For two years, Dan McBride looked for his little niche in the business world.
A couple of years ago, we brought you the tale of Dan, then 36. A freshly minted MBA with a background in sales and marketing in the manufacturing arena, McBride had a modest inheritance from his late father, a longtime Cleveland-area entrepreneur. He was determined to find a good little company to purchase and operate — at the right price.
McBride had an office downtown, a lawyer and an accountant to provide advice and point him to business brokers, and off he went, kicking the tires at dozens of companies.
Still, it almost didn’t happen. After looking over more than 100 companies, from those too sick to consider to those he couldn’t afford — and unsuccessfully trying to buy about a half-dozen — McBride was beginning to waver. Finally, in recent months, he found just the right thing: a 10-year-old company in Aurora, Martin Morrissey Inc., that makes stretch film products used in industrial packing.
In the end, after looking somewhat far afield, McBride landed close to where he began, purchasing a company from a man who once worked for his father and had since become a friend of the family.
“There are so many ways to find a business. And I guess I found it the most successful way: by contacting (those) I knew,” he says.
At first, he avoided considering Martin-Morrissey out of a concern for mixing friendship and business, and because the company wasn’t really for sale at the time.
“Eventually, I said, ‘Hey, I just need to ask.’”
Still, he nearly ran out of time.
“I was already beginning to investigate Plan B and look for a job,” he confesses. “It had been two years and two months. We got it right down to the wire.”
His wife was getting antsy. And he wasn’t so happy himself about two years of lost earnings slowly eating into his nest egg. He was beginning to rack up serious bills for legal and accounting advice.
“I probably spent $30,000 to $40,000 on due diligence at first,” he says, before gradually learning to perform much of that work himself, including by using the Internet.
Each time a deal fell apart, he grew increasingly frustrated.
“You get so far on a deal, and then it falls apart and you’re back at square one. And you have to make sure you weren’t too eager to do a deal.”
One of the negotiations that broke off, was for the very company he eventually purchased. The first time around, he and then-owner Bob Jackson couldn’t close the gap on purchase price.
“We went to the altar once, and it fell apart,” McBride recalls.
Months later, with Jackson nearing 65 and apparently growing eager to make his exit from day-to-day operations, the two sides got back together and struck an agreement. (McBride declines to disclose the purchase price, but he originally told SBN that he was prepared to spend up to $1 million in his own equity and other financing for the right opportunity).
The company, with about a dozen permanent employees, operates on three shifts, four days a week. McBride hopes to use it as a platform on which to add other manufacturing companies.
McBride’s attorney recently told him that putting his long search behind him has been good for his client’s mental state.
“He says I look relaxed, that I don’t have that look of angst on my face anymore.”
And his wife? Once concerned about the extended income drought, her worries have done an about-face, according to her husband.
“Now she gives me a hard time cause I’m not home enough.”
The ones that got away
Dan McBride’s search for an acquisition turned out largely as he might have originally envisioned, but for the longer time frame than he’d initially expected. Art Weisman’s search for a company to buy ended quite differently.
Last fall, the former Big Six accountant — whose family operated a closely-held furniture business for years before liquidating it — joined Everen Securities’ Cleveland office, ending his year-long search for a company to purchase and operate.
What did he learn during that year?
“I learned that it’s tough to be a buyer out there. Prices are too high; expectations [of sellers] are too high. Some [companies] I looked at were troubled, and for those that weren’t, the price was too high.”
But he also came away with a deeper self-understanding. He came to appreciate how much he prized “the importance of family, and of the balance between work and family.” During his search, he met owners who were “consumed” by their business, he says.
“And that’s fine, as long as the passion is there; the passion has to be there first. I just didn’t have the passion.”
But working in the securities industry alongside his cousin, a 35-year veteran of the business whom he considers a mentor of sorts, he insists that his new line of work will merely be an alternate form of entrepreneurism. Recalling the advice of another cousin, sales guru Hal Becker, who counseled caution before taking on the responsibility of meeting a payroll for an entire staff of employees, he says, “it’s certainly cheaper to start your own business than to buy one.”