Selling a Business; Experience #2
My intent with this website is not to convince anyone to start a business, sell a business, or NOT start or sell a business. I am simply sharing my experiences and insight to hopefully assist anyone in the process. I completely understand and respect the effort it takes to start or operate a tree care business of any size. Obviously, other former tree care business owners could have had similar or completely different experiences. These just happen to be mine.
The Scenario
National tree care company purchasing local tree care company.
Companies were greatly different in size but had most services the same (with few exceptions).
I was the CEO / co-owner of the company being purchased.
I was retained as a Key Employee of the purchase and was the Local Manager of the newly formed company.
Timeframe = 2009-2011
The Buy-out Measurables
My perspective of this buyout will only be from the vantage point of the buyout and following 2 years. Since I was the Local Manager, I was aware and involved heavily in worker through the merger. For each of the 3 buy-out experiences, I will measure each of the following 10 parameters with one of these rankings (+), (++), (-), (--) or (E) for even:
Employee Retention (+)
All employees were notified of the merger in advance during a company meeting allowing for feedback and questions. Unfortunately, many employees had to be fired to get down to a company size that the national company wanted. Several talented employees were let go. This was a tough beginning to the process. The thought of letting 10 employees go sounds unfathomable these days. For the 2 years following the buyout, only one employee had left so I will rank this as “E” since the purchased company had great retention also. However, I left following the end of the 2-year buyout. Following my departure, several employees also left. Within a short time period, only one original employee remained with the purchasing company.
Employee Engagement (-)
While many employees were a bit on edge (and looked around for other opportunities), they all gave honest effort to make it work. I feel engagement was higher at first and tended to fade by year 2. The lack of national support for improvement ended up wearing down employees.
Client Retention (-)
A good number of clients did move on even though a considerable amount of effort was put towards informing and assisting clients through the process. The local company had many loyal clients of 20+ years. The main complaint during feedback was disinterest in working with a large, national company.
Professionalism (++)
While both companies were nationally accredited by TCIA, this was still the largest area of improvement. The national company provided many resources that a smaller local company did not have. These resources were a tremendous help especially with sales and specifically with Plant Health Care applications and knowledge.
Safety / Injuries / Damages (E)
I would say the focus on safety was about the same. While the national company had resources for Plant Health Care and sales, I didn’t really feel they had an improved grasp on safety, training and the reduction of incidents, injuries and damages.
Customer Service (+)
The level of customer service definitely improved primarily due to the existing office and sales staff, but also because the size of the local company was reduced greatly.
Crew Talent (E)
The crew was exactly the same, with no additional input.
Quality of Work (E)
The crew was exactly the same, so the quality remained the same.
Internal Processes (+)
I would say the internal processes for handling hiring, training, development, scheduling and general operations were very different but improved a bit. Larger (and national) companies tend to over complicate some policies to avoid liabilities, but it was mostly streamlined and understandable.
Ease of Working with Purchasing Company (- -)
While the larger national company brought in many resources, their openness for improvement was HIGHLY lacking. This was my first experience with a company that had no interest in being better. Complacency reigned supreme. This issue eventually led me to leave the business. I could not tell if it was ignorance, elitism or just laziness, but there was no interest in change. Before leaving, I had a list of 100 things (yes, 100) that I would implement immediately to improve. The response I received was that I had tons of great ideas, but that it would take 2 years to get anything done here, so don’t bother.
*I will point out that many of the managers were older at this time and had NO interest in rocking the boat. Things may be different now, but this caused me to leave. I will also point out that I did enjoy working with my regional manager. I felt the issue was with the company philosophy, not him personally.
Overall Summary of Experience
Honestly, I think the first 2 years went somewhat as planned or expected. I think the issue became that “OK” became the norm. Providing an average experience with average service became the standard. The company being purchased had youth, passion and a willingness to be better. The purchasing company was just too engrained with “that’s how we do have always done it”.
Last comment from The BIG Oak = I truly believe this merger could have been much more effective with a different attitude from upper management. I found it inexcusable to operate at this high level of resistance for improving a company. I am a highly driven, passionate, influential person constantly striving to improve. I absolutely love trees and absolutely love business. This company wore me down to the point I lost interest in trees and myself. After a rebirth of passion, this interaction with a larger national company to start my own business using what I have learned.