When you get an acquisition offer, your eye will immediately go to the offer price. That’s only natural. But, there are two other negotiating points that could have just as large an impact on your windfall when selling your business.
Groot discovered the importance of all three when he went to sell JP’s Coffee Shop – a business that USA TODAY® voted one of “Top 10 Coffeehouses in America”.
In Jack Groot’s case, he sold his business to a supplier.
Your supply chain will include natural acquirers adjacent to your business. We’ll help you identify a short list of strategic acquirers during month 11 of The Value Builder System. It all starts with getting your Value Builder Score.
About Jack Groot
Jack grew up in Grandville, lives in Hudsonville, and owned his business in Holland MI for over 20 years. Jack Groot’s entrepreneurial role model was his father, Jake Groot. The family business of homebuilding and developing and selling real estate started in the late 1940s, shortly after Jake emigrated from the Netherlands. Jack credits his father for being a great example of problem solving, thinking outside the box, and how to do customer service. In 1993, Jack founded JP’s Coffee in Holland, named a “Top 10 Coffeehouse in America” by USA TODAY® Travel Destinations. He also created an international coffeehouse and business training school, and was an industry consultant, industry magazine columnist and blogger. After Jack sold his business interests, he returned to his homegrown roots in customer service, buying and selling real estate, as well as consulting for others in business start-up and operations.
Some Highlights of the Show
Business: JP’s Coffee Shop
2:56: A timely dream.
4:00: “Award winning downtown, fabulous location… at that point we were leasing the building.”
4:20: Started the business in 1993 and sold in 2014.
4:46: “1994 saw the first $250,000 in revenue… within five years I had paid off all of my debt.”
6:30: “My goal was to move from working IN my business to working ON my business.”
7:00: “I was no longer needed as it pertained to the operations of the business. My job, it morphed into being a leader.”
7:44: “In 1993, my landlord said to me, “Buy the building, please…” I can’t, so I leased… Five years later I was debt free and ready to purchase… I tried over the next 15 years… until I finally got the building in 2013.”
10:12: The triggering event.
10:50: “My business existed to serve me; I didn’t exist to serve it.”
11:15: “One of my vendors came to me… ‘If you ever decide to sell, I want to be first in line.’”
12:10: “Somebody tried to buy my business… I’m not looking to sell… What do I do?”
12:20: “Jack, whether you sell or not is irrelevant. You must follow this process, improve and learn from this process… Come out better for it.”
14:50: Consulting practice, barista school, industry products – everything, lock, stock and barrel.
16:00: Pre-existing relationship with the vendor built trust as a future acquirer.
19:30: Juice and smoothie bar franchise concept with poor financial performance.
20:45: Words of advice on failure.
21:45: “Large amount of debt resting on the shoulders of the performance of the coffee shop.”
25:40: The valuation range.
27:00: Negotiating the terms without attorneys present.
29:45: “If John sells his business, it accelerates the contract.”
30:40: “Lucrative position with a lot of upside over the next few years.”
30:50: The employment contract.
38:30: leaderization.com
The Value Builder System™
Built to Sell Radio is brought to you by The Value Builder System™ where, our global network of Certified Value Builders™ will help you improve the value of your company by up to 71%. It all starts with getting your Value Builder Score here.
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For additional information regarding Florida business sales, acquisitions and valuations, please contact Eric J. Gall at Eric@EdisonAvenue.com or 239.738.6227. Also, visit our Edison Avenue website at www.EdisonAvenue.com or my personal website at www.BuySellFLbiz.com.
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