Ian Schoen built Two Tree International up to $4 million in revenue before he sold it in a multimillion dollar exit in 2015. Schoen was able to attract a number of buyers because he had created an operating manual employees could follow.
About Ian Schoen
Ian Schoen is the co-founder of Two Tree International, a design and manufacturing firm that brings products directly from concept to customer. The company was started in 2008 with a $50k loan and had grown to sales of over $4 million with 15 employees when it was sold in 2015. Ian is currently spending his energy bringing together a community of like-minded entrepreneurs with an emphasis on meetups, masterminds, and travel at DynamiteCircle.com. His journey and anecdotes are charted weekly on a podcast with his co-host Dan Andrews at TropicalMBA.com. Ian can usually be found racing something with wheels on the weekend and on Twitter the rest of the week (@anythingian).
Some Highlights of the Show
Business: Two Tree International
2:30: “We fell upon a couple of industries.”
2:55: “From the beginning, I said no way to client work … a lot of the times the products don’t go anywhere … you’re getting paid hourly.”
3:30: Three very different products and markets.
5:55: “On the back end a lot of it looks the same… where it starts to differ is your customers and the marketing.”
7:13: “Four million in sales annually.”
7:35: 2015 and the triggering event.
10:05: “We started creating standard operating procedures in the business. A set of documents that would help us run the business. Basically plug anyone in in any position and have them understand [it].”
10:43: “If you have processes in place in your business, it makes it very attractive to potential buyers.”
13:42: “I was naive… I remember asking the GM [who left] to just stay on for 3-5 months while we sell this [company]. I thought it was only going to take 3-5 months to sell this company.”
14:15: Finding a business broker on the internet.
15:00: The buyer profile.
16:20: “I think what was interesting about selling a business this size is that a lot of times the buyers don’t necessarily care what they are buying. They just want to buy a business. Another assumption I had that was wrong was that you had to be an expert.”
18:20: “Ultimately … business brokers are not necessarily sales people… Their job is to bring the deal to the table. It is your responsibility as the owner to close the deal and make the sale. They can help facilitate the process, but I never relied on my broker to make and close the sale. I didn’t understand this at the beginning of the process.”
19:58: “I found that a lot of people who were enquiring about our business didn’t have the funds to follow through. They were basically just tire kickers.”
20:27: “Prequalifying people… Are you qualified to talk to me?”
22:00: Multiple letters of intent.
24:01: “You have to keep your eye on the ball [when it comes to offers].”
25:14: “The business broker’s incentives are misaligned with the seller’s incentives.”
26:45: The last offer 12 months later.
27:48: 10% to the broker.
28:04: Working with lawyers.
29:37: “Lawyers kill deals… That’s one of my takeaways here.”
29:55: The difference between a deal lawyer and the lawyer who incorporated your company.
32:00: “What I didn’t know … It’s the responsibility, generally speaking, of the buyer to draft up most of the documents… We didn’t have to spend too much … $20,000.”
36:10: TropicalMBA.com | DynamiteCircle.com
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