Dawn Fuchs Coleman’s family never put the company her father founded in 1981 up for sale. They had been approached by venture capital and angel investors over the years, but weren’t interested. But when Weavertown Environment Group was approached by a strategic buyer who could help it continue to grow, a door was opened.
Fuchs Coleman wasn’t sure if the next generation, which was still young, was interested in running the company. She also knew the environmental services company couldn’t continue to self-finance, since it was already putting $2.5 million back into the business every year.
“I had an uncle that had a very successful family business in the second mortgage lending space,” she says. “He had an offer to sell his business. He turned it down, and years later, I think he always regretted it. So, I had that in the back of my mind, too.
“You can’t be naive and you can’t be ignorant. You’ve got to be willing to hear it. If it feels right, listen; don’t just stop and say, ‘I’m not interested.’ You have to be open-minded.”
After ninth months of discussions, the family sold the company to Univar in 2015. Fuchs Coleman stayed on for two years, and then she exited the business, starting her own consulting business We Guide, You Grow, and writing a business book that should be out in six months or less.
Smart Business Dealmakers talked with her about selling her family business and the journey from executive to coach and investor.
How did you help Weavertown get a strong value?
You have to grow your business, not just top line. You need to improve your bottom line results. I spent a lot of time on bottom line. How can you streamline your business? I believe in lean and mean.
Health and safety are paramount in our organization, so that was important to me, and making sure people are well cared for and well treated. Family businesses are about the people.
Were you happy with the price?
I’m not going to say we had the best value ever. Obviously, we were OK with it because we did sell. What was nice is we didn’t sell under a hardship time. It’s not like we sold in a bad economy. It’s not like we sold when our chips were down.
Everybody probably wants more than what they get. I’ll say that upfront. It’s like trying to sell your house, right? You know what you put into your house, but the buyer coming through might not appreciate your wall selection, your floor materials, your roof, things that you put in.
How did you announce the sale?
Nobody knew we were selling our business, or even thinking about selling. We kept it very private. Very few people knew — the only people that knew, were the people that had to work with the transaction itself. It was under strict confidentiality because I honestly didn’t care if the business got sold or not. I loved what I did.
I think that is a problem for people. Loose lips sink ships and people should stay tight to the vest. So, we did all of our work at night, weekends. During the day, nobody could tell anything was different.
To announce the sale, I rented a room in a hotel. Because we closed Dec. 1, we were going to have our projections for the ’16 calendar year. If something fell through, my plan was to have our company meeting. Our deal did close that day. So, it was announced publicly to everybody at the same time. That was important to me. I wanted everybody to hear it firsthand. I didn’t want it to be in a press release.
Some people thought it was a good thing, and others saw it as not such a great thing.
Was it hard to become an employee for two years in your family’s company?
I looked at it very black and white. When you sell something, you become an employee. I recognized I was an employee, even when I was still the head of our operations, so to speak.
I didn’t really feel a change year one. Year two, I began to notice some changes and, again, I kept it in mind that that was their company then. I was no longer the decision-maker.
Beyond starting to consult and write your book, what else happened post-sale?
When you sell your business, you have new things to think about. Somebody gave me a piece of advice — don’t go into any other deals for a few years, think about it. Because your phone’s going to ring off the hook. There’s a lot of deals. There’s a lot of people that want you to invest in other companies.
I think that’s good advice. I didn’t necessarily take that advice. I did make investments in other companies, and they’re doing well. But I do think, taking the time to digest is worthwhile.
There’s a whole after process — what you do with the funds and how you manage your funds and who you select to manage them for you. I think that’s all very important.
Why is dealmaking and active investing so different?
When you think about deals, the risk is you’re not in charge, right? Unless you’re the largest shareholder or you’re on the board, you’re really just an investor. You want to make sure that you believe in who you’re investing with and do your due diligence.
Somebody said to me, ‘I look at it as black or red. It’s either going to hit or it’s not.’ That’s probably not a bad way to look at it, and if you aren’t willing to lose what you’re going to put in a deal, then you probably shouldn’t go to the dance. Stay on the sidelines.
And then, there’s personal relationships. You have to think about that, too. How are you going to feel about the personal relationship if financially you took a hit? You can’t let that personal relationship be impacted because it’s still something you chose to do.
That goes to transparency and being truthful. You have to be able to look yourself in the mirror and say, ‘That’s on me.’ If so-and-so had an invention and you thought it looked great, and you invested and it goes awry, you still should be friends with that person. You shouldn’t take it out on that person and/or business because you lost money.
