THESE 7 LITTLE THINGS MAKE YOUR COMPANY MORE ATTRACTIVE


For near-term buyers and sellers in the convenience services business, the “little things” are more important than ever. If you plan to sell in the future, be especially attentive to these 7 things that make your company more attractive to buyers.

1. Real estate holdings

Increasingly, I am seeing well capitalized, cash buyers, with an interest in purchasing operator owned real estate as part of a convenience services deal. It makes sense. In these somewhat uncertain times, real estate offers some predictable long-term value and security for a buyer.

2. Diverse mix of accounts

A company that is 80% anything, OCS, micro markets or vending, has a bit more volatility associated with it. Just ask the large market operators who made their living on premium downtown locations, many of which are still idle.

Near-term buyers are looking for account diversity. As we saw during the pandemic, essential service locations such as hospitals, manufacturing and distribution centers often experienced an increase in sales, while the classic office workplace was empty. In most cases, until at least January, most will remain quiet.

3. A strong fleet of vehicles

This positive factor has taken on greater significance for two reasons.

Supply chain issues – These three words have become part of the business vernacular over the past year and half, and increasingly, the problem is growing, especially when it comes to vehicles. Even more challenging – customized vehicles, where parts remained backordered along with trucks. Accordingly, having a strong and well-maintained fleet is a big positive for near-term buyers. It isn’t that easy to find trucks, sprinter vans and other service vehicles right now.

Energy costs – A fuel efficient fleet translates to dollars these days as gas pump prices continue to soar, making energy savings a bigger issue than ever.

4. Available employees

I was recently involved in a deal that featured a unique request from the buyer. They insisted that the service manager, the route supervisor and at least three route drivers had to stay on board for a minimum of one year.

These are strange days indeed on the personnel side as all industries are struggling to find quality staff. The convenience services industry is no exception. A seller who can offer a strong team will find themselves in a favorable position. After all, someone needs to operate the company for the buyer once the transaction occurs and staffing up is not as simple as it once was.

5. Presence of the seller’s management team

In many past deals, the seller, if in a management position, is shown the door immediately after the sale occurs. That seems to have changed. Increasingly, both parties consider an ongoing presence by the seller’s existing management team to be a positive factor.

For the buyer – It makes sense to keep the previous management team/ownership around a bit longer than in the past, simply because it isn’t business as usual right now. Acquisitions are being made with existing account bases often in a re-populating mode, so there is an increased learning curve associated with those locations. The presence of the seller’s management team can help ease the transition as the locations get back to their pre-pandemic size (or close to it).

For the seller – Earn outs are being extended to record terms, as much as one year out. Accordingly, the seller might want to stick around just to protect their own interests – to be sure that revenue is maximized and that growth continues.

6. A leading VMS platform

Any operator who is currently relying on one of the leading VMS platforms has invested wisely when it comes time to sell their business. That is the feedback I am receiving from the current crop of near-term buyers. If an operator is using one of the industry’s leading VMS platforms, the transition to the buyer’s program will be that much easier.

An easy software transition will save the buyer time and money.

7. Contracts – more important than ever

As workplaces repopulate and refreshment programs are reinstated, operators should expect a revolving door when it comes to the facility management people they will now be serving. There will be many newcomers who only know the operator by their company name. Established relationships will be out the window.

Contracts add a degree of security for buyers (they always do), especially in these times that are filled with so much uncertainty.

We never lose sight of the fact that there is more than one buyer out there for your business. This is a defining characteristic of a “sell side broker.”

That is why I offer free resources like the 2021 Exit Strategy Planner. I want you to have your eyes wide open when you consider whether it is time to sell your business.

NOW AVAILABLE - ORDER MY FREE 2021 EXIT STRATEGY PLANNER

Buyers come to me because they know that I serve sellers who have thoroughly and thoughtfully considered their exit strategy with my help. That is the type of seller that you want to be – a seller who has their ducks in order, has taken steps to make their business as attractive as possible and a seller who values their employees enough to make a deal that everyone will feel good about.

Take that critical first step. That is often the toughest one to take.

Order my free 2021 Exit Strategy Planner. At the very least, it will provoke some thought, and this is a good time to think about your future.

Why make VBB Advisors a part of your team?

There are at least three very good reasons to talk to me about being a part of your team for this important chapter of your business journey.

  1. Experience – I have done more significant deals than any other business broker in our industry.

  2. Access to buyers – Throughout the pandemic, I have been in ongoing discussions with potential buyers, from both inside and outside the industry.

  3. We are a sell side broker – We only represent the seller. Everything we do is on behalf of the seller.

Whatever your reasons are to sell your company - the timing, the current frustration, the desire to enjoy life or an interest in rewarding yourself for years of hard work – VBB Advisors can help you realize your goals.

I am Mike Kelner, the leading sell side intermediary in the convenience services industry. Contact me for a confidential conversation and to explore the possibilities.

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