Family Business Case Study #35: Financial Analysis of an Acquisition

Uncategorized Nov 29, 2021


Cash Flow From the Recent Acquisition

At this point in the case study, six weeks after the date of acquisition, we see that cash flow from the acquisition is starting to appear on the books – mainly because the deal allowed receivables to remain with the vendor. This is not uncommon.

The all-important question about whether cash flow and revenue can be maintained as per the initial projections – has been answered. And it looks like it’s the case. Great news.

In other words, we can draw two conclusions:

  1. There hasn’t been any significant loss of customers.
  2. Initial financial projections were accurate and honest.


Early Stages of Running the Acquisition

There is another interesting action item that my client has learned over the years. “Keep the old brand in place until six months or a year later.” Keep things as smooth as possible for the existing customers. Keep the old company name. Keep the procedures as regular and comfortable as...

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Family Business Case Study #34: Multiplying Acquisitions

Uncategorized Nov 26, 2021


Various Acquisitions and Acquisition Plans

Our focus today was an update on various acquisitions and acquisition plans – it’s a vast chessboard of options and scenarios.

This is exactly what makes the art of business so exciting and – honestly – so complex!

Here’s an example of some of the complicated matters going on:

  • The new acquisition situation is coming along smoothly. Good.
  • The other more remote acquisition location is problematic – the free government money still available has actually dried up the pool of candidates for route driver positions. Disappointing but not that surprising, really!
  • But the possible equipment purchase is still alive. Good.
  • Another possible acquisition has emerged. This is in another state to the south of the axis of current locations we are talking about. It seems that a father and son team are now interested in disposing of their shop – so my client is of course looking at it seriously. Good.
  • ...
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Family Business Case Study #33: Business Purchase Surprises

Uncategorized Nov 22, 2021


Are there surprises when you buy a business?

This week the client and I discussed the kinds of surprises you might find when you first take over a business you’ve purchased.

Were there any?

Well, yes – but nothing too shocking.

  1. The bookkeeper, without mentioning this to my client, quit on the day of the purchase. What makes it more interesting was that she is the spouse of the vendor. So, somewhere in the mix, no one seemed to know (or ask) if she was intending to stay. A bit of a shock, but nothing that the head office bookkeeping team can’t handle.
  2. The vendor seems to have informed existing customers of the change of ownership but it’s all going to proceed smoothly because he wants to stay around managing this location for another ten years or so. Interesting and not really a surprise. But good news still.
  3. The other (even more remote) location equipment purchase provided another nice surprise. It seems that another similar business owned by someone...
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Family Business Case Study #32: Steel Shortage

Uncategorized Nov 15, 2021



An ODD thing to say! Why is it relevant today?

The top of mind issue today was the shortage of steel and thus the delays (and costs) of obtaining “blanks” for in-house blades.

That could be a surprise for the listener because we’ve been talking for weeks now about the acquisition deal that is taking a long time to close, the idea of an equipment acquisition from a shop that is closing, and a number of other topics.

And we can today quickly set that all aside because:

  • The acquisition deal closes this week. Yay!
  • The equipment acquisition from the competitor that is closing is proceeding. Yay!
  • The new building at HQ is in the design phase. Yay!
  • The bank seems to be on side with all of the above. Yay!


So, now that we’ve set aside these BIG topics, let’s go back to this steel thing.

It’s like a little leading indicator. A shortage of steel is a thing? What does it mean?

Well, here’s what I...

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Family Business Case Study #31: Patience is a Virtue

Uncategorized Nov 13, 2021

This is the situation today. We took a two-week break because of family visits to the home of my client – family that included “the marketing brother” and his family. This meant that a lot of good behind the scenes business discussions were going on. So the break from this case study was fine.

If I were to specify a theme for today’s update, there would be three points (see below) that I would summarize as: 

Be patient; Be conservative financially; Delegate more.”

Or, to give a bit more detail:




  1. Be patient because sometimes in business things take a long time to conclude.
  2. An example: The close of the purchase deal....
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Family Business Case Study #30: Weekly Business Metrics Dashboard

Uncategorized Nov 08, 2021


Here is a summary of our talk on how to create weekly metrics on business performance in a “dashboard” style report.

  1. The idea of a dashboard is to create a visually useful report each week. Visually useful means it isn’t just numbers and data. It entails conclusions as to whether the information or data is good or bad, trending better or trending worse, or whether things are okay or urgently need attention. 
  2. Another good feature of a weekly dashboard report is that it should not require “interpretation” by people. The more people you have looking at a report that requires “interpretation” (e.g. financial statements alone) the greater the chance for mis-interpretation, and the greater the chance for wasting time. It is always better to have your system (or your accountant/bookkeeper) do the interpretation for you according to the exact metrics you specify.
  3. A great way to show information visually is to use color-coding such...
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Family Business Case Study #29: Small Business Reality

Uncategorized Nov 05, 2021


Today’s topic is the “fireside chat” every founder should have with successors.

It happened when I asked a few questions about how the client really felt about the readiness of his successors to take over the business – even with an orderly, well-planned transition.

What came out was not only interesting but also foundational for a succession plan win.

  1. He relayed the lesson of starting out, having purchased the business from family, with a crushing debt load, credit cards loaded to the max, and a past practice of re-financing the debt (longer term, lower payments, maybe even at higher interest rates), and the six long years it took of grinding down the debt inch by inch and dollar by dollar, to the point where the line of credit is cleared monthly and the debt is manageable.
  2. He recalled the movie that replays in his mind regularly of not investing at a pace beyond the ability to pay. In other words, when cash is tight and revenue is low, you...
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Family Business Case Study #28: Pleasant Surprises

Uncategorized Nov 02, 2021

Features today – a lot of “pleasant-ness”:

  • Pleasant surprise: A competitor goes out of business and asks my client to buy the equipment and the customer list.
  • Pleasant news: The bank agrees to everything.
  • Pleasant news: The acquisition deal can finally close.

Today we discussed something that often happens in business – the surprise (pleasant) call to get new business from a competitor going out of business.

My client initially looked at this potential acquisition but for a number of reasons that became apparent on a due diligence visit – passed on the deal.

Now the operator has decided that he has no real successor and the market for this type of business operator is limited. Thus, with no real prospect of an internal succession plan taking effect, he’s decided to approach my client. 

My client, of course, is looking at this seriously and likes the equipment and the high probability of getting the entire customer list – all for a...

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Family Business Case Study #27: Growth by Leaps

Uncategorized Oct 27, 2021


In today’s work session we spoke of two exciting trends in this family business:

  • Growth
  • Objective Performance Measures

Why do I call it exciting?

It’s because what’s happening is something we often see in a business that is based on a good solid foundation. This business is not built on sand. It’s really built on a solid rock foundation!

Solid foundation businesses grow in step-wise fashion. They rarely grow on a steady percentage increase in sales every year. If that were the case for most businesses we would see ordinary organic growth resulting from ordinary, steady activities such as sales, product improvements, or gains in efficiency.

Rarely have I seen what I am about to tell you today.

Hang on to your hat! This is a very rare combination of factors. For these factors to come together at a single point in time is not only exciting, but also sure to create a very attractive business.


This is a story of five different kinds of growth going...

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Family Business Case Study #26: Lessons Learned

Uncategorized Oct 25, 2021





First, here are the results of today’s work session:

  • Build a new building.
  • Get out of the shop more and work on the business rather than in the business.
  • Finish writing the family succession transition manual.


Now, the grand summary at the halfway point! Here are the lessons I would pass on to you that represent the realities of life in small business in Middle America.


  1. Family business is good. It promotes Catholic values on the family, on work, on justice, and on charity.
  2. Patience with and tolerance for your employees, especially those who have been with us for a long time is good. An owner who practices a level of patience does receive, in return, loyalty and dedication – and long run productivity. This is not only virtuous but it is practical.
  3. Persistence counts. Every day, every week, the owner and...
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