Selling a Business; Experience #1
The Scenario
Local tree care company purchasing another local tree care company.
Both companies were similar in size and did similar services.
I was an employee of the company being purchased.
Timeframe = Early 2000’s
The Buy-out Measurables
While I was working for the selling company, I eventually took over the purchasing company and became CEO / part-owner. My perspective of this buyout will only be from the vantage point of the buyout and following 2 years. I will measure each of the following 10 parameters with one of these rankings (+), (++), (-), (--) or (E) for even:
Employee Retention (--)
There was immediate anxiety and anger from the employees (on our side) because how the situation was handled. All of the crews were told to “gear up” for work that day and we ended up detouring to the purchasing company’s office instead. The bomb was dropped out of nowhere. This short-sided decision basically caused most employees to get up and go home angry. After cooling off over the weekend, every employee decided to give it a go, but this did not sit well.
By the end of year one, there were only two remaining employees (I was one). By the end of second year, there was just me.
Employee Engagement (--)
While most employees gave it a shot, I think the ambush lingered in our minds. Engagement didn’t exist and defiance against management became an issue. Personally, I was moving into the role of Sales Arborist (pre-merger), but that was put on hold for almost a year and a half which did not sit well with me. The crews did not necessarily blend well, and all left shortly after, including the owner of the purchased company.
Client Retention (E)
While some clients did move on, most clients decided to remain with newly formed company. A considerable amount of effort was put towards informing and assisting clients through the process.
Professionalism (E)
While both companies had a few ISA Certified Arborists, I would have considered both companies to be at a “medium” level of professionalism at that point. In later years, with new management, sales team and office staff, the resulting company ended up being the first tree care company to become TCIA Accredited in Minnesota so professionalism improved (but had nothing to do with the merger).
Safety / Injuries / Damages (E)
I would say the focus on safety improved slightly at best, but both companies had some “old school” climbers that liked to show off a bit too much. This resulted in some serious issues including a chain saw in the face incident. Over time, safety did improve but took some effort and new blood.
Customer Service (+)
The level of customer service definitely improved primarily due to the existing office and sales staff, which had talent in both departments.
Crew Talent (+)
Both companies had talented employees, but right after the merger, the set-up of the newly formed company allowed us to bring in additional talent. The existing size and personnel of both individual companies did not allow for recruitment, training and employment development. The merging of both companies definitely improved this area.
Quality of Work (+)
Similar to crew talent, the new operations of the merger allowed more chances for training and quality control.
Internal Processes (E)
I don’t necessarily feel either company had a great internal processes or structure for hiring, training, development, scheduling and general operations. The merger allowed the new company to put more effort into streamlining internal processes and even become TCIA Accredited.
Ease of Working with Purchasing Company (++)
I personally found working with the owner of the purchasing company to be a positive experience. He was definitely passionate about tree care, loved his employees like family and was open to change and improvement. There wasn’t always agreement, but at least there was open discussions.
Overall Summary of Experience
The first year was definitely not a smooth process, but some improvements were to come. Basically, all employees ended up leaving (except myself) which eventually ended up with a further company shake up. There were definitely some initial struggles between both company owners, primarily over financial decisions.
Last comment from The BIG Oak = I truly believe if the “ambush” had not happened, the first year could have gone much differently. However, at this time (20 years ago), it really felt like high-end tree climbers ran the show. Their egos and cowboy-mentality were hard to overcome from a business standpoint. Over time, most employees were replaced including the office staff, sales staff and most production crew. At some point, it became impossible to operate under the “old school” mentality of complacency and most employees were pushed out the door. Improvement and change can be scary, especially for average complacent workers.