#250: From a Burnt Down Building to a Multi-Million Dollar Sale to Private Equity [Part 2: The Exit Story]

In part two of our two-part series, Dave Hoeffel shares the mental and emotional impact of business ownership and what it took for him to get out of a vicious cycle to achieve the vision he had for his business and life… and why he decided to sell to private equity at the end of 2020.

We dive into the value of having proper knowledge of how entrepreneurship works, the benefits of a mentor, KPIs, the repercussions of not understanding your financials (normalized EBITDA, working capital, and more), and how to create a relationship with your business that can change your life and create a better future. More importantly, we’re going to address a topic not often discussed by business owners: anxiety and how to deal with it.

What You Will Learn In Today's Podcast Interview

Why going through the Arkona Intentional Growth™ Boot Camp and knowing what he wanted from the business allowed Dave to quickly vet the out-of-the-blue offer and decide to sell
How a banana led Dave to realize he needed a better handle on his chaos
Making money isn’t a linear trip
How, despite losing money, Dave had a positive normalized EBITDA
The true value of long-term, dedicated and loyal employees, even as they approach or
pass retirement age
How a different management structure spurred fresh growth in his business
When not to follow your metrics to the T
How solving problems for the long-term and holding people accountable creates wealth
The dramatic value EOS© (Traction) brought to Dave’s business and how it transformed
his team
How to shift your perspective so you can imagine, and therefore build, a better life
What not identifying and monitoring your top KPIs costs you
When you should start the hiring process—whether or not you have the capital ready
Why business owners take out loans for personal items like boats instead of using cash
they have saved up
The best reasons to join a peer group and what you can expect to achieve after
How to measure talent to help you decide on succession plans for employees
Why it’s crucial that you and those you get advice from understand working capital
When and why you need to be open to self-improvement and change in order to achieve
your goals

Are You Growing The Value of Your Business

Take The 2-Minute Assessment To Get Your Intentional Growth Score™ And 1-Page Vision Board.

Are your company's current initiatives intentionally designed to increase the value of the business?
Do you know what you want from your business long term and why?
Do you know what your company is worth?
Do you know the differences between Management, Family Transitions, PE Firms, ESOPs and Strategic Buyers?
Does the business have a written strategic plan on how to achieve the desired normalized EBITDA and valuation?

About the Guest:

Dave Hoeffel is part of the Polytek Development Corporation and the founder and former owner of Endurance Technologies.

Quotes:

04:48 - “I knew I needed to replace her, but I didn’t want her knowledge to go to somebody else who could leave me. That’s your biggest fear as a business owner.” – Dave Hoeffel

06:32 - “Sometimes traction is run so pure that she doesn’t belong because she isn’t a decision-maker.” – Dave Hoeffel

08:30 - “Life could actually be better than this. How would that be possible?” – Dave Hoeffel

13:23 - “When we solve a problem, we want to solve it forever.” – Dave Hoeffel

15:08 - “Hey, I had a panic attack about this. Is it okay?” – Dave Hoeffel

19:08 - “EOS doesn’t find sales.” – Dave Hoeffel

20:07 - “I started to recognize we were going to be making money. That’s when my mindset changed.” – Dave Hoeffel

23:44 - “Without the capacity to produce the product, we couldn’t keep up.” – Dave Hoeffel

25: 55 - “My perspective early in business—maybe a bad one-was if I reach out to someone else, it shows weakness in my ability to run the company.” – Dave Hoeffel

26:46 - “Insecure business owners are the most successful, if they fix it.” – Dave Hoeffel

31:05 - “Family businesses, I believe really strongly in them. I believe less strongly in them now than I did 10 years ago.” – Dave Hoeffel

34:21 - “In those early years, my EBITDA was all depreciation, amortization, all those things I can’t spend and are just getting sucked out.” – Dave Hoeffel

43:39 - “Success comes from hard work and suffering and that’s what I believe. I mean, that’s how I got everything.” – Dave Hoeffel

47:54 - “We as entrepreneurs always believe that making a million dollars today is better than getting a million dollars in our checking account because I can do this for 10 years and still sell it.” – Dave Hoeffel

56:00 - “With the numbers they were talking about, my family was good. It put all of it onto who I was as a human being and how I was going to treat others. And that’s what reflection did to me.” – Dave Hoeffel

57:52 - “It came with pain.” – Dave Hoeffel

62:02 - “If you don’t buy me now, I’m not for sale for six months and my number will be bigger and I’m going to take it to auction.” – Dave Hoeffel

65:00 - “What I’ve learned is that you can do it smooth. You can [sell your company] with care for the company and care for the employees.” – Dave Hoeffel

68:15 - “With the end in mind, the next business I buy, I’m going to know if we’re going to sell it or keep it or how [to] transition it to whoever my partners are.” – Dave Hoeffel