of the
feedback. And I'm also kind ofcoaching sometimes these managers. You know,
(16:30):
like I had some time and hewas a great guy. I had worked
with him a number of times andhe has an advisor and I did three
sixty and He's like, Oh,she's so smart, she's so organized,
she gets more out of our managementteams than anyone. She just needs to
be more assertive. And I waslike, you do understand, And he
had just talked about that are allwhite male fraternity guys in this firm,
(16:55):
And I was like, you doknow that success is going to look a
little different from her than all youwhite male fraternity guys. And he goes,
you know, I think I gotto learn more from this engagement than
she is. And it was justlike that al moment. But he was
also right, she needed to speakup more, she needed to assert herself.
So I was like, going atit from both directions made all the
(17:18):
difference. She got promoted to directorand she's she's cranking, she's doing great.
Well, what you just did wassomething that not I suspect very few
coaches would have done, would havetaken that risk or I don't know what
you call it, but that wasa very keen observation, and I'm poignant
one, and I'm sure I'm gladit. I'm glad he received it well,
because that's a good that's did pointand it was clear, you know,
(17:41):
I do a check in call.It was clear he heard it,
he got it, and he wasleveraging it in a way that helped his
team and helped her. So soI think that's I think that's a differentiator
in the way that I approach it. And I can also get back to
(18:02):
the yakay go ahead. Well,I can also really find out what is
needed to get to the next level, and then I can incorporate that in
my sessions, and I do oneon one sessions like ninety minute sessions,
and we deal with both what's goingon from a day to day basis.
You know, if it's an Mand a person, what are your deals?
(18:22):
We talk about pitching, but there'salso like confidence, leadership, business
development. I mean, there's keytopics. I have books that I have
them read. So it's really it'sso couple a couple of questions. So,
first of all, ninety minute sessionis that weekly or monthly, monthly,
and then I'm always available with somethingcall it, need something, They'll
(18:44):
call me and we'll check in.But we do it monthly. And most
you said most of your most ofyour mentees coaches are women, but not
necessarily you do have several men.And then most of your connections are in
the world of mergers and acquisitions.But I suspect, you know, if
if a woman or a man wantedto be Cody, it doesn't matter.
(19:07):
You don't have to be involved ininvestment. I've got a woman that's in
the insurance world. I've got awoman who's a CEO of a manufacturing UM
company. UM. So yeah,it really is there a duration? I
mean, do they sign on fora year or what's the outcome? How
do you know? Yeah? Itcomes often they want more. Now.
(19:33):
I started doing six monthly sessions andI increased it to nine because I felt
like six wasn't quite enough. UMand then sometimes I'll do an extension and
usually it's the firm hires me andthen UM assigns high performing women to me.
So, you know, Key Banksbeing a great supporter. And so
(19:56):
I've had five women last year andfive this year. And I'm working with
a lot of the big name banks. You know, Harris Williams has been
great, and Lincoln and Steve Falland they just started with William Blake.
I mean, there's just great companies. And so it's usually the firm.
And I must say for me tosell Craftsbury I gotta go pretty high and
(20:17):
then they say, oh, thisis great, and then they'll hire me
to work with the women. Andthen I've had a few people approach me,
and then I'll work with them withoutit going through the company. Excellent.
So how would you say you're differentas a coach than other coaches,
business coaches, executive coaches might be, Well, I do think I'm really
(20:37):
leveraging that prior experience. And thenfor the women, you know, it
can be hard to be the onlywoman in the room every day, So
I have that experience. I havetwo great grown kids, so I know
what it's like to try and balancethings. So I'm bringing that perspective kind
(21:00):
of been there and done that,and I while it can be exhausting to
be the only woman in the room, it can be a real advantage.
You stand out, you're different.People are going to remember you saw what
energy are you bringing in the room? What connectivity? And really putting forth
that kind of positive mindset and abilityto connect with people. To me,
(21:22):
I think is one of the mostimportant things you can do to help people
in a coaching way. So it'sreally that's kind of the way I go
at it is you know what isyour vision and how do we how do
you want to be as a persongetting there and really trying to help people
live in the present but figure outwhere they want to go at same time.
(21:45):
Good So, Caroline, last questionon the coaching side, and then
I want to move over to theexit planning side. I know from my
business peer advisory round tables there arepeople that are probably not a good fit
for that environment, and I'm wonderingit's the same true for coaching. Are
there people who are to use anegative term, uncoachable or are there people
(22:07):
who are better suited. Maybe that'sa better way to look at the glass
half full. Yeah, there's there'ssome people it's just you just you click
and it's just like it's they getit and it's like, oh, this
is awesome and you just go.And then there are other ones where I
have to figure out how to besthelp them and they may be a little
bit less open to start, butI just try and figure out what's the
(22:30):
different angle. Like I had oneI was I was kind of nervous because
she was really tough on her juniorpeople. She was like, it's just
a little intimidating and I'm like,man, usually it's helping people put themselves
out there versus being nice. Andyou know what, by the end of
the first session, it was likewe were we had totally clicked. She
(22:52):
was like, she was like,I don't even know what's behind my own
barriers. She's sort of She's totallyopened up, and we had the greatest
working relationship. So there's definitely somewhere. I gotta go at it from a
different angle than I usually do.I haven't, and I know some get
more out of it than others.So far, I haven't had anyone that's
been just like, oh, thisis just not a click, But I
(23:15):
know there will be, and I'lltry not to take it first. You
know. It's like it's like anythingelse, and you click better with some
people than others. But so far, I've really loved them all. They've
been great, good, good,good good. Okay, So switching gears
to exit preparation consulting work. Sowhat I mean I ask a couple of
(23:37):
questions. You know, what isinvolved in preparing a business for sale and
what related to that? Are therecommon shortcomings that you consistently see that businesses
just overlook or they're not prepared,or they haven't they're not as sophisticated as
they are in other areas, ordoes it vary dramatically. I think it
varies. But you know, oneof the most important things I think for
(24:03):
a business owner is to step backand think about value in a different way.
Like their value proposition to a customeris one thing, and that's super
important in the sale process, butyou also have to think about your value
proposition to the buyer, which isdifferent. You know, not all,
(24:25):
not all revenue is created equal.If your big projects, you your one
hundred thousand dollars of revenue is verydifferent than a recurring revenue just comes in
every month. So stepping back andthinking about your business from the buyer's perspective,
and you have to understand that thebuyer is not buying your company for
(24:48):
what it is today under your ownership. They're buying it for what it's going
to be under their ownership. Sothe more you can be sort of ranular
and thoughtful about what that future isand show traction towards that future and you
make it tangible, the more valueit's gonna create. So it's really a
(25:11):
mind shift into thinking like a buyeris super important. The other thing I
would say and is making sure youhave your financials just really clean and you
know, detail walking. The lastthing you want to do is go out
to market saying here are numbers,and they're not really your numbers because you
(25:36):
haven't scrub them with a fine toothcomb, you know. Having a buyer
come back and say, well,it's actually a million dollars less hurts and
either they're gonna walk away or they'regonna ding you big time. So make
sure you got your financials in orderand make sure you really understand what that
growth path is. Make it tangible. You know, those are the things
(25:57):
that are really important. I mean, there's a lot of important things.
There's so much that comes with anexit that I work with owners on,
but those are just important ones.I heard you used the word traction a
minute ago, and I'm not sureif that was intentionally. I don't think
we've talked about this before, Butare you familiar with entrepreneur operating system eos?
(26:17):
Do you do you use eos atall in either coaching or some of
the people I've worked with have.I have, and so I've sat through
some of the meetings. I thinkit can be a great tool, especially
if you have not kind of formalizeda lot of things within your business.
(26:37):
It can be very helpful. There'sthere's quite a lot that comes with it,
and I think as you grow,maybe you take the best parts of
it, and you know, Ithink after a year or two you can
figure out how to best do it. But I know a lot of people
have really found that very helpful.Yeah. I mean for those people who
might be listening or watching and arenot familiar with it, you can look
(27:00):
up EOS Entrepreneur Operating System. It'sa I'll be careful, it's a tool
that would be probably probably more appropriatefor businesses that are in the lower end
of the middle market than in theupper end of the middle market. But
it's very it's very nice because itis so neat and simple and straightforward and
(27:22):
achievable, and so it's a goodI find it a good tool. Um
any good case study examples of businessesthat you've helped prepare for a sale,
situations maybe that have gone nicely well, Um well, there's a lot of
them, kit a lot of them. And of course I can't resist asking
about situations where boy, there wasa skeleton in the closet or you know,
(27:45):
snake under the woodpile or whatever theexample. There was a couple of
those two. But fortunately I've beenI've been. I've had a lot of
great companies and a lot of greatsale processes. But I will say what
comes with that was starting to thinkabout the exit the day we bought the
company. And you know, there'sreally never too early to start thinking about
(28:08):
the exit. So what is thatgrowth strategy that's from that buyer mindset's gonna
create the most interests? So wehad one company is a great company.
The owner had hired a small brokeron only went out to four or five
people. Unfortunately HKW was one ofthem, and we acquired it. And
(28:30):
then we pretty quickly brought in agreat investment bank and we sat down and
we said, you know, whatare buyers going to want to see here?
And we talked about our strategy andit was we put in geographic growth.
We didn't add on to show thatthat was a way that a logical
good way to grow. Put ina much broader sales team with broad geographies.
(28:52):
I grew into a couple of differentend markets. It's probably three four
years we used that firm. Theydid a great job broad process and it
was a very nice return. Sobeing thoughtful about what are those growth avenues
are, what are the things thatwe want to achieve? That founder did
not want to be the CEO inthe next turn, so we brought in
(29:15):
a great president because team is superimportant. So that that was a great
example of a start to finish,being thoughtful on the exit, that's great,
and so thinking about it, youknow, just in my own words,
when you buy a company or whenwhen you're beginning a period of ownership,
you're thinking about who the likely acquirerwould be and what it would be
(29:38):
that would attract that buyer to thiscompany, What might make your business more
attractive therefore more valuable, what mayhold you back in terms of making it
less sellable or sellable at a lowerprice. And so you sort of plot
out a path to get to thedesired point. And it's usually not one
(30:00):
potential acquirer no, okay, right, you never know, but you're you're
developing a strategy based on, Okay, how can we make this business as
attractive as we can to the nextacquirer. Yeah, And so it's an
interesting mindset because not many entrepreneurs orbusiness owners think about it that way.
(30:21):
You know, it's it's it's acommon expressions. Okay, we're at point
A, and how do we getfrom point A to point C? And
it's not always a straight line,and we know that there's some hurdles and
things that come up and um,you know, you get to a certain
point and they're stair steps and butso like I did a retreat, um,
and I'm going to do another one. It's going to be great.
And it's all about educating on thesale process. And we talk about that.
(30:45):
We talk what are value drivers?You know, growth team, um,
you know, visibility, there's youknow, there's all these different value
drivers in a business. So understandingwhat are the key value drivers in a
business, and then what are thedetractors? Customer concentration, it's applier concentration.
(31:07):
That's risk, it's big risk.So understanding you know that buyers kind
of call your top three five.However many customers, what's your relationship with
them, making sure they're going tosay the right things, making sure you
know, you understand what that processis going to entail. So you know,
(31:27):
in the retreat, it's what arethe value drivers, what are the
detractors? How do you think abouttiming? How are companies going to value
you? What are the different what'sthe buyer universe? You know, what
does it mean to get brought byPE and what does it mean to be
bought by a strategic where you mayget folded into a bigger organization. You
(31:48):
know, there's there can be hugebenefits both for your team, your company,
your customers, but it's it's adifferent outcome then if you are just
you know, a platform company forprivate equity. So I try and help
owners understand what those different paths mightlook like and mean to them, their
team, their customers, their community, because all those things are really important
(32:13):
in a sale process. Well,I want to come back to the retreat
and I want to learn more abouthow our audience might be able to reach
out to you and learn more.So we'll get the web address up on
the screen. But before I dothat, you mentioned that a couple of
detractors that you just happen to tossout customer concentration risk, supplier risk,
(32:34):
just as a couple of examples.But I think it's important to acknowledge that
in some industries you're stuck. Youknow, you have a limited number of
suppliers. Okay, that's the givenin your industry. Now what are we
going to do? Now? Whatcan we work on? Or you know,
you have three customers that represent seventyfive percent of your revenue, it
is what it is. Or you'renot going to get rid of those customers.
(32:55):
But what else can we do tomitigate that? Yeah, I think
it's a lot of it in thatkind of situation, and that's very true.
I mean some say, you're inthe aerospace, we had several aerospace
there's not very many buyers, andyou are going to have customer concentration.
But maybe you can build out yourdata to show, okay, we're on
(33:17):
this many platform airline platforms, orwe sell to different divisions within that same
company so it's different buyer universes.Or here's how sticky it's been. You
know we land, we expand withinthat customer. So there's ways to get
(33:38):
buyers comfortable with those detractors. Butif you just walk into your sale process
without thinking that through and building outthat story, then they're gonna be like,
whoa you know that one customer lease, what am I bought? I
bought half the revenue that I thoughtI was buying. So how do you
(33:59):
get them comfortable with what may bejust a key part of the business.
And I think being thoughtful in advanceis really really important. And to that
point, you know, really understandingwhat are the key performance indicators of your
business and a lot of people justaren't tracking that. And I tell you
what, when you go to market, you got to go fast. I
(34:22):
mean, I have a number ofstories on the less positive side of what
can happen in a sale product youjust time is a risk. I had
one where the two largest companies customerscombined, they were maybe twenty percent and
eighteen percent, and all of asudden, we're right at the li stage
(34:44):
and we don't have the largest customerthat's twenty percent. We have the largest
customer that's almost forty percent. That'sa big difference, and you just don't
know, you don't know what's goingto happen. Or another case where one
of the largest projects, it wasa damn project up in Canada and the
government, Canadian government said, man, we might put this on hold,
and it's like, so we're justjumpers down a memo. Projects that's tough,
(35:07):
so you know you you want tobe ready to go and go fast.
So what's the information buyers are gonnawant? And you're not going to
have it at all because they're gonnamake you you you're just not going to
believe how much information they want andhow they want to slice and dice.
But make sure you're slicing and dicingit in the most important ways that they
(35:27):
can get comfortable with your business.Very interesting, very interesting, and that
I've never really understood to that degreethe reason why it is so important to
move quickly. It's because things changeand things change that you know, your
example of that customer that was twentypercent, they're now forty percent. That
seems like a really good thing formanagement. They did something great. They
(35:50):
just their best customer likes them thatmuch. But it's actually more risk for
the buyers, so it's a negative. So you can't control that. So
I get it a quick plug fora chloropartners because some of what you were
describing, I know they're really engagedin and do a great job with on
the cell side market study. Soif you're painting a picture of a story
and you're stuck with a situation whereyou have some supplier concentration and you're able
(36:15):
to explain, well, here's thereason why this is not as big a
concern as you might otherwise assume.When you're able to tell that story and
lay it out very clearly for abuyer, you're reducing risks. So those
cell side market studies can be veryhelpful in that regard as well. So
back to the retreat, I'm notsure I was aware of that, So
let's let's hear a little bit aboutthat and then and how our audience can
(36:38):
contact you, and then certainly ifthere's anything else that you wanted to share.
Sure, So before I forget you, if you go on our website
Craftsberry Consulting dot com, there's alink in info at Craftsberry Consulting dot com.
Email and love to hear from you. Love to have folks at the
retreat. We last one we didat a dude ranch. Probably do the
(37:00):
same so you can kind of getaway. I happen to love horses,
so but there's also a shooting rangeand ebikes and all those things. But
you know, so it's about gettingout of your setting and stepping back and
thinking about your business in a differentway, and I have a ton of
great content. I'm working on acase study from start to finish, so
you can really understand what someone talksabout a teaser what does that mean?
(37:22):
Or a confidential information memorandum? Whatis that? So we'll help you walk
through what is a process so youcan get ready. We'll help you understand
what the buyers are. We'll helpyou know what are the advisors you need
and how do you pick them?You know, there's a lot of great
investment bankers out there. How doyou find the right one for you?
(37:43):
And I'll tell you if fit isincredibly important, as is the ability to
run a really competitive process, andsome bankers are way better than that than
others. So how do you sussout well which one is the right one
for me? So we'll talk aboutthat. We'll talk about you know,
do you need a mark it stay? You know those you know what are
the different options of things? Andyou know Claris someone I've worked within the
(38:05):
past and they do a great job. So um as well as being you
know what you do as you providea support system for CEOs and that's also
part of the retreat. It's havingother ceo so you can sort of talk
through, you know, what areour strengths, how do I think about
growth, how do I make thismore tangible for buyers. So it's a
(38:25):
it's a three day event and wedo some fun activities, but we also,
you know, really help you understandwhat the exit process is in how
to get ready for it and itdoesn't you know. And the last one
we had, we had a womanshe had just started her business maybe a
year earlier. It was on areally nice trajectory and she just wanted to
(38:45):
know how to think about exits downthe road. And another, you know,
another one was seventy five years oldand she was their generation. And
it's and it's men and women.But so it's a great experience. It's
a lot of fun. I love. I love helping owners think about this
because it's it's a really important milestonein your life and then being ready for
(39:10):
it and being thoughtful about it canmake all the difference in the outcome.
That's great, all right, Well, thank you Caroline Young Craftsberry Consulting.
Check them out online. And youknow, I'm a I'm a big fan
not only of Caroline but also thework that she has done and does,
and it's it's similar. Particularly theconcept of the retreat bringing people together in
(39:34):
person to collaborate and mutually support oneanother as well as to learn, is
very similar to the work that wedo at Strategic Growth Council dot com.
So take a look. We're apeer advisory counsel. We meet in person,
but we also mainly meet virtually ona monthly basis for several hours and
we help solve cases. So ifyou're interested in learning more, go to
(39:57):
Strategic Growth Council dot com. Butalso so it's a good place to check
out not only this episode, butall of our episodes. You can follow
us on YouTube or wherever you listento podcasts. Put us in your listening
que, review the show, giveus a rating, and thanks for listening.
(40:22):
Produced by Heartcast Media
Welcome to Strategic Growth Counsel, apodcast about strategic growth and mergers and acquisitions
for the middle market. Now.Strategic Growth Council also provides growth strategy planning,
work and peer advisory roundtables that meetvirtually every month. We focus on
solving members cases or business dilemmas asa group, intentionally, consistently and as
(00:36):
a dedicated support team for one another. I serve as the moderator. Just
contact me to learn more at StrategicGrowth Council dot com. But this this
is our podcast. Then if you'reinterested in learning more about organic growth,
growth by acquisition or the sale ofyour company, this show will be interesting
and useful for you. Thank youto our sponsor, a Claro Growth Partners,
(01:00):
a strategy consulting firms serving middle marketM and A. Visit a claropartners
dot com. Every episode I interviewan expert or participant in the world of
strategy growth in M and A,and today I'm pleased that I'm joined by
Caroline Young of Craftsbury Consulting, whichofficer offers exit planning, preparation and executive
(01:22):
coaching. Caroline, Welcome, thankyou, happy to be here. Awesome,
well I'd love to hear you know, I typically say thirty to sixty
seconds worth of background on your experience, what brought you to this point in
your career. So love to hearmore about your your experiences historically and then
where we are today. Absolutely,and I have to tell you it's probably
(01:46):
gonna take more than sixty seconds becausewhere I am today was so shaped and
influenced by where I came from,so grep and Vermont. I went to
UVA for law school, and lawschool, I didn't really know what I
was going to do, but Iwas dang sure I wasn't going to be
a litigator because it scared the crapout of me. So ended up coming
(02:08):
to Indianapolis joining the law firm,and they instantly put me in the litigation
group, which was just as scaryas I thought. But it was great
at getting me out of my comfortune, figuring out how to present to
an audience so that they would connectto it. You figure out negotiation skills,
all those things, and it wasgreat, but it I never loved
(02:29):
it. You're always bunking head.So two, I'm going to interrupt.
I told I warned you I probablywould, So I went to UVA as
well, and I would go overto the UVA Law School and get some
books or do do some studying.And there were a couple of things that
I noticed when I went to theDarden Business School. You know, people
(02:50):
were socializing, hanging out, youknow, just sort of like a fun
atmosphere. And then in the lawschool library, Oh my goodness, you
guys were so serious. You know, that's so funny. You say that,
because I would say the Opposite's probablybecause all the law students were over
there at the Darden library, becauseI felt like we had way more fun
than they did. And it wasjust it was a great school. Depends
(03:12):
on what year. I guess myyear was the first years. Well that's
true. First years is a littlescarier. But it was a great school,
and so glad I went there,and so glad I did the litigation
piece because I learned so much fromit, but happily moved on to private
equity and I remained in private equityfor twenty years. Great firm called HKW
(03:36):
started out doing some legal work thereand quickly realized that wasn't the value proposition
I wanted for myself for the firm, so I maneuvered my way onto more
of an OPS role and I becamethe partner in charge of exits, and
so for most of my time there, I was helping firms get get ready
for the exit process, thinking abouthigh level strategy. How do you how
(03:58):
do you shape a company to bethe most attractive on exit, and how
do you get ready for that exit? And then I shepherd them through to
the to the sale. And youknow it's I would be like the cheerleader,
the advisor, literally cracking the wayup over CEO's head sometimes because it's
such your process. And Caroline,you're selling yourself short a little bit,
(04:20):
because for those members of our audiencewho are not aware in the world of
business private equity, you're you're therock stars of the business world. And
then within private equity, HW isvery well known and very well regarded.
To become an operating partner as abig deal, and you have to have
a lot of experience and know howand skills to bring to the table and
(04:41):
to last twenty years in the worldof private equity is a testament to your
capabilities and skills. So you knowthat that may have been missed by some
members of our audience. But Ijust wanted to point that out. That's
it's an impressive resume. Thank you, so continue. I appreciate that.
It's it's a there are so manysmart people. I got to work with
so many smart people both within myfirm, and I loved the management teams,
(05:05):
I mean great CEOs and teams thatwere passionate about their business. And
to me, that's what I wantedto see on that exit process is a
team that loved their business, lovedtheir future. I'm kind of all in
and that's what makes for a reallygreat sale process. But you know,
as I said, sometimes i'd haveto crack that whip. And one of
(05:27):
the CEOs and his wife actually gaveme a rhinestoon studded bull whip that I
have hanging in my office and thatwas my closing dinner gift. So sound
a little bit about the exit process. So I've loved it. I really
enjoyed it. But after twenty years, I decided I wanted another chapter.
So I'm really leveraging my experience andmy prior chapters to help people both through
(05:54):
as you say, kind of theexecutive coaching side, and mostly I'm working
with women. I spent twenty yearsreally being the only woman in the room,
and I know what that's like andhave some thoughts on how to leverage
that. So most of my workis with women, some men as well.
And then I'm also working with businessowners because again I spent twenty years
helping prepare companies for sale and thenshepherding them through that exit process. So
(06:18):
I know it so well. I'velived it and breathed it, and there's
a lot of things that you cando to make that a better process.
And I feel like there's kind ofa black box out there. People don't
really understand what that process is andhow to best prepare for it and really
understand what that future can look like. Because I think in life, if
(06:42):
you if you can't visualize where youwant to go, it's really hard to
get there. So I like tohelp people visualize where they can go so
they can get there. That's wonderful. So just to clarify two distinctly different
services, and that's a question coachingand then preparation for a potential ale of
a business. Is that right?It is as funny as like I was
(07:03):
working on my website, It's likethese are there's such different things. There's
a lot of commonality. As Isaid, it's about visualizing what you want
and leveraging both your personal strengths oryour company's strengths, and figuring out what's
getting in the way, both foryourself and your company. So there's a
lot of parallels with what I do, but they're pretty different. So probably
(07:25):
in the future I may split itinto two companies. But right now,
Craftsberry does both, and I loveboth of them. They feel pretty different,
but I mean, I worked withso many great women and some great
men, and I love helping thembe their most impactful selves. And then
the business side, it's just sointeresting and I love learning about new companies
(07:46):
and helping people, you know,find the strength of that company a way
that buyers are going to fall inlove with it. Yeah, and I
want to take them one at atime. But first, and this is
these are my words, and Ifeel free to dispute refute what I'm about
to say. Coaching is more aboutpersonal growth, and exit planning is more
(08:07):
about the growth and preparation for thecompany as a whole. Would you agree
with that? I would for themost part, I would say, um,
on the business side, there isa it's not really necessarily coaching,
it's sort of coaching, but itis um for the owners. This is
(08:28):
their baby and this is a bigpart of who they are in their life.
And helping owners understand what that salecan be to them is also really
important. You know. I talkedto some of the other day. They
were like, yeah, and thisis like a fifty percent owner that does
all the sales, and he waslike, yeah, I want to sell
like in about nine months and thendo something else. It's like he's the
(08:50):
head sales guy. You're not goingto have a very successful exit if you're
gone on clothes. So you haveto understand and that just selling your business
doesn't mean you walk away day one. So understanding what your options are.
You know, private equity has abad name out there, and it's to
me, it's very misunderstood in termsof what it can mean for that owner.
(09:15):
So it's helping them understand that too. Well. Before we dive into
your businesses or your two service areas, let's probe on that because that's a
topic we've covered in previous podcasts.You know, private equity is a dirty
name, and I think it startedwith leverage buyout organizations, and you know,
we've sort of as an industry justadopted private equity. But that's a
(09:37):
big, broad umbrella term that coversall investments of any company, venture stage,
growth, buy out, big companies, small companies. So it's a
kind of a big broad term.But why why is it that private equity
has this bad reputation or why isit that a business owner would would have
(10:00):
the perception that private equity is anegative? And why are they wrong?
I mean, who better to askthan somebody who's spent twenty years in private
equity. Yeah, well, Ithink the news likes to find negative versus
positive. That's how they make money. So that's what they focus on,
is some bad examples. And Iwill say, there's very different firms out
(10:22):
there. So if you're selling yourcompany and you've got private equity interested in
you, you got to do yourown diligence and figure out what kind of
firm is it. Some firms aremore hands on than others, some are
more operational, you know, butreally, at his heart, private equity
they buy a company to make itbetter, right, They don't buy it
(10:43):
to tear it apart. That's nothow they make money. You know,
they make money by growing it,by doing acquisitions, by helping build out
the team. So understanding you knowmore about the firm is really really important.
But in general, and most firmsare there to support teams, to
help them grow, to bring anoperational expertise that maybe wasn't there before,
(11:09):
and then to sell it for evenmore money. So you know, a
lot of owners. You know,for HKW, most all the founders would
reinvest. It's called a rollover investment, and most of them made more money
on the second sale than they didon the first, so it's called the
second bite of the apple. Andthat's a really important concept that you're not
(11:31):
just selling and walking away. Youcan sell, be a part of it,
stay on a CEO if you want, or maybe you want to sort
of pass on the baton during thatownership, or maybe you've set up a
new president that can then step intoyour role. There's a lot of ways
to do it. But you know, just thinking you're going to sell and
(11:52):
walk away is it's not a realisticthing, and there's so much great opportunity
out there. We had one dinnerand as the CEO she had she had
not been a prior owner so sheinvested a little bit of money, but
most of her shares came through options. And we were sitting around the table
(12:13):
and she gave a little toast andshe looked at us htw folks, and
she goes, you do realize thatyou change lives. And it was such
a beauty, you know, It'slike, that's what it was all about.
Like she was like, our kidsare going to college and maybe we
can buy a new house, orour retirement looks different. And that,
to me is the beauty of privateequity because you're spreading out that wealth to
(12:39):
a broader set of the management team. You're giving opportunities for teams to go
and learn. You didn't explicitly statethat, but it is common as well
for the first tier of management toshare in some form of equity, and
that's an important I don't want tosay trigger because that sounds negative, but
that's an important incentive component. That'san important opponent of what private equity is
(13:01):
all about, is to incentivize managementto be in lock step. In other
words, we all share in thegains of the company's growth and development and
maturation. So yeah, you wantthem in a seller mindset as well,
right, all right, so backto back to coaching. Let's start with
coaching. So I think I knowa lot about coaching. I have a
(13:22):
son and a daughter. I coachedboth of their teams to the basketball championship.
So now that's not the type ofcoaching that we're talking about here,
obviously, So what is executive coachingor business coaching? Yeah, and I
take a little bit different tact onit, probably than most. I'm not
a certified coach. I thought aboutit and then decided I wanted to just
really you know, we've had alot of books on it, but leverage
(13:46):
my experience to help people. Andit's been super effective. Really proud that
well over half the women I workedwith last year got promoted and that,
to me, I'm just so proudof them. And I'm proud of Craftsberry
too for what we've put together.But so how I think about coaching,
it is sort of a whole lifething. Like my first sending, you
(14:09):
know, are you eating right,are you getting exercise, or you're putting
your phone away? And then weget into you know what really matters to
you? You know, what feedsyour soul, what are your strengths,
what's getting in the way, andhow are we going to work past it?
And we set goals and set visionand a really important part of the
career development engagement that we do isa three sixty. So I'm talking to
(14:33):
usually four to six supervisors or coworks sometimes people that report up, and
people give me, especially given mybackground, they give me really unvarnished direct
feedback, and that is super important, like what are the strengths, what's
getting the way, what's that pathto promotion? What does he or she
need to do together? When you'resoliciting that three hundred and sixty degree feedback
(14:56):
from people who know this person indifferent capath a city's upper level, lower
level, left, right, whatis it that? Why is it that
they're as candid as I think you'veyou've shared a little bit of this with
me previously. Why are they ascandid as as they appeared apparently? Well,
for one, it's safe, it'ssafe to tell me something really direct.
(15:20):
I'm not gonna get mad, I'mnot gonna get defensive. I just
purely want to learn so I canhelp that advisy. That's my sole goal.
And so it's much easier, andI will say, especially when it's
a woman and it's a male supervisorwho pretty much has all men. It's
intimidating and they want to be carefuland that gets in the way of getting
(15:43):
the really clear feedback you need.And the beauty of the three sixty is
after they've given me that feedback,it becomes easier to give it directly that
person because they know the person's hurtit and I just feel like it opens
up that door to clearer feedback.And I've also I'm also working with people
on taking feedback. It's really importantnot to get defensive. It's so easy
(16:06):
to take things personally, but ifif you approach feedback is this is this
person is trying to help me,and there's colonels. You know, maybe
I don't agree with one hundred percent, but there's a lot. You know,
they're giving me this feedback to helpme. What can I take from
it and learn to improve? Soit just helps on both sides of the
feedback. And I'm also kind ofcoaching sometimes these managers. You know,
(16:30):
like I had some time and hewas a great guy. I had worked
with him a number of times andhe has an advisor and I did three
sixty and He's like, Oh,she's so smart, she's so organized,
she gets more out of our managementteams than anyone. She just needs to
be more assertive. And I waslike, you do understand, And he
had just talked about that are allwhite male fraternity guys in this firm,
(16:55):
And I was like, you doknow that success is going to look a
little different from her than all youwhite male fraternity guys. And he goes,
you know, I think I gotto learn more from this engagement than
she is. And it was justlike that al moment. But he was
also right, she needed to speakup more, she needed to assert herself.
So I was like, going atit from both directions made all the
(17:18):
difference. She got promoted to directorand she's she's cranking, she's doing great.
Well, what you just did wassomething that not I suspect very few
coaches would have done, would havetaken that risk or I don't know what
you call it, but that wasa very keen observation, and I'm poignant
one, and I'm sure I'm gladit. I'm glad he received it well,
because that's a good that's did pointand it was clear, you know,
(17:41):
I do a check in call.It was clear he heard it,
he got it, and he wasleveraging it in a way that helped his
team and helped her. So soI think that's I think that's a differentiator
in the way that I approach it. And I can also get back to
(18:02):
the yakay go ahead. Well,I can also really find out what is
needed to get to the next level, and then I can incorporate that in
my sessions, and I do oneon one sessions like ninety minute sessions,
and we deal with both what's goingon from a day to day basis.
You know, if it's an Mand a person, what are your deals?
(18:22):
We talk about pitching, but there'salso like confidence, leadership, business
development. I mean, there's keytopics. I have books that I have
them read. So it's really it'sso couple a couple of questions. So,
first of all, ninety minute sessionis that weekly or monthly, monthly,
and then I'm always available with somethingcall it, need something, They'll
(18:44):
call me and we'll check in.But we do it monthly. And most
you said most of your most ofyour mentees coaches are women, but not
necessarily you do have several men.And then most of your connections are in
the world of mergers and acquisitions.But I suspect, you know, if
if a woman or a man wantedto be Cody, it doesn't matter.
(19:07):
You don't have to be involved ininvestment. I've got a woman that's in
the insurance world. I've got awoman who's a CEO of a manufacturing UM
company. UM. So yeah,it really is there a duration? I
mean, do they sign on fora year or what's the outcome? How
do you know? Yeah? Itcomes often they want more. Now.
(19:33):
I started doing six monthly sessions andI increased it to nine because I felt
like six wasn't quite enough. UMand then sometimes I'll do an extension and
usually it's the firm hires me andthen UM assigns high performing women to me.
So, you know, Key Banksbeing a great supporter. And so
(19:56):
I've had five women last year andfive this year. And I'm working with
a lot of the big name banks. You know, Harris Williams has been
great, and Lincoln and Steve Falland they just started with William Blake.
I mean, there's just great companies. And so it's usually the firm.
And I must say for me tosell Craftsbury I gotta go pretty high and
(20:17):
then they say, oh, thisis great, and then they'll hire me
to work with the women. Andthen I've had a few people approach me,
and then I'll work with them withoutit going through the company. Excellent.
So how would you say you're differentas a coach than other coaches,
business coaches, executive coaches might be, Well, I do think I'm really
(20:37):
leveraging that prior experience. And thenfor the women, you know, it
can be hard to be the onlywoman in the room every day, So
I have that experience. I havetwo great grown kids, so I know
what it's like to try and balancethings. So I'm bringing that perspective kind
(21:00):
of been there and done that,and I while it can be exhausting to
be the only woman in the room, it can be a real advantage.
You stand out, you're different.People are going to remember you saw what
energy are you bringing in the room? What connectivity? And really putting forth
that kind of positive mindset and abilityto connect with people. To me,
(21:22):
I think is one of the mostimportant things you can do to help people
in a coaching way. So it'sreally that's kind of the way I go
at it is you know what isyour vision and how do we how do
you want to be as a persongetting there and really trying to help people
live in the present but figure outwhere they want to go at same time.
(21:45):
Good So, Caroline, last questionon the coaching side, and then
I want to move over to theexit planning side. I know from my
business peer advisory round tables there arepeople that are probably not a good fit
for that environment, and I'm wonderingit's the same true for coaching. Are
there people who are to use anegative term, uncoachable or are there people
(22:07):
who are better suited. Maybe that'sa better way to look at the glass
half full. Yeah, there's there'ssome people it's just you just you click
and it's just like it's they getit and it's like, oh, this
is awesome and you just go.And then there are other ones where I
have to figure out how to besthelp them and they may be a little
bit less open to start, butI just try and figure out what's the
(22:30):
different angle. Like I had oneI was I was kind of nervous because
she was really tough on her juniorpeople. She was like, it's just
a little intimidating and I'm like,man, usually it's helping people put themselves
out there versus being nice. Andyou know what, by the end of
the first session, it was likewe were we had totally clicked. She
(22:52):
was like, she was like,I don't even know what's behind my own
barriers. She's sort of She's totallyopened up, and we had the greatest
working relationship. So there's definitely somewhere. I gotta go at it from a
different angle than I usually do.I haven't, and I know some get
more out of it than others.So far, I haven't had anyone that's
been just like, oh, thisis just not a click, But I
(23:15):
know there will be, and I'lltry not to take it first. You
know. It's like it's like anythingelse, and you click better with some
people than others. But so far, I've really loved them all. They've
been great, good, good,good good. Okay, So switching gears
to exit preparation consulting work. Sowhat I mean I ask a couple of
(23:37):
questions. You know, what isinvolved in preparing a business for sale and
what related to that? Are therecommon shortcomings that you consistently see that businesses
just overlook or they're not prepared,or they haven't they're not as sophisticated as
they are in other areas, ordoes it vary dramatically. I think it
varies. But you know, oneof the most important things I think for
(24:03):
a business owner is to step backand think about value in a different way.
Like their value proposition to a customeris one thing, and that's super
important in the sale process, butyou also have to think about your value
proposition to the buyer, which isdifferent. You know, not all,
(24:25):
not all revenue is created equal.If your big projects, you your one
hundred thousand dollars of revenue is verydifferent than a recurring revenue just comes in
every month. So stepping back andthinking about your business from the buyer's perspective,
and you have to understand that thebuyer is not buying your company for
(24:48):
what it is today under your ownership. They're buying it for what it's going
to be under their ownership. Sothe more you can be sort of ranular
and thoughtful about what that future isand show traction towards that future and you
make it tangible, the more valueit's gonna create. So it's really a
(25:11):
mind shift into thinking like a buyeris super important. The other thing I
would say and is making sure youhave your financials just really clean and you
know, detail walking. The lastthing you want to do is go out
to market saying here are numbers,and they're not really your numbers because you
(25:36):
haven't scrub them with a fine toothcomb, you know. Having a buyer
come back and say, well,it's actually a million dollars less hurts and
either they're gonna walk away or they'regonna ding you big time. So make
sure you got your financials in orderand make sure you really understand what that
growth path is. Make it tangible. You know, those are the things
(25:57):
that are really important. I mean, there's a lot of important things.
There's so much that comes with anexit that I work with owners on,
but those are just important ones.I heard you used the word traction a
minute ago, and I'm not sureif that was intentionally. I don't think
we've talked about this before, Butare you familiar with entrepreneur operating system eos?
(26:17):
Do you do you use eos atall in either coaching or some of
the people I've worked with have.I have, and so I've sat through
some of the meetings. I thinkit can be a great tool, especially
if you have not kind of formalizeda lot of things within your business.
(26:37):
It can be very helpful. There'sthere's quite a lot that comes with it,
and I think as you grow,maybe you take the best parts of
it, and you know, Ithink after a year or two you can
figure out how to best do it. But I know a lot of people
have really found that very helpful.Yeah. I mean for those people who
might be listening or watching and arenot familiar with it, you can look
(27:00):
up EOS Entrepreneur Operating System. It'sa I'll be careful, it's a tool
that would be probably probably more appropriatefor businesses that are in the lower end
of the middle market than in theupper end of the middle market. But
it's very it's very nice because itis so neat and simple and straightforward and
(27:22):
achievable, and so it's a goodI find it a good tool. Um
any good case study examples of businessesthat you've helped prepare for a sale,
situations maybe that have gone nicely well, Um well, there's a lot of
them, kit a lot of them. And of course I can't resist asking
about situations where boy, there wasa skeleton in the closet or you know,
(27:45):
snake under the woodpile or whatever theexample. There was a couple of
those two. But fortunately I've beenI've been. I've had a lot of
great companies and a lot of greatsale processes. But I will say what
comes with that was starting to thinkabout the exit the day we bought the
company. And you know, there'sreally never too early to start thinking about
(28:08):
the exit. So what is thatgrowth strategy that's from that buyer mindset's gonna
create the most interests? So wehad one company is a great company.
The owner had hired a small brokeron only went out to four or five
people. Unfortunately HKW was one ofthem, and we acquired it. And
(28:30):
then we pretty quickly brought in agreat investment bank and we sat down and
we said, you know, whatare buyers going to want to see here?
And we talked about our strategy andit was we put in geographic growth.
We didn't add on to show thatthat was a way that a logical
good way to grow. Put ina much broader sales team with broad geographies.
(28:52):
I grew into a couple of differentend markets. It's probably three four
years we used that firm. Theydid a great job broad process and it
was a very nice return. Sobeing thoughtful about what are those growth avenues
are, what are the things thatwe want to achieve? That founder did
not want to be the CEO inthe next turn, so we brought in
(29:15):
a great president because team is superimportant. So that that was a great
example of a start to finish,being thoughtful on the exit, that's great,
and so thinking about it, youknow, just in my own words,
when you buy a company or whenwhen you're beginning a period of ownership,
you're thinking about who the likely acquirerwould be and what it would be
(29:38):
that would attract that buyer to thiscompany, What might make your business more
attractive therefore more valuable, what mayhold you back in terms of making it
less sellable or sellable at a lowerprice. And so you sort of plot
out a path to get to thedesired point. And it's usually not one
(30:00):
potential acquirer no, okay, right, you never know, but you're you're
developing a strategy based on, Okay, how can we make this business as
attractive as we can to the nextacquirer. Yeah, And so it's an
interesting mindset because not many entrepreneurs orbusiness owners think about it that way.
(30:21):
You know, it's it's it's acommon expressions. Okay, we're at point
A, and how do we getfrom point A to point C? And
it's not always a straight line,and we know that there's some hurdles and
things that come up and um,you know, you get to a certain
point and they're stair steps and butso like I did a retreat, um,
and I'm going to do another one. It's going to be great.
And it's all about educating on thesale process. And we talk about that.
(30:45):
We talk what are value drivers?You know, growth team, um,
you know, visibility, there's youknow, there's all these different value
drivers in a business. So understandingwhat are the key value drivers in a
business, and then what are thedetractors? Customer concentration, it's applier concentration.
(31:07):
That's risk, it's big risk.So understanding you know that buyers kind
of call your top three five.However many customers, what's your relationship with
them, making sure they're going tosay the right things, making sure you
know, you understand what that processis going to entail. So you know,
(31:27):
in the retreat, it's what arethe value drivers, what are the
detractors? How do you think abouttiming? How are companies going to value
you? What are the different what'sthe buyer universe? You know, what
does it mean to get brought byPE and what does it mean to be
bought by a strategic where you mayget folded into a bigger organization. You
(31:48):
know, there's there can be hugebenefits both for your team, your company,
your customers, but it's it's adifferent outcome then if you are just
you know, a platform company forprivate equity. So I try and help
owners understand what those different paths mightlook like and mean to them, their
team, their customers, their community, because all those things are really important
(32:13):
in a sale process. Well,I want to come back to the retreat
and I want to learn more abouthow our audience might be able to reach
out to you and learn more.So we'll get the web address up on
the screen. But before I dothat, you mentioned that a couple of
detractors that you just happen to tossout customer concentration risk, supplier risk,
(32:34):
just as a couple of examples.But I think it's important to acknowledge that
in some industries you're stuck. Youknow, you have a limited number of
suppliers. Okay, that's the givenin your industry. Now what are we
going to do? Now? Whatcan we work on? Or you know,
you have three customers that represent seventyfive percent of your revenue, it
is what it is. Or you'renot going to get rid of those customers.
(32:55):
But what else can we do tomitigate that? Yeah, I think
it's a lot of it in thatkind of situation, and that's very true.
I mean some say, you're inthe aerospace, we had several aerospace
there's not very many buyers, andyou are going to have customer concentration.
But maybe you can build out yourdata to show, okay, we're on
(33:17):
this many platform airline platforms, orwe sell to different divisions within that same
company so it's different buyer universes.Or here's how sticky it's been. You
know we land, we expand withinthat customer. So there's ways to get
(33:38):
buyers comfortable with those detractors. Butif you just walk into your sale process
without thinking that through and building outthat story, then they're gonna be like,
whoa you know that one customer lease, what am I bought? I
bought half the revenue that I thoughtI was buying. So how do you
(33:59):
get them comfortable with what may bejust a key part of the business.
And I think being thoughtful in advanceis really really important. And to that
point, you know, really understandingwhat are the key performance indicators of your
business and a lot of people justaren't tracking that. And I tell you
what, when you go to market, you got to go fast. I
(34:22):
mean, I have a number ofstories on the less positive side of what
can happen in a sale product youjust time is a risk. I had
one where the two largest companies customerscombined, they were maybe twenty percent and
eighteen percent, and all of asudden, we're right at the li stage
(34:44):
and we don't have the largest customerthat's twenty percent. We have the largest
customer that's almost forty percent. That'sa big difference, and you just don't
know, you don't know what's goingto happen. Or another case where one
of the largest projects, it wasa damn project up in Canada and the
government, Canadian government said, man, we might put this on hold,
and it's like, so we're justjumpers down a memo. Projects that's tough,
(35:07):
so you know you you want tobe ready to go and go fast.
So what's the information buyers are gonnawant? And you're not going to
have it at all because they're gonnamake you you you're just not going to
believe how much information they want andhow they want to slice and dice.
But make sure you're slicing and dicingit in the most important ways that they
(35:27):
can get comfortable with your business.Very interesting, very interesting, and that
I've never really understood to that degreethe reason why it is so important to
move quickly. It's because things changeand things change that you know, your
example of that customer that was twentypercent, they're now forty percent. That
seems like a really good thing formanagement. They did something great. They
(35:50):
just their best customer likes them thatmuch. But it's actually more risk for
the buyers, so it's a negative. So you can't control that. So
I get it a quick plug fora chloropartners because some of what you were
describing, I know they're really engagedin and do a great job with on
the cell side market study. Soif you're painting a picture of a story
and you're stuck with a situation whereyou have some supplier concentration and you're able
(36:15):
to explain, well, here's thereason why this is not as big a
concern as you might otherwise assume.When you're able to tell that story and
lay it out very clearly for abuyer, you're reducing risks. So those
cell side market studies can be veryhelpful in that regard as well. So
back to the retreat, I'm notsure I was aware of that, So
let's let's hear a little bit aboutthat and then and how our audience can
(36:38):
contact you, and then certainly ifthere's anything else that you wanted to share.
Sure, So before I forget you, if you go on our website
Craftsberry Consulting dot com, there's alink in info at Craftsberry Consulting dot com.
Email and love to hear from you. Love to have folks at the
retreat. We last one we didat a dude ranch. Probably do the
(37:00):
same so you can kind of getaway. I happen to love horses,
so but there's also a shooting rangeand ebikes and all those things. But
you know, so it's about gettingout of your setting and stepping back and
thinking about your business in a differentway, and I have a ton of
great content. I'm working on acase study from start to finish, so
you can really understand what someone talksabout a teaser what does that mean?
(37:22):
Or a confidential information memorandum? Whatis that? So we'll help you walk
through what is a process so youcan get ready. We'll help you understand
what the buyers are. We'll helpyou know what are the advisors you need
and how do you pick them?You know, there's a lot of great
investment bankers out there. How doyou find the right one for you?
(37:43):
And I'll tell you if fit isincredibly important, as is the ability to
run a really competitive process, andsome bankers are way better than that than
others. So how do you sussout well which one is the right one
for me? So we'll talk aboutthat. We'll talk about you know,
do you need a mark it stay? You know those you know what are
the different options of things? Andyou know Claris someone I've worked within the
(38:05):
past and they do a great job. So um as well as being you
know what you do as you providea support system for CEOs and that's also
part of the retreat. It's havingother ceo so you can sort of talk
through, you know, what areour strengths, how do I think about
growth, how do I make thismore tangible for buyers. So it's a
(38:25):
it's a three day event and wedo some fun activities, but we also,
you know, really help you understandwhat the exit process is in how
to get ready for it and itdoesn't you know. And the last one
we had, we had a womanshe had just started her business maybe a
year earlier. It was on areally nice trajectory and she just wanted to
(38:45):
know how to think about exits downthe road. And another, you know,
another one was seventy five years oldand she was their generation. And
it's and it's men and women.But so it's a great experience. It's
a lot of fun. I love. I love helping owners think about this
because it's it's a really important milestonein your life and then being ready for
(39:10):
it and being thoughtful about it canmake all the difference in the outcome.
That's great, all right, Well, thank you Caroline Young Craftsberry Consulting.
Check them out online. And youknow, I'm a I'm a big fan
not only of Caroline but also thework that she has done and does,
and it's it's similar. Particularly theconcept of the retreat bringing people together in
(39:34):
person to collaborate and mutually support oneanother as well as to learn, is
very similar to the work that wedo at Strategic Growth Council dot com.
So take a look. We're apeer advisory counsel. We meet in person,
but we also mainly meet virtually ona monthly basis for several hours and
we help solve cases. So ifyou're interested in learning more, go to
(39:57):
Strategic Growth Council dot com. Butalso so it's a good place to check
out not only this episode, butall of our episodes. You can follow
us on YouTube or wherever you listento podcasts. Put us in your listening
que, review the show, giveus a rating, and thanks for listening.
(40:22):
Produced by Heartcast Media
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Ruthie's Table 4
For more than 30 years The River Cafe in London, has been the home-from-home of artists, architects, designers, actors, collectors, writers, activists, and politicians. Michael Caine, Glenn Close, JJ Abrams, Steve McQueen, Victoria and David Beckham, and Lily Allen, are just some of the people who love to call The River Cafe home. On River Cafe Table 4, Rogers sits down with her customers—who have become friends—to talk about food memories. Table 4 explores how food impacts every aspect of our lives. “Foods is politics, food is cultural, food is how you express love, food is about your heritage, it defines who you and who you want to be,” says Rogers. Each week, Rogers invites her guest to reminisce about family suppers and first dates, what they cook, how they eat when performing, the restaurants they choose, and what food they seek when they need comfort. And to punctuate each episode of Table 4, guests such as Ralph Fiennes, Emily Blunt, and Alfonso Cuarón, read their favourite recipe from one of the best-selling River Cafe cookbooks. Table 4 itself, is situated near The River Cafe’s open kitchen, close to the bright pink wood-fired oven and next to the glossy yellow pass, where Ruthie oversees the restaurant. You are invited to take a seat at this intimate table and join the conversation. For more information, recipes, and ingredients, go to https://shoptherivercafe.co.uk/ Web: https://rivercafe.co.uk/ Instagram: www.instagram.com/therivercafelondon/ Facebook: https://en-gb.facebook.com/therivercafelondon/ For more podcasts from iHeartRadio, visit the iheartradio app, apple podcasts, or wherever you listen to your favorite shows. Learn more about your ad-choices at https://www.iheartpodcastnetwork.com
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com