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How I Sold My Business: The Personal Touch Approach

By Divestopedia Team | Reviewed by John CarvalhoCheckmark | Last updated: May 4, 2021
Key Takeaways

Jason Gibson's approach to selling his mid-sized business focused on a personal connection with potential buyers and created a non-adversarial environment for the process in doing so.

Source: iStock/Boonyachoat

Jason Gibson specializes in timber frame construction, a traditional style of carpentry that dates back hundreds of years. Every project he touches—whether building a new house, or restoring a crumbling barn—has a gorgeous antique vibe, as if the structure was somehow transported from the 1800s. "There is a certain charm in the work," Gibson says. "You're applying old styles to new buildings."

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So perhaps it's only fitting that when Gibson decided to sell his company, Gibson Timber Frames, he resorted to an equally old-school technique: mailing letters to potential buyers.

"I wrote formal letters, typed and signed, and mailed them to about 10 businesses in my area that I had worked with before and I thought might be interested in buying it," Gibson says. "I knew that with a formal letter, people would read it—and they did."

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I knew that with a formal letter, people would read it—and they did.

His personalized notes laid out detailed financial figures, including gross revenue and profit for the previous three years. "I think it was a really good approach," he says now. "You're not physically hanging a 'For Sale' sign, but you are letting the community of builders know that the company is for sale. I definitely received a few calls."

By then, Gibson was well-accustomed to fielding lots of phone calls—from all across eastern Ontario, where his talents were in high demand. "I loved building these structures, and I think the clients picked up on that right away," he says. "I was passionate about it, and I really think that drove the business."

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"I was passionate about it, and I really think that drove the business."

That passion dates back nearly three decades, when, fresh out of trade school, Gibson went to work for a carpenter whose expertise was restoring old buildings. Day after day, he learned the historic art of timber framing, which utilizes thick, heavy timbers joined together by wooden pegs. Once the frame is erected, the walls are built on the outside of the shell, leaving the giant timber beams exposed on the inside. The end result is both stunning and super strong.

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“It takes a unique skill set,” Gibson says. “It is carpentry, for sure. But working with large timbers—and understanding how to connect them with elegance and craft and structure—is what makes it special."

It didn't take long for Gibson to start thinking about launching his own company. Though a carpenter by trade, he is an entrepreneur at heart. "Some people are just built that way," he says. "I think I'm one of them: you just want to do your own thing."

He started off small: himself and one helper. But over the next two decades, Gibson Timber Frames would become one of the most respected companies in its specialized field, restoring and building hundreds of beautiful structures along the way. Gibson even taught a popular one-week workshop to anyone who wanted to learn his craft.

"In the last three or four years, I realized that I had a functioning system that was actually rolling as a business," he says. "That was a good feeling. And that is when I started to think about selling."

Looking back, Gibson says he was at a crossroads. The company was starting to outgrow its shop—a custom-built barn on his property in Perth, Ont.—and would likely need both a new warehouse and a full-time operations manager. "I thought: 'Well, I have built a business that is doing its thing, functioning as a business should. Maybe this is the right size to put it up for sale?'"

I thought: "Well, I have built a business that is doing its thing, functioning as a business should. Maybe this is the right size to put it up for sale?"

In typical fashion, Gibson did his homework. A friend gave him John Warrillow's acclaimed book "Built to Sell: Creating a Business that Can Thrive Without You". Anxious to understand the buyer's perspective, he also bought a copy of the "Harvard Business Review Guide to Buying a Small Business".

The most important thing he learned? Hire an accountant with extensive experience in acquisitions. "An accountant who has dealt with businesses that have been bought and sold can really help you focus on a reasonable number," Gibson says. "Is your business worth $100,000 or a $1-million? Well, as a seller I hope it's $1-million, but the buyer is hoping it's $100,000. A neutral party like an accountant can say: 'Here's your range.' That was very helpful."

In preparation for a sale, Gibson's accountant worked to ensure his books were in good order for the previous three years. The accountant also encouraged Gibson to share those financial figures with potential buyers—which he did, when he sat down to write those letters.

Gibson also made sure to keep his staff in the loop. "With small companies like ours, you know everybody personally,” he says. “Your crew is 10 people that you're spending 40, 50 hours a week with. I told them up front: 'Hey, I'm starting to put feelers out, just so you know.' "

In the end, it was a former employee who purchased the company. At their initial meeting, Gibson presented a detailed spreadsheet of all items that would be included in the sale, from forklifts to saws. Each item listed its current value and what it would cost to buy a new one. "They knew right off the bat that they were buying X amount of dollars of stuff," he says. "Then the difference would be the profit and goodwill. That made it very clear what they were paying for."

They knew right off the bat that they were buying X amount of dollars of stuff. Then the difference would be the profit and goodwill.

The initial offering included Gibson's timber school, but the buyer wasn't interested in that aspect of the business so Gibson agreed to keep running the course himself as Jason Gibson's School of Timber Framing. After that, it didn't take long for both sides to agree on a price. The sale was finalized in 2019, after a few more months of due diligence. "We got really, really close in the details, and then we each called our lawyers,” Gibson says. “Our lawyers talked to each other. We had a few questions, a little back and forth on small things, but it went great."

Out of respect for the new owner, Gibson won't reveal dollar figures. "What I sold it for was not mind-blowing," he says. "It was a reasonable number for normal people in the world, is how I would describe it. We're living a nice comfortable life but I don't own a home in the Bahamas."

More than anything, Gibson is thrilled that the company he created remains in good hands. "People knew the buyer already and I've heard great things through the grapevine that he's done a great job," he says. "So that makes me feel really good, for sure."

As for Gibson, he is hardly retired. Now 49, he remains as busy as ever, teaching carpentry at St. Lawrence College in Kingston while preparing to restart his timber framing workshops post-COVID. His lifelong dedication to his craft recently earned him an Education Award from the Canadian Association of Heritage Professionals.

"I am super happy with how everything went," he says. "It was emotional for sure, but it felt right because it was planned for a while."

It was emotional for sure, but it felt right because it was planned for a while.

He can't emphasize that word enough: plan. "Valuing your company is tricky, so take the time until you're confident,” he says. “You want to be able to say to yourself: 'That's my number. If I don't get it, I'm going to keep going until I get it.' "

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Written by Divestopedia Team

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Divestopedia is a resource for entrepreneurs who want to sell their business for the best price and terms. Whether you are thinking of selling, have started a sales process, or are post-deal, we aim to arm you with the knowledge required to maximize value and limit your downside risk.

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