Master the keys to de-risking your business and answering critical questions buyers ask, from Luke Peters’ story.
Weekly Pilot Briefing
It's another outstanding Built to Sell episode. This week, I thoroughly enjoyed listening to Luke tell his story of growing from a niche product reseller to a $80M annual revenue powerhouse brand.
John also did an excellent job walking Luke through his growth and sale timeline and highlighting the various pivots that NewAir executed in transitioning from selling to big-box distributors to selling directly to consumers.
I also liked the simple way in which Luke explained de-risking the business for a potential buyer and the importance of People, Systems, and Audited Financials. I hope you enjoy listening as well.
Some timestamped notes if you are short on time:
27:45 – The 10% Rule – “If you’re not at 10% EBITDA, you are not showing that your brand is valuable”
33:40 – The importance of incentivizing your management team
34:45 – Building out your team of experts in advance of the sale
41:00 – Understanding perceived value (PE buyer looking for cash flow, while a Strategic may be looking for synergy)
46:45 – Handing over the reins and the importance of second act planning
About this Episode
Luke Peters started off by reselling everyday appliances like bar fridges online.
Eventually he built a brand and shifted to selling his products on big e-commerce retailers. Peters grew NewAir to $80 million in revenue before selling it for a lifechanging windfall in 2022.
In this episode of Built to Sell Radio, you’ll discover how to:
Think about something Peters calls “The 10% Rule.”
De-risk your business in the eyes of an acquirer.
Weed out charlatan acquirers that don’t have the money to buy your business.
Answer the critical question every buyer asks.
Peters provides a masterclass for turning nothing into something valuable.
About Our Guest
Luke Peters
Founder and CEO coach at Apex CEO, where I help founder CEOs build investable businesses, develop strong leadership teams, drive margin growth, and achieve strategic alignment for long-term success.
My mission is to guide CEOs through the complexities of scaling their companies and preparing for successful exits.
Prior to Apex CEO, I spent 20 years growing Newair from a garage startup to one of America’s fastest-growing privately-held Internet retailers.
I led the business through its transformation, expanded into major retailers like Home Depot and Amazon, and successfully transacted with private equity in 2021.
Definitions
Due-Diligence: This is a comprehensive appraisal of a business or investment undertaken before a merger, acquisition, or investment. It seeks to validate the information provided and uncover any potential risks or liabilities.
Earn-out: This is a financing arrangement for the purchase of a business, where the seller must meet certain performance goals before receiving the full purchase price. It reduces the buyer’s risk and aligns the interests of both parties post-acquisition.
Letter of Intent (LOI): This document outlines the basic terms and conditions of a deal before a formal agreement is drawn up. It serves as a mutual commitment between the buyer and the seller to move forward with the transaction on the agreed-upon terms.
Re-Trading: This occurs when a buyer attempts to renegotiate the purchase price of a deal after initially agreeing to one. It is often seen unfavorably as it occurs after due diligence, seemingly exploiting newly discovered information.
Click the link below to take your 8-minute, 12-question PreScore assessment and take the first step toward making a profound impact on the second half of your life.
Comments