Case Study: The Case of the Unplugged Plug Business

The Situation

A sole proprietor who employed one on-call worker wanted to sell his business to move to Florida with his girlfriend.  The owner had developed an extremely specialized niche market repairing a certain type of critical plugs; in fact, there were only a handful of people in the United States who could provide the service he provided, primarily to municipalities and secondarily to manufacturing companies.

As far as small businesses go, this one seemed to have all the right stuff:

  • A customer base that included customers that “big guy” prospective buyers had been trying to get into for years.
  • An exclusive service offering and a national reputation for being THE ONE to turn to for problems with the a wide range of ancient, old and new plug designs and their systems.
  • A generous profit margin.
  • A cool name with great, nationwide recognition.

His girlfriend was confident that this business would sell in a heartbeat; she wanted it “done” so he could join her in Florida.

The Problem

The problem was three-fold:  (1) The owner didn’t really want to sell the business, but he did want to move to Florida.  He had reached the point where the wear and tear on his body had reached a critical point; he couldn’t really continue to do the work much longer.  (2) The related-industry buyers who would pay a good price to buy the business to gain entrance into his clients knew that if they bought the business and couldn’t do the work when they got there, they would lose the customers and probably never get in again.  They would be completely dependent on the (Clint Eastwood-type) owner to train their employees (the on-call worker did not have troubleshooting knowledge or skills).

(3) Finally, and most importantly, the value of the business was not what the owner needed it to be.  The location of the business in the home, the lack of any documentation of systems or processes, weak financial documentation, no retainable skilled employees, and the Lone Ranger nature of the owner all contributed to the weak business value.

The Solution

The Exit Eagle created a plan for developing videos and troubleshooting documentation that captured the owner’s expertise.  This training package would be available by subscription on-line via a redesigned website, and supplemented by custom real-time online and on-site consulting.  The training packages would be offered to customers to train their maintenance staff, and to related-industry companies that wanted entrance into the customer base.  This business would be run from Florida, with his girlfriend managing the business component.  After the value had increased to meet the owner’s need, the business would be sold.

The couple moved to Florida and executed the plan.