TORONTO MANAGER

Buying up the Competition is a
Great Way to Grow your Company
Prior to Selling
Eric Gilboord
In my experience, within the SMB
world, owners are definitely looking
at buying up their competition in
order to grow or to eliminate them
altogether. It might be that you are
a $3-15 million company within a
narrow specialty niche. Your competitors
could be 3 or 4 players, also
with boomer aged owners, all doing
the same amount of business as you
or a little less and all wanting to get out. Let’s look at a real case
we are currently working on. Does it sound familiar?
Our client (Bob) is 53 years old and his company has sales of
$4 million annually. They have remained at this level for the
past 10 years mainly because he and his partner were comfortable,
made a good living and didn’t need the perceived headaches
of running a larger company. So little effort was made to
grow the business.
possess the skill sets he requires to run and grow the larger
company. Bob can run this as a $9 million dollar business
or he can choose to grow it further before he exits. He may
choose to grow it to $15 or 20 million or more and then sell.
It’s up to Bob and how much work he is willing to put in.
6. In order to exit successfully Bob will need an Exit Plan. We
will develop that plan with him and help execute it.
7. He will require a buyer(s) and we will identify them. He will
also require our team to represent him in the sale.
8. Bob will have now taken a lifetime of experience and grown
and sold a company worth significantly more than the company
he was running with his partner when we first met.
Quite an achievement and a great way to go out on top. Not to
forget he will be significantly better financed for his retirement.
For more information on transitioning your company please
contact Eric Gilboord eric@warrenbdc.com. Or to find out what
your business could be worth, pick up your free Proxy Valuation
Form at www.WarrenBDC.com
He believes his operations skills are superior to his competitors
and he could therefore absorb their businesses and run them
better than they could. His partner (Joe) is 60 years old and
wants out. He is not interested in growing. Bob thinks differently,
he has another 5 years or more in him and the idea of going
out on a high has gotten him re-energized about his own company.
So Bob now has the opportunity to fast forward growth by
buying out his partner and his competitors.
Here are the next steps highlights as we have outlined for Bob
to create an Exit Plan that will allow him to retire on a high note.
Possibly with greater success than he had ever imagined.
1. Bob has to first buy out his partner. To do this he needs advice
and capital that we will provide.
2. Bob now has 100% of his company and makes decisions as
he sees fit. So growing and acquisitions are definitely on the
agenda.
3. Before he can think about buying his competition and growing
he needs a plan. We will help him develop and execute our
WarrenBDC Deep Dive Integrated Plan.
4. He needs to buy out 3 of his key competitors. Two have
annual sales of $2 million dollars and one is at $1 million in
annual sales. To do this he needs advice and capital that we
will provide.
5. Now Bob is running a $9 million company post purchase and
likely has some new challenges that come with larger organizations.
We will provide him with our team members who
THE TORONTO MANAGER
Spring 2016 Edition - Page 24
L-R: Sarah Benitez and former Premier of Ontario Dalton McGuinty
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