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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 Andrew Tellijohn
August - September 2011

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Today’s question

Beth Ewen,
Upsize:

bewen@upsizemag.com
dev.divistack.com

Today’s question
by Beth Ewen

IN FEBRUARY 2011 Compellent Technologies sold to Dell for $906 million, the second stunning success in a row for CEO Phil Soran and partners. That was the same Soran whom Upsize featured on its cover in February 2003, when the company was little more than an idea.

This story illustrates:

A. The brilliance and foresight of the editor of Upsize.

B. The reason why nothing attracts attention and financing like a track record of success, to the frustration of so many owners who struggle to gain capital and interest the first time around.

C. An increase in mergers and acquisitions activity, which prompted Upsize to prepare this issue’s comprehensive guide to buying and selling a business.

If you answered A, thanks Mom. If you answered B or C, this issue’s cover story and accompanying m&a guide is for you. We talked to business owners who have bought or sold their companies recently.

Then we asked local accountants, attorneys and bankers who spend lots of time working with owners of privately held companies to buy and sell. While the giant deals like Soran’s at Compellent may grab the headlines, many more smaller deals come together out of the spotlight. We want to show business owners how to execute such deals successfully.

To wit: Sellers shouldn’t “wear the money” before the deal is done, as m&a experts like to say. Once business owners commit to selling, they often start dreaming of their new lifestyle and over-commit to a transaction or take their eye off company operations.

For buyers, thorough due diligence is a must. First-time buyers can take a cue from professional and institutional firms, who routinely deploy teams of experts to dig into customer lists, financial practices, outstanding liabilities, management depth and more crucial topics.

Our guide includes plenty about numbers, taxes, structure and details, but the heart of this issue is the fact that emotions play an enormous role when it comes time for a business owner to sell a company. Setting Soran and super-entrepreneurs like him aside, most owners sell their baby only once in a lifetime.

“Your company-they’re almost like children. You nurture them along. You take them to these levels and then you have to trust someone else to take care of them for you,” says Warren Stock, who sold his roofing company years ago and then bought back Central Roofing earlier this year.

Maslon attorney Shawn McIntee puts it this way: “I think sellers need to be prepared for a very long, emotional process. It’s very personal for a lot of these businesses. It’s a process not to be taken lightly.”

Use this guide, and watch for the expanded online edition coming in September, whether buying or selling, on the scale of Soran or Stock, crunching the numbers or handling the psyche.