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Sweet marketing music

Tanner Montague came to town from Seattle having never owned his own music venue before. He’s a musician himself, so he has a pretty good sense of good music, but he also wandered into a crowded music scene filled with concert venues large and small.But the owner of Green Room thinks he found a void in the market. It’s lacking, he says, in places serving between 200 and 500 people, a sweet spot he thinks could be a draw for both some national acts not quite big enough yet for arena gigs and local acts looking for a launching pad.“I felt that size would do well in the city to offer more options,” he says. “My goal was to A, bring another option for national acts but then, B, have a great spot for local bands to start.”Right or wrong, something seems to be working, he says. He’s got a full calendar of concerts booked out several months. How did he, as a newcomer to the market in an industry filled with competition, get the attention of the local concertgoer?

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by Beth Ewen
April - May 2013

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[big time]

I heard from Steve McFarland the other day, just about a year after I talked with him last. At that time he had sold the company he founded, Orbit Systems, to mindSHIFT Technologies, and detailed what he said he learned in the transaction process—equivalent to an MBA.

10 months later, mindSHIFT was in turn acquired by giant electronics retailer Best Buy, and that’s when McFarland decided his days were numbered. “I stuck it out for about six months and decided it wasn’t for me (a decision made easier by the fact that the Best Buy transaction was all cash)” he wrote.

Now he’s working with a $30 million transportation company in Hudson, Wisconsin, that’s expanding into Minnesota and opening an office in Lake Elmo—this despite “all things Dayton,” McFarland wrote, meaning the tax increases Gov. Dayton has proposed that are causing so many business owners to vow they’ll move business across the state line. (To which I scoff: Oh, you’ll just spend all the money you think you’ll be saving on gas to get there. As I learned when living  in a low-tax, low-service state, Arkansas, Minnesota business owners should be grateful for services here and willing to support them. But I digress.)

McFarland’s story strikes me as the perfect example of the significant mergers and acquisitions activity by smaller companies that most publications, but of course not Upsize, ignore. These aren’t the mega-deals, from Heinz to Caribou to Twinkies that dominate the headlines. Rather, a brisk amount of activity is fueling new careers and “second bites of the apple,” to use an m&a term, for lots of business owners like McFarland.

Patricia May is one of those. She’s proud and perhaps a bit amazed that her company, Tembua, a language translation firm, was able to purchase an Oregon firm for a mere 2.5 times revenue—a bargain, she figures, because the newly acquired firm has established customers in the hot med-tech and biotech sector.

May is one of those delightful business owners who can laugh at herself, and she poked fun at her image as a major wheeler-dealer when I called her to ask about the purchase. At the office these days they like to talk about completing their FIRST acquisition, she says with a laugh, indicating it’s merely one in a long line to come. She’s joking, but the respect she’s getting from customers and vendors is real.

Another business owner I called, LynMarie Winninger, is an experienced acquirer of businesses, having completed two acquisitions to form her company, Ascendancy Research. I’ll have a full story about her in an issue to come, but introduce her here to illustrate our coverage of small-business m&a.

When she bought two market research firms, she decided to completely overhaul the companies, even though they had established customer lists. To her, it was more important to wow customers with her new vision for the company, rather than maintain continuity. It was a risk that paid off, she says.

How to get your own piece of the action? We’ve talked to attorneys, accountants and investment bankers to assemble their best advice for small-business owners looking to buy or sell their company. It doesn’t seem right that only the big firms get to play.

 

Beth Ewen

Editor and co-founder

Upsize Minnesota

bewen@upsizemag.com