Ed Weinfurtner is a dealmaker who likes to get his hands dirty. If the company is being marketed for sale or has a pitch book, he’s not interested.
“I’m trying to find a diamond in the rough,” says Weinfurtner, managing partner at Blue Olive Partners LLC. “It could be a company that is losing money and is in bad shape. We’ll try to understand what the opportunity is and if we can help. We’re out there talking to people, listening and trying to come up with scenarios where we can help create situations where everybody wins.”
When Weinfurtner acquired Great Day Improvements five years ago, the company was doing OK, but had made some missteps, he says. Weinfurtner evaluated the situation and focused on process improvements to boost customer satisfaction. The company has doubled in size and is now ranked one of the top 25 largest residential remodeling companies in the U.S., overseeing the Patio Enclosures and Stanek Windows brands.
We spoke with Weinfurtner about his hands-on approach to dealmaking and his willingness to do whatever it takes to make his investment worthwhile.
Have an open mind
Weinfurtner has been an owner, an investor and an operator in numerous privately held businesses over the years. The list includes Gateway Megatech Corp., Maverick Electronics, Alliance Metals and Mega Techway Inc., just to name a few companies he has touched in his career. At each stop, he evaluated the situation and identified a way in which he could help the company perform better.
“I go in with a mindset, maybe there’s an opportunity for an acquisition here,” Weinfurtner says. “If there’s not, maybe they need money, so I can be an investor and sit on the board. In one case — this was eight or 10 years ago — the company needed an interim CEO. I stepped in for a year and a half and helped things get done and then we brought in a guy to replace me. My approach is entrepreneurial.”
Business owners who are looking to sell in today’s market often follow a structured process that gets multiple people involved in order to maximize the value for the seller, Weinfurtner says. He’d rather do this preliminary work himself.
“That involves a lot of keeping in touch with people and working an active network of people that are exposed to business,” he says. “Having been an operating guy for a lot of years, it’s not like we have 20 investments. It will be one or two, maybe three at any given time.”
It’s not about volume for Weinfurtner. It’s about finding opportunities where he can make a big difference in the companies he invests in.
“You can financially engineer companies and make them look better,” Weinfurtner says. “Our perspective is how do you operate better?”
See all the angles
An investment opportunity is best viewed through the prism of four perspectives: Owners, investors, employees and customers.
“When we see companies that are troubled, often it’s because one of those groups isn’t winning or succeeding,” Weinfurtner says. “Maybe the owner is doing fine, but he’s not doing a good job taking care of his people or his customers. There are cases where the customers are benefitting, but the company is not making money. They aren’t charging appropriately for services. Maybe ownership is taking lots of chips off the table and not reinvesting in areas that need more investment. All the stakeholder groups have to benefit. We see situations where there is an imbalance and that’s often a situation where we can help.”
Successful investors evaluate situations and use the knowledge gained to honestly assess the quality of the opportunity.
“You have to be able to define the down side,” he says. “What’s the worst that could happen? You have to come to terms with that going in. If you know this investment is high-risk and you could lose everything you put into it, you have to be realistic about that and be able to live with it or you don’t do the investment.”
Conversely, the excitement of a new investor and new growth opportunities can often lead to unrealistic expectations on the positive side of the spectrum.
“You get enamored with the story and the upside,” Weinfurtner says. “Be prepared for the worst, work to get the best. And know that whatever the plan is, it’s not a straight line. You have to be creative, adaptive and be prepared for setbacks. That just involves thinking through all the potential outcomes. You plan as hard as you can to have all your contingencies set, but you just don’t know. Business, by definition, is messy.”
Find people you can trust
Finally, look for people who you can believe in and trust, people that care about the business and are willing to work hard.
“You have to have people who you trust to tell you not only what they want you to know, but what you need to know,” he says. “You need people who aren’t afraid to say, ‘Here are the problems and we need help.’ If things go wrong and you didn’t see it coming, that’s when you have the biggest problem.”
Ideally, each investment Weinfurtner makes will play out as Great Day Improvements has.
“At Great Day, the team is strong and running and they need me less every day,” he says. “They know if there is a need, I know enough to come in and be helpful as opposed to the guy who is looking over their shoulders.”
They also know Weinfurtner is always eager to lend a hand.
“I don’t feel right unless I’m carrying my weight in some regard,” he says.