Connecting local businesses ready to exit with buyers ready to start
Who the hell are you anyway?
Hi. No need to be so rude. We’re Dan and Chris. We met at Sigstr, a tech company where Chris led engineering and Dan was the founder. We’ve been involved in lots of businesses from recruiting and tech to media and mulch.
More to the point, we’re Indianapolis-based folks interested in helping owners of small ($100k-$2m EBITDA) local businesses find successful exits.
Why are you doing this?
Small, non-tech businesses are overlooked and underserved when it comes time to exit. Most owners don’t know what options exist or where to turn for help. And there’s a lot of ‘em…over 31 million total with 12 million small businesses owned by the baby boomer generation (source: Small Business Administration). But when we went looking for one to buy, we heard nothing but crickets.
It turns out there is also a rising tide of hopeful new entrepreneurs looking to become owners.
We can’t think of any more meaningful work than connecting these two groups, so each can start their next journey.
Are you a broker?
Label us as you like, but we don’t really fit the broker mold. We are also not CPA’s, bankers, or lawyers. Those folks are important, and we point you in the right direction if you don’t already have trusted local advisors. If you’re not quite ready to sell but are looking to prepare your business for an exit, we have some good friends to help there too.
In short, we intro you to buyers when the time is right, but we know lots of good, smart people who can help along the way if needed.
How does Ei make money?
Sellers of small businesses pay Ei 1% of the sales price if we made the intro to the buyer of the business. We don’t get paid anything unless we make that intro and your deal gets done. As we grow, we might discover other opportunities to make an impact.
Does Ei charge a retainer or require an exclusive?
Nope. You’ve invested a good chunk of life into your business. We are here to help, but we don’t want to limit your options!
What types of companies can Ei help?
Most of our sellers are
- Located in central Indiana
- $100k-$1m in EBITDA or SDE
- Traditional, non-tech Industries
While many Ei deals fit these criteria, we’ve worked with companies of many types. Give us a shout, and if we can’t help directly we’ll try to point you in the right direction.
Questions about you
What’s my business worth?
That’s the million dollar question…or maybe lots more depending on what you’ve built. There is as much art as science behind valuations and no shortage of opinions on the best method. Most use EBITDA or seller’s discretionary earnings (SDE) as the starting point. Many businesses we serve see multiples of 2-6x. So if your biz does $500k in EBITDA and you get a 4x multiple, you sell for $2m.
There are tons of variables…Do you have physical assets or real estate included? Are you growing? Do you have recurring, predictable revenue? We’ll curate a list of the best valuation resources on our blog. Let us know if you find something helpful, and we’ll share it with our community.
Who might buy my business?
Most of the companies we help are too small for private equity or institutional investors. One key question is whether you have identified an operator to manage / run your business or whether the buyer will need to bring the operator. There are lots of potential buyers including:
- Owner / operators
- Other companies
- Search funds
- Holding companies
- Family offices
- Your own employees (ESOP)
Do I have to Sell the Whole Company?
Heck no! Let’s say you want to send your daughter to college. Or you want to take a few chips off the table but keep running your company. Maybe you want to sell the majority of your business to a new operator but keep 20% of the equity and distributions. It’s your business. There are lots of options. It starts with your goals.
What are the top reasons small business acquisitions fail?
Relationships is #1. It’s a lot like recruiting. If an employee and the hiring manager don’t respect and trust each other, it won’t work. Exits are not black and white. There is a lot of give and take. If the buyer and seller are talking about their kids, shared hobbies, and favorite St Elmo’s menu item, you’re on the right track.
Valuation gap is a close 2nd. It’s always productive for the two sides to ballpark things early to see whether a deeper dive and time commitment makes sense.
There are a host of other reasons from market conditions, changes in the business, to financing. But many of them can be overcome if the people on each side of the table like one another.