In this interview, B.J. Jacobs, Managing Principal at Goshen Park Capital shares his insights on what makes a business an attractive acquisition candidate.

The conversation sheds light into what elements of a business drive value from the buyer’s perspective. We cover a range of topics in this intro/overview session including:
– Recurring revenue: Do your customers purchase your product or service regularly?
– Value creation for customers: How important is your solution to your customer? Are you a value-add, strategic supplier vs. a vendor? How do you help your customers compete successfully with their customers?
– The Team: What capabilities you need for the business to run independent of the owner.
– The Story in the Financials: What metrics are important to determining value?
– Impact of COVID-19 on the market for transactions: PPP Loans, Impact on customer demand, leases, etc.

The video contains helpful tips on how to improve the long-term value of your business and ensure its success well into the future.

Daniel Wheeler, President of Sunbelt Design and Development in San Antonio Texas, walks us through his purchase of this Defense manufacturing supplier. Daniel is a former Air Force Captain who successfully pursued business ownership via acquisition.

Armed with the perspective of both buyer and owner/operator, Daniel talks us through what made Sunbelt the right business for him. He also imparts some powerful guidance on the importance of leadership in the business, particularly in times of transition and uncertainty.

The process of preparing your business for an exit event is not easy and takes time. Here are a few tips to consider from the conversation with Daniel:
– Seek help to generate accurate financial statements. This is really important for the seller to establish a value for the business. The financials also highlight the business’ health.
– Know your market. How big is the potential customer base you can serve? Is the market growing? Are there many competitors or few in the space? What differentiates you from the competition? What are the needs of your customer and are you a high value solutions provider? Whether you intend to exit or not, exploring these questions are an indicator of the business’ growth potential.
– Develop the leadership capacity and create a culture of high performance. The goal of every owner should be to build a business that can run without them. In my opinion, this is one of the highest priorities for all business owners. Time is our most valuable resource. Building the team to function independently allows you to take a vacation with family or friends. It reduces the execution risk for a future owner and increases the value of the business.
– Build scenario plans to address the risks and liabilities around the business. The government requires larger banks to undergo stress tests to confirm their viability under different adverse conditions. I recommend business owners do the same. The benefit is two-fold. Anticipating and planning for what can go wrong improves the resilience of your business. Mitigating the risks before hand also strengthens your negotiating position with a buyer. Be proactive!
– “Just Do It!” Whether you are a seller or buyer, it is important to take action. We know that running a business is not easy. Increasing its value and successfully exiting is even harder. Don’t give up. We are here to help.

B.J. Jacob’s, Principal at Goshen Park Capital, joins us again to share his thoughts on valuing potential acquisition candidates. As professionals progress in their career, entrepreneurship through acquisition may be an attractive alternative for a variety of reasons. A buyer’s valuation of a business is influenced in part by their goals for the business (e.g. stable income stream, potential growth opportunities, etc.). Both current entrepreneurs and future buyers will benefit from watching how B.J. approaches valuation in his quest to find the right business to acquire.

Robert Aguirre, Founder and Principal at Bellator Trust talks with us about how his entrepreneurial journey led him to San Antonio with his wife- a San Antonio native- and newborn son. As he works toward buying a business here, Robert brings a view of the acquisition that extends beyond a transaction to a continuation and expansion of the legacy of the current owner. He recognizes and appreciates the role people play in a business’ success. The assets of the business extend past those on the balance sheet and include the relationships with employees, customers, and the community. Roberts provides an inspiring vision for creating opportunities for all these stakeholders through his efforts here in San Antonio.

Please help me in welcoming Robert Aguirre to our community and let us know if you are interested in continuing the conversation!