By Max Friar
While 2020 was certainly a dark year in many respects for the world, for the Calder Capital/Small Business Deal Advisors team, it was a year of tremendous focus, innovation, and fearless deal-making.
During 2020, we opened four new offices, expanded into two new states, hired four additional staff members, closed 74% more transactions (40 in 2020 vs 23 in 2019), and profitably grew revenue by 85%.
Calder/SBDA achieved explosive growth in the face of an overall M&A Industry that declined by 13-15% year-over-year vs 2019 (Sources: Statista). Our achievements are more impressive considering that the smaller deal market has fallen even more precipitously. Analyzing small business sales 2020 vs 2019, there has been a sharp decline of 22% fewer sales as reported by BizBuySell’s nationally-recognized Insight Report.
Q1 2020, Off To The Races!
As it did for many, 2020 started off with tremendous momentum for Calder/SBDA. Our team hunkered down and executed 13 successful transactions during the first two months of the year. We also welcomed Advisor, Shane Kissack, and the pioneering of our Chicago, IL, office. However, as we all know, January and February were the “easy” months of the year, and are now but a distant memory.
When the pandemic hit in mid-March, buyer, seller, and lender conversations slowed significantly. According to BizBuySell’s Q2 2020 Insight Report, “transactions decreased by 39% versus the previous year.” Many voices on all sides of the aisle were saying things like, “let’s wait until COVID passes,” or, “let’s wait until things get back to normal.”
While at first, my heart sank, fearing that our momentum would be entirely lost, I quickly realized that this was the time to act, the time to gain market share while others dawdled. Initially, it was a conversation with myself, “this IS normal”, and then I expanded it to the team, telling them that every day they wake up is normal; it’s the only reality we exist in. I felt that the longer we took to take action, the worse things would be in a year.
I embrace change and uncertainty, and I knew instinctively that if we innovated quickly and meaningfully we would emerge a shining star. I have never accepted that I should just sit. I love experimenting and changing.
March 2020 Headlines: Restaurants forced to close for dine-in. Gatherings were limited in number. The U.S. took the lead in confirmed COVID-19 cases.
During March, I spent a lot of quiet time studying how to prepare, engage, position and market distressed business opportunities. I think I jumped the gun a bit but as the government candy money dried up, we have started to see some distressed companies emerge. We have built out marketing collateral, a timeline, and a process specifically for selling distressed companies.
April 2020 Headlines: 10 million Americans found themselves out of work. Global death toll surpassed 200,000.
Sam Scharich, Business Development Director, recruited two interns and pioneered an email and telemarketing campaign to connect and help hundreds of franchise owners nationwide. Throughout the summer, Sam’s team made 9,000+ phone calls, assisted owners by providing thorough no-fee valuations, and signed up dozens of clients. Sam continues to hone this program and we are seeing the results of this work continue to flow into Small Business Deal Advisors.
May 2020 News: A full-blown meme war ensues of the effectiveness of masks.
While thousands of internships were canceled nationwide, Calder/SBDA ramped up and hired five (5) interns. Calder Associate and M&A Advisor Garrett Monroe launched an intern development program that not only gives all interns a complete taste of M&A processes but also helps the firm with talent acquisition, sales/marketing research, and materials creation. I asked Garrett recently to reflect on our intern program and he had the following to say, “The quality of intern candidates we are interviewing and bringing on is phenomenal. Without a doubt, we are recruiting the best and brightest from across the country.”
June 2020: We all got sick of the phrase “The New Normal.” Weddings are postponed. We fall in love with nature.
During June, we expanded our “Lifeblood” program, the firm’s name for its lead generation program. Understanding that new business development was going to get a lot harder based on my experience working through the Recession of 2008-2010, I worked with Sam Scharich, Garrett Monroe, the intern team, and multiple advisors to roll out a massive automated email marketing campaign that selectively targeted owners in Michigan, Indiana, and Illinois. Reflecting back, our lead flow has never been stronger. This is one of those things that you do and almost immediately say, ‘why didn’t I do that five years ago?’
July 2020 National Conversation: Socially distanced gatherings, “Did you get your stimulus check yet?” Spoiler: No.
Calder/SBDA relocated to a 3,400 square foot office in downtown Grand Rapids, MI. As everyone was exiting the city, we were entering. This has been an excellent move for us. The office is great for collaboration, meeting clients and prospects, and it ups our image professionally. As more professional advisors return to their downtown offices, we anticipate that our location will enhance networking and meeting opportunities.
Also in July, Calder hired Rachel Dupont as Writer & Marketing Coordinator. With growing deal flow and in anticipation of even more increased deal flow, we needed to shore up our administrative oversight. Rachel has been key in overseeing our clients’ pre-market preparation to ensure we’re getting out to the market in 30 days or less. At other firms I worked at it was not uncommon for a CIM to take 3 months to get out. Time is money for our firm and our clients! Dupont stated, “There is rarely a dull moment with Calder. I have learned a ton and really enjoy the personalities and variety of assignments.”
August: Football season was canceled. Prospective college students prepared for remote learning.
September: COVID cases spike in the Midwest. Headway was made with the vaccine.
Sam Scharich and I worked to reenergize Calder’s Buy-Side program, where the firm represents buyers who are seeking to find unlisted businesses for sale. “We’re processing record buy demand,” said Scharich. “As a result, we’ve taken the lead generation program that we’re using internally and rolling it out on behalf of our buy-side clients. And we’re the only firm I know of that guarantees leads!”
October: The POTUS and FLOTUS were hospitalized with COVID-19. An outbreak erupted in the White House.
Calder hired Office Manager Melissa Somero to assist with HR, compliance, and coordination of events/client hospitality. Additionally, with an MS in Historic Preservation, Melissa has taken on some external responsibilities related to our office building. Said Somero, “I am excited to be part of the team. As the world opens up, we are looking forward to hosting referral partners, buyers, sellers, and making the office a great place for team gatherings. I’ve really enjoyed becoming part of such a fast-paced and entrepreneurial culture.”
Additionally in October, I was honored by receiving a 40 Under 40 Business Leaders award from the Grand Rapids Business Journal as well as being recognized for a second consecutive year as one of Grand Rapids Top 200 Business Leaders.
November: A million affectionate Dolly Parton memes went viral (no pun intended). Families prepared for unprecedented holidays as infection rates soar and government restrictions are again put into place.
December 2020 Headlines: Election battles continued as the Supreme Court rejected a bid to overturn the election results in Pennsylvania. A $900BB stimulus package was passed.
As the year headed towards a close, I started to feel bullish about the prospects of closing 40 transactions, a milestone that 9 months earlier I felt would be 100% impossible. The impossible happened with the successful closing of The Bolt Bin on December 31, 2020, at 3pm.
Before wrapping up, I want to share a few words about the culture/philosophy underpinning all of these things that we did. This is what I have reflected on and learned:
- Keep up on current events, talk to people, and ask them what they think and what they feel. Look for common themes. Those common themes are much closer to reality than whatever you are thinking.
- Based on this reality, examine your practice. Does it align? Are you meeting the market? Technology and communication have/are changing so quickly. How are people connecting, getting information, searching for your services?
- Adjust where necessary and then act. Don’t be afraid to experiment!
- Put yourself out there. Market. Boast. Promote. Sure, some people will think you’re an idiot. Some people always think you are an idiot.
- Prioritize giving time, money, and opportunities to people that put their hands up. These are the people that volunteer ideas, that are thoughtful, and that want to contribute more. Those are all-stars. Give them the tools and opportunities that they deserve.
- Put your investment first, your money, your time. Sure, it’s risky. It may fail. At the least, it was a lesson. At best, it blossoms into a person, a service, a space, or an idea that pays dividends for years.
Cheers to the Calder Capital/SBDA team for rising to the challenge and shining a bright light on 2020!
Presenting 2020’s successfully closed transactions!