[Laughter]
merge your culture acquire your success
merge your culture acquire your success
this is a story about my journey of
entrepreneurism and how I’ve gotten
there in 2004 at the age of 25
especially for you
Bryant students watching I did what most
of your parents would not want you to do
I decided at that time I had a great job
with a steady income at a great company
but it wasn’t enough for me
I wanted something different I wanted to
be challenged I wanted to innovate I
wanted to be my own boss
and yet with no private equity group no
backing no financial support to speak of
I had to get creative
I had to innovate and it all started one
day while looking in the back of the
most unlikely place the back of a CPA
magazine first of all nobody should be
reading those things but not only did I
read it I read it cover-to-cover
back in the classifieds those don’t even
exist today so if you’re a Brian Ryan
student currently you don’t even know
what a classified ad is but that’s where
it started I found an ad that said CPA
firm for sale and I thought wow didn’t
even know they were for sale and that’s
how it all began thirteen years ago in
the last 13 years I’ve continued to
innovate I’ve acquired 13 accounting
firms and four Fitness businesses with
my lovely wife who’s in the audience
over there what I would tell you is that
why why are private equity groups and
public companies the only ones
historically who are innovating in this
way why are they the only ones growing
through mergers and acquisitions why are
small to midsize companies who are the
drivers of our economy not using it so
let’s start with why growth is so
important when you think about growth
it’s not just important for the
entrepreneur founder it’s also important
for the culture of the company it’s
important for the team
challenges people it gets them thinking
outside their comfort zone and it all
starts with a concept of unique ability
and when I think about unique ability I
think about there’s only a few things
that most people are good at although
many people will say oh I’m a
jack-of-all-trades the reality is you’re
only passionate and excited about a
handful of those things I found very
early on in my career that I was really
only good at three or three to five of
these things my wife may say I’m not
good at any of them but I found that
there was three to five that I could
wake up every morning excited about and
to do and unique ability doesn’t just
mean that for that person it means it
for the whole team small businesses
unfortunately get stuck and not
everybody can follow their passion they
haven’t grown it to a size that allows
everybody to just utilize their
expertise so growth can be that thing
that helps the unique ability that helps
the founder and the team get on the same
page and build that culture build a
culture through growth that allows them
to think bigger to build something in a
legacy that lasts beyond the founder
build something that grows be part of
that foundational team that culture is
really helpful when building an
organization it challenges people to
learn and grow it challenges them to get
outside their comfort zone it challenges
them to innovate it also removes the
glass ceiling in most companies there is
an existing glass ceiling that doesn’t
allow somebody to raise to another level
without the company growing or the
person above you leaving that does not
sound like collaboration to me to me
waiting for your boss to leave is not
the best solution to learn and grow
however if a company is growing you know
that there’ll always be opportunity for
you to fill in over here on a project or
filling over here or help with this new
customer for us that has helped us in my
firm decrease turnover by 50 percent
compared to the industry average because
we’re moving that glass ceiling has
allowed people to continue to be able to
do what they want specialize in
different areas
innovate so why do we talk about when we
think about those things and growth is
so important why do we not talk about
mergers and acquisitions as one of the
strategies mergers and acquisitions is
the often ignored third leg of the
growth stool to join marketing and sales
and people just don’t think about it
when you think about small companies and
they should be and I ask you how many
companies are looking to grow their top
and bottom line how many companies are
growing so fast that they’re telling
their sales and marketing people to slow
down hit the brakes
we got to figure it out the answer to
those questions make it so obvious that
small and mid-sized companies are
ignoring a big part of the growth
opportunity in mergers and acquisitions
and they need to be thinking about it to
provide opportunity for themselves and
for their people and if that doesn’t get
you excited about an opportunity let me
share a few statistics first only 4% of
all companies started in the United
States get to 1 million dollars in
revenue 4 percent that means that the
vast majority have already failed many
statistics show that more than 80
percent of all companies started in the
United States fail within the first five
years the remainder of that are stuck at
the smallest of all levels really self
employed without leverage and sharing
your tools with others combine that with
the second statistic which is that 90%
of all businesses acquired in the US are
still in business five years later 90%
still in business five years later and
nearly two-thirds of all job growth in
the United States since the year 2000
have been created by small to mid-sized
companies well large companies have had
cuts the net job growth really exists at
the smallest levels so those reasons
tell me that we should be thinking about
mergers and acquisitions as a growth
strategy but if those statistics don’t
do it for you I’ll share a few other
intangibles that
I have found along my journey of
entrepreneurism have been very impactful
the first is that when acquiring a
company not Google but small companies
when they acquire our cashflow positive
from day one right so for you Bryant
students watching this is finance 101
why would we buy something to lose money
that doesn’t make a lot of sense to me
as an entrepreneur but it does make
sense in the small business base because
they do actually make more money the
next day which gives the business more
capital more availability to reinvest in
people and resources technology whatever
it might be second is that the return on
investment can be huge there’s a reason
private equity groups have been doing
this for years and returning 20 plus
percent a year to their investors now
doing this on your own with your own
capital
maybe leveraging a bank the return on
investment in most cases in the small to
mid-size company is a hundred percent
plus per year return on investment it’s
a pretty good ROI even with the stock
market taking a run and a recent dip I
would tell you that I would bet on the
entrepreneur all day long they changed
the world the third thing is that bigger
companies are worth more than smaller
companies so if you’re running a company
of a certain size today and you’re
trying to grow why not look at mergers
or acquisitions as a way to grow it
faster we already talked about the
statistics and show that the 90 percent
are still in business why not use that
and leverage it so let’s say you buy a
company for three times earnings by
plugging in your current resources
growing the company you can quickly get
it and resell it for four times maybe
combining the two companies together
another thing that’s really helpful in
mergers and acquisitions is that there
are strategic savings there are
opportunities to find synergies when you
own a company in you’re a small business
entrepreneur there are ways to find
synergies to cut 10 to 30% things like
rent an IT infrastructure and software
costs you don’t have to pay twice you
already have the infrastructure needs
when you acquire a company you don’t
double that
I would challenge that that the risks
are much less than what people really
think they are and then we get to supply
and demand today is like no other in
recent history baby boomers are retiring
at historic rates and they control
nearly two-thirds of all privately held
companies in the United States over the
next ten years it’s predicted that all
of those businesses will transition
whether that’s they close the door they
sell they give it to a management team
or they pass it on to the next
generation something is going to happen
with those businesses so there’s a lot
of supply in the market as for demand as
of July of 2016 the federal government’s
own surveys and studies showed that if
we were at the lowest point in the last
50 years of businesses being started by
people under the age of 30 so where the
media believes that there are lots of
businesses being started by a young
younger generation the reality is the
studies show quite the opposite and so
there’s going to be lack of demand but
there’s going to be a lot of supply
which provides an opportunity for people
who are innovative and thinking about
this as a growth strategy to really take
that time and really build a business
there’s a there’s a great concept out
there called no-man’s land it talks
about businesses that are between this
two and eight million dollar range that
gets stuck they get stuck because they
don’t use these concepts they don’t use
unique ability they’re there to to stuck
in the weeds they’re doing too many
things they’re doing HR accounting
administration so many things mergers
and acquisitions can be one of those
strategies to help those small to
midsize companies grow out of that space
and today with banks and lending we’re
the way it is it provides a unique
opportunity interest rates have been
ahead historic lows for nearly ten years
although they have climbed here in the
last year and a half they are still
really low if you look at what a small
to mid-size company could borrow at in
2006 that was somewhere between 10 and
12 percent today on mergers and
acquisitions they can lend somewhere
between five and six
half-percent that money goes a lot
farther and it saves the business owner
a lot an interest expense it saves them
a lot of cost and allows them to
reinvest even more in their business I
would challenge you to think about that
as the growth strategy entrepreneurs are
the drivers of our economy
they help us develop and innovate each
of you should be thinking about the ways
that expand your horizon beyond sales
and marketing beyond that to the third
leg of the growth stool I want you to
get out there build your dreams build
your entrepreneurial journey and make
the world a better place thank you
merge your culture acquire your success
merge your culture acquire your success
this is a story about my journey of
entrepreneurism and how I’ve gotten
there in 2004 at the age of 25
especially for you
Bryant students watching I did what most
of your parents would not want you to do
I decided at that time I had a great job
with a steady income at a great company
but it wasn’t enough for me
I wanted something different I wanted to
be challenged I wanted to innovate I
wanted to be my own boss
and yet with no private equity group no
backing no financial support to speak of
I had to get creative
I had to innovate and it all started one
day while looking in the back of the
most unlikely place the back of a CPA
magazine first of all nobody should be
reading those things but not only did I
read it I read it cover-to-cover
back in the classifieds those don’t even
exist today so if you’re a Brian Ryan
student currently you don’t even know
what a classified ad is but that’s where
it started I found an ad that said CPA
firm for sale and I thought wow didn’t
even know they were for sale and that’s
how it all began thirteen years ago in
the last 13 years I’ve continued to
innovate I’ve acquired 13 accounting
firms and four Fitness businesses with
my lovely wife who’s in the audience
over there what I would tell you is that
why why are private equity groups and
public companies the only ones
historically who are innovating in this
way why are they the only ones growing
through mergers and acquisitions why are
small to midsize companies who are the
drivers of our economy not using it so
let’s start with why growth is so
important when you think about growth
it’s not just important for the
entrepreneur founder it’s also important
for the culture of the company it’s
important for the team
challenges people it gets them thinking
outside their comfort zone and it all
starts with a concept of unique ability
and when I think about unique ability I
think about there’s only a few things
that most people are good at although
many people will say oh I’m a
jack-of-all-trades the reality is you’re
only passionate and excited about a
handful of those things I found very
early on in my career that I was really
only good at three or three to five of
these things my wife may say I’m not
good at any of them but I found that
there was three to five that I could
wake up every morning excited about and
to do and unique ability doesn’t just
mean that for that person it means it
for the whole team small businesses
unfortunately get stuck and not
everybody can follow their passion they
haven’t grown it to a size that allows
everybody to just utilize their
expertise so growth can be that thing
that helps the unique ability that helps
the founder and the team get on the same
page and build that culture build a
culture through growth that allows them
to think bigger to build something in a
legacy that lasts beyond the founder
build something that grows be part of
that foundational team that culture is
really helpful when building an
organization it challenges people to
learn and grow it challenges them to get
outside their comfort zone it challenges
them to innovate it also removes the
glass ceiling in most companies there is
an existing glass ceiling that doesn’t
allow somebody to raise to another level
without the company growing or the
person above you leaving that does not
sound like collaboration to me to me
waiting for your boss to leave is not
the best solution to learn and grow
however if a company is growing you know
that there’ll always be opportunity for
you to fill in over here on a project or
filling over here or help with this new
customer for us that has helped us in my
firm decrease turnover by 50 percent
compared to the industry average because
we’re moving that glass ceiling has
allowed people to continue to be able to
do what they want specialize in
different areas
innovate so why do we talk about when we
think about those things and growth is
so important why do we not talk about
mergers and acquisitions as one of the
strategies mergers and acquisitions is
the often ignored third leg of the
growth stool to join marketing and sales
and people just don’t think about it
when you think about small companies and
they should be and I ask you how many
companies are looking to grow their top
and bottom line how many companies are
growing so fast that they’re telling
their sales and marketing people to slow
down hit the brakes
we got to figure it out the answer to
those questions make it so obvious that
small and mid-sized companies are
ignoring a big part of the growth
opportunity in mergers and acquisitions
and they need to be thinking about it to
provide opportunity for themselves and
for their people and if that doesn’t get
you excited about an opportunity let me
share a few statistics first only 4% of
all companies started in the United
States get to 1 million dollars in
revenue 4 percent that means that the
vast majority have already failed many
statistics show that more than 80
percent of all companies started in the
United States fail within the first five
years the remainder of that are stuck at
the smallest of all levels really self
employed without leverage and sharing
your tools with others combine that with
the second statistic which is that 90%
of all businesses acquired in the US are
still in business five years later 90%
still in business five years later and
nearly two-thirds of all job growth in
the United States since the year 2000
have been created by small to mid-sized
companies well large companies have had
cuts the net job growth really exists at
the smallest levels so those reasons
tell me that we should be thinking about
mergers and acquisitions as a growth
strategy but if those statistics don’t
do it for you I’ll share a few other
intangibles that
I have found along my journey of
entrepreneurism have been very impactful
the first is that when acquiring a
company not Google but small companies
when they acquire our cashflow positive
from day one right so for you Bryant
students watching this is finance 101
why would we buy something to lose money
that doesn’t make a lot of sense to me
as an entrepreneur but it does make
sense in the small business base because
they do actually make more money the
next day which gives the business more
capital more availability to reinvest in
people and resources technology whatever
it might be second is that the return on
investment can be huge there’s a reason
private equity groups have been doing
this for years and returning 20 plus
percent a year to their investors now
doing this on your own with your own
capital
maybe leveraging a bank the return on
investment in most cases in the small to
mid-size company is a hundred percent
plus per year return on investment it’s
a pretty good ROI even with the stock
market taking a run and a recent dip I
would tell you that I would bet on the
entrepreneur all day long they changed
the world the third thing is that bigger
companies are worth more than smaller
companies so if you’re running a company
of a certain size today and you’re
trying to grow why not look at mergers
or acquisitions as a way to grow it
faster we already talked about the
statistics and show that the 90 percent
are still in business why not use that
and leverage it so let’s say you buy a
company for three times earnings by
plugging in your current resources
growing the company you can quickly get
it and resell it for four times maybe
combining the two companies together
another thing that’s really helpful in
mergers and acquisitions is that there
are strategic savings there are
opportunities to find synergies when you
own a company in you’re a small business
entrepreneur there are ways to find
synergies to cut 10 to 30% things like
rent an IT infrastructure and software
costs you don’t have to pay twice you
already have the infrastructure needs
when you acquire a company you don’t
double that
I would challenge that that the risks
are much less than what people really
think they are and then we get to supply
and demand today is like no other in
recent history baby boomers are retiring
at historic rates and they control
nearly two-thirds of all privately held
companies in the United States over the
next ten years it’s predicted that all
of those businesses will transition
whether that’s they close the door they
sell they give it to a management team
or they pass it on to the next
generation something is going to happen
with those businesses so there’s a lot
of supply in the market as for demand as
of July of 2016 the federal government’s
own surveys and studies showed that if
we were at the lowest point in the last
50 years of businesses being started by
people under the age of 30 so where the
media believes that there are lots of
businesses being started by a young
younger generation the reality is the
studies show quite the opposite and so
there’s going to be lack of demand but
there’s going to be a lot of supply
which provides an opportunity for people
who are innovative and thinking about
this as a growth strategy to really take
that time and really build a business
there’s a there’s a great concept out
there called no-man’s land it talks
about businesses that are between this
two and eight million dollar range that
gets stuck they get stuck because they
don’t use these concepts they don’t use
unique ability they’re there to to stuck
in the weeds they’re doing too many
things they’re doing HR accounting
administration so many things mergers
and acquisitions can be one of those
strategies to help those small to
midsize companies grow out of that space
and today with banks and lending we’re
the way it is it provides a unique
opportunity interest rates have been
ahead historic lows for nearly ten years
although they have climbed here in the
last year and a half they are still
really low if you look at what a small
to mid-size company could borrow at in
2006 that was somewhere between 10 and
12 percent today on mergers and
acquisitions they can lend somewhere
between five and six
half-percent that money goes a lot
farther and it saves the business owner
a lot an interest expense it saves them
a lot of cost and allows them to
reinvest even more in their business I
would challenge you to think about that
as the growth strategy entrepreneurs are
the drivers of our economy
they help us develop and innovate each
of you should be thinking about the ways
that expand your horizon beyond sales
and marketing beyond that to the third
leg of the growth stool I want you to
get out there build your dreams build
your entrepreneurial journey and make
the world a better place thank you
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