As he was looking into selling Insight Publications, Publisher Brian Rasmussen had a lot to think about. Given his age, energy level, and a sense that, given the nature of his business, he wasn't going to be able to just exit and be free from his responsibilities, had to look at what kind of company he and his staff, as well as the community, wanted to work with.
As a business publication in Northeast Wisconsin, he knew the community with which he worked would be concerned about the buyer's integrity. He also wanted to be sure the buyer would have the best interest of his staff in mind so he could look into their eyes and say, this is a good deal for you, too.
Rasmussen, speaking at the Milwaukee Smart Business Dealmakers Conference, says the buyer he ultimately went with had approached the company years before about a sale, so he knew a little bit about what they were looking for and what the offer might look like. While he had a number of questions for the buyer, he chose to work through his deal team to ask them. He wanted to know how the buyer would view the growth of his company moving forward, what his role would be, and whether he would still have the freedom to continue to run the business as he had run it before. But a key question he had was about the earn out.
"The earn out was going to be based on profitability," he says. "And as a business owner looking at it and saying, we need to ask about whether or not they can give us a different option. Can it be on just top line sales because I can affect top line sales. And I think I know what top line sales can be. If it's strictly on profitability, how do I know that there aren't going to be circumstances that they can then alter or add to the expense side of things that would then decrease profitability and thus create a negative impact on my earn out. So, by going through that, and having them come back with those answers, it gave me a real good feeling as to how they approached business and how they approached even my ability to be on that team during that or not."
He says he's always felt the full responsibility of the business and for providing for his employees. That didn't stop when he went through the sales process.
"The weight of all that is on you, besides the weight of making sure that I am going to get out of this sale what I'm looking for financially, but also the fact that where am I going to move forward next?" he says. "And so understanding where that owner was coming from, asking those questions about the earn out, asking those questions about where are they going to take the business, are they going to cut employees. I have a sister who's in the business who's on the administrative side. And when companies come together, there's certain positions that are duplicated. And now, do I find her out on the street and not a part of the business moving forward? There's a lot of that emotional thing that you're burdened with as you're thinking about where things are going to go. So, asking those questions, or in our case here having a team to be able to make sure the right questions were asked, was a big help for me."
Rasmussen says he had the business in sale preparation mode for quite a bit of time. He would work with his team to try to understand the value of the business and what could be done to increase it. That helped him feel ready to sell when the time came.
"It was really focusing on some of those key things that a potential buyer would look at," he says. "In our case with a business publication, we shored up our website, we shored up the digital opportunities, which a lot of things are going from print to digital. We shored up the events and started to, even though we came out of COVID, we put new things on board and somebody looked at it and said, well, you couldn't control COVID, but you sure as heck could control what you're doing here now moving forward."