Gregory J. Skoda is a prolific dealmaker.
Beginning in 1996 — when he co-founded CBIZ with billionaires Michael DeGroote and Wayne Huizenga — Skoda embarked on a path that made him one of the most accomplished dealmakers in Northeast Ohio.
As executive vice president of CBIZ, Skoda and his team researched more than 2,000 companies and completed an astonishing 135 acquisitions in a span of two years. Close to burnout, Skoda left CBIZ in December 1998 to relax and recharge.
But by 2001, he was ready to get back to work. He launched Skoda Minotti and has grown the private CPA firm to 300 employees with a wide range of services to individuals, businesses and nonprofit organizations.
Of course, there were plenty more acquisitions along the way. On some of the deals, he is a consultant. For others, he is the buyer.
Skoda talks about what he learned from more than 200 of his own acquisitions (and hundreds more for clients), how he approaches risk taking and why business owners need to be thoughtful when they head down the M&A path.
In the beginning, we’re successful business guys and they’re telling us, ‘You guys are kindergartners, you don’t understand this process. ’We really learned and developed skills around how to find what we’re looking for, how to read people, how to negotiate a transaction, how to marry the strong points for a buyer and a seller and how to architect and craft a win-win transaction.
The repetition of doing this thousands of times really makes all the difference. It’s the ability at the front end of a transaction to be able to see pretty clearly what the end could look like or the ways it could look and trying to architect a path to get there where everybody walks away from the table with a smile on their face.
It really was a 24/7/365 experience. There were the 2 o’clock, 3 o’clock and 4 o’clock in the morning phone calls. When you’re in an environment where you’re rapidly growing by way of acquisition, the amount of data that you have to deal with and the amount of people that you have to deal with can be daunting at times.
The Art of the Deal
It really takes the right people to input, control and manage the data and the people. It takes regular interaction multiple times a day with the teams involved so that everyone knows what’s going on. You need to stay in front of it. And what you’re in front of at 8 o’clock in the morning, if you’re not really working at it, by noon, you’re behind when you’re working at that volume. There is an over communication that is necessary.
You can never think you know all there is to know. You’re going to get taught a lesson the moment you think you know everything there is to know. There always has to be this appreciation that there is something here that is going on. I don’t know what it is and I have to figure it out. If you can keep that intellectual curiosity in working through transactions, you’re going to be more successful.
We all balance risks in a different way. I’ve had clients say, ‘I’m never going to expose myself to more than a 10 percent risk of what I have today. If I lost 10 percent of what I have today, I’m OK.’ Other clients have a very different approach. ‘No, no. It’s all in. I’d rather owe the bank tens of millions of dollars than $1 million because they’re not going to throw me out if I owe tens of millions of dollars. They’re going to work with me.’ There are some clients who can’t sleep at night that way.
People need to be mindful of the risks when they are walking into a deal. Where we have a real advantage in working with folks is we’ve been there and done that. We’ve been able to work with people and say is that really what you want to do? You want to sell your business. Really? Why do you want to sell it? There is a risk in selling your business. You’ve got a pile of money on the other side of that. Let’s say the business is gone. What are you going to do tomorrow morning when you wake up? If you don’t have a plan and you don’t have a thought and you’re just going to go figure it out, more of those people have a miserable life and say they never would have done it.
The Last Word
You’re going to change as a business owner, so be thoughtful about the journey you’re embarking on. Are you beginning down an M&A process with the end in mind? Or is this the beginning of a journey and you don’t know where it’s going to take you? Those are two very different paths in the M&A space. Either way, they are going to be evolutionary and you’re going to change.
How to reach: Skoda Minotti, https://skodaminotti.com/