By Scott Bushkie
I just met with a business leader who’s starting to explore his options around selling part of his company. Based here in Northeast Wisconsin, this business is considered an industry leader, well within the top five in its market throughout the U.S.
Because of the company’s size and success, finding a buyer won’t be the tough part. It’s finding the right fit and negotiating for the best terms that will add complexity.
Because this will likely be a recapitalization (the sellers will retain partial equity under a planned exit strategy), some company shareholders will continue working with the buyers for several years to come.
So it’s especially important for this company to work with a mergers and acquisitions team who not only knows the active private equity firms in this market but also understands their “MO.” The management team needs assurances that they’ll find an ethical buyer who is a good cultural fit for the organization and can help take it to the ‘next level’ of success.
This executive is one heck of a smart guy, and we had a great conversation, talking about buyer issues, company goals, and the potential sale process. As we were wrapping up, I asked him for his impressions of my firm and any hesitations he might have over working with us.
He had nothing negative to say, but he still wasn’t sure a firm like Cornerstone was the right fit. Why? Because his board felt a company their size ought to be working with a firm out of Chicago.
That’s certainly not the first time I’ve heard that. Cornerstone has the same challenges as many other professional service firms in our region—any of us could offer the best service in the world but because we’re from Green Bay, Manitowoc, Wausau, or the like, we’re perceived as somewhat less capable.
I’ve had this discussion with other professionals, from lawyers to marketing firms and financial consultants. We’ve all bumped up against potential clients who believe they have to go to the big cities to get the best talent. That’s hard, especially when you know, with conviction, can do a great job.
After all, Chicago is like most cities. There are great firms and there are not so great ones. There are ones who will treat you like a star client and ones who’ll judge you based on where YOU come from.
Ironically, one of the most successful people in the country comes from a relatively modest-sized community. Ranking number three among the world’s richest people, Warren Buffet built his career from his boyhood hometown of Omaha, Nebraska, a city smaller than Milwaukee.
And let’s not forget the Green Bay Packers. One of the winningest teams in the NFL and arguably one of the most recognized around the world, the Packers, of course, hail from the smallest city of any pro sports team. They’ve clearly overcome any negative small city perceptions.
At the end of the day, no matter what you’re buying, what you really need is confidence that your advisor can and will do what they say they’re going to do. Sometimes, the price of that confidence is a big city address. I understand.
It’s an issue every entrepreneur has to grapple with. You have to look at where you want to be located, not only in regard to cost, talent, and customer base, but also in terms of customer perceptions. Will you get more business in Chicago over Green Bay? Maybe. But is the upgrade in perception worth the tradeoff in your quality of life?
I moved to Green Bay in 1998 to get into this industry. A few years later, I had every opportunity to return to Milwaukee and do what I do. But I had met so many great people in Green Bay, and it was a great place to live. Life, in many ways, was bigger here.
Now this is where I’m raising my family and where I’ve chosen to build my business. It’s home. And I wouldn’t trade it for any extra measure of success.