Podcast: What Happens if You Lose Your Biggest Client? Interview with Larry Armstrong

By Ryan Tansom
Published: June 13, 2019 | Last updated: March 21, 2024
Key Takeaways

Learn what you can do if you lose your biggest client and your business’ sustainability is threatened.



About the Host

Ryan is an entrepreneur, podcast host of the show Life After Business and the co-owner of Solidity Financial. Having personally experienced the hazards of selling a business, he joined up with his friend Brandon Wood to educate others on the process. Through their business (Solidity Financial), they provide a platform for entrepreneurs called Growth and Exit Planning that helps in exit planning, value building and financial management.

About the Guest

Larry Anderson is a business development and sales expert. He studied marketing at the State College of Florida-Manatee-Sarasota for a short time. He began his “accidental” career in entrepreneurship with his family’s industrial repair company in Minnesota. After growing the business and expanding to Wisconsin, Larry sold the business to his general manager. He learned some tough business lessons in the process that he carried into his second endeavor.


Larry focused on contract manufacturing. The company ran wildly successful for 10 years. When a major technology breakthrough decreased the demand for his product, Larry pivoted into automation. He stubbornly ran the business for another 8 years before selling to a larger and well-respected local company.

If you listen, you will learn:

  • Larry’s entrepreneurial background.
  • How industrial repair and contract manufacturing differ.
  • Lessons Larry learned from his first business sale.
  • How Larry made the pivot into manufacturing.
  • The ups and downs of serving just one large client.
  • How the relationship changed with Larry's client.
  • Why the contract manufacturing industry changed.
  • What came after the big blow?
  • How Larry pivoted into automation.
  • How Larry and his business partners divided the assets of the previous business.
  • The difference with the automation business.
  • Larry’s vision for that business.
  • The reasons Larry sold the automation business.
  • The sales process.
  • Finding the right buyer and business broker.
  • The importance of doing due diligence before exiting the company.
  • What Larry would have done differently.
  • What is next for Larry?
  • Larry’s advice to listeners.

Full Transcript

Announcer: 00:00:04 Welcome to Life After Business, the podcast where your host, Ryan Tansom, brings you all the information you need to exit your company and explore what life can be like on the other side.


Ryan Tansom: 00:00:15 Welcome back to the Life After Business podcast, this is episode 87. Have you ever wondered what it would be like if your biggest customer dropped you as a client? Well, that's exactly what we're talking about on the show today because Larry Anderson is on and he describes the first journey that he has an entrepreneur building and selling a service and repair business to his general manager so he could focus on growing and scaling the contract manufacturing company from zero to 10,000,000 in revenue and 55 employees with a ridiculously large concentration into one customer who then had a little bit of a change of pace with their industry and their strategy. So Larry had some very big decisions he had to make to pivot and then continued the business for another eight years so that way he could eventually sell it for what it was worth. Larry really dives into the life lessons he had learned throughout the experiences and the different companies and what he would have done differently and what he's doing differently now in his new company. So without further ado, I hope you enjoyed my episode with Larry.

Announcer: 00:01:16 This episode of Life After Business is brought to you by Solidity Financial's growth and exit planning. Their proven process gives you clarity on all of your exit options and how those options impact your financial success, timing and future happiness. Sell your company on your timeframe to the right buyer at the price you want.


Ryan Tansom: 00:01:39 Morning Larry, how are you doing?

Larry Armstrong: 00:01:40 Good Morning Ryan. Thanks for taking the time.

Ryan Tansom: 00:01:42 I'm excited and I'm excited to have you on the show because our really good friend, mutual friend of ours, had a lot of great things to say about you and how you've been helping him out in his life. And, you know, after getting a window your story, I think it was something I just couldn't wait to, to hear a little bit more about, you know, but for the listeners that aren't familiar with it, can you bring us back to like the, the day that you decided you wanted to become an entrepreneur and how did you, how did you decide to jump in with both feet?

Larry Armstrong: 00:02:10 Well, actually, I don't know that I made a conscious, intelligent decision to become an entrepreneur. I think it was more of an accident actually. Uh, I was living in southern California. I kind of dropped out of college and moved to southern California and also selling cars. And um, my brother had a little hobby electronic industrial electronic repair business. I had one part-time employee working in my dad's basement and he somehow convinced me for 200 bucks a week to move back from San Diego to Minnesota and try to grow this business through sales. So it was really a part-time, a very, very part-time sales job. And so I said yes for some reason. And uh, I think he's the better sales guy there. So I moved back from San Diego and I started a selling industrial electronic repair, which I knew absolutely nothing about, but after talking with him a little bit and understanding the need and the market and the industry, I kind of figured out of the channel. So this is the early nineties and so I kind of figured out who was selling this equipment, who had the need, and then I just started calling. They were distributors, so just started calling them and growing the business and um…

Ryan Tansom: 00:03:27 You were calling the people that were selling the equipment and you were repairing it or…?

Larry Armstrong: 00:03:30 Yes. So there were dealers of the new equipment, but at the time this equipment wasn't really super reliable and so they're having failures out in the field. And this is, this is equipment for like manufacturing for anything thrown extruders, plastic extruders to a HVAC equipment, all kinds of process equipment. And when this equipment would go down, it would stop a production line or it would make a building get warm or something like that. So it was critical that this stuff got repaired quickly. So h, very high margin, uh, in very high demand and uh, so he had one part time repair person working in my father's basement like I mentioned, and so I just started calling the dealers of this equipment because their customers will call them complaining that their equipment was down at the time and most of the manufacturers did not have service techs or repair techs.

Larry Armstrong: 00:04:24 Some of it was either European-made equipment or Japanese-made equipment and so they did, they were shipping the product here, but they didn't have support staff in the US for it. Um, so anyway, we started a are on the dealers have this around the country and started getting in repair business and field service work and uh, over the course of three years we grew it from, um, yeah, most of them myself grew it from, um, one part time person to a staff of 10. Yeah. So we were rolling fairly quickly and, and uh, actually opened up another office in Wisconsin to cover some of the business of Wisconsin. So that was good. And then simultaneously about six months into that project, got a call from an old client at my father's who, um, needed some spare parts for equipment and so we started doing some contract manufacturing for them. It's in the computer industry, so kind of growing the industrial repair business and then saw an opportunity for contract manufacturing. So to answer your initial question, I never really planned on being an entrepreneur. My father had been, and I was more interested in sales and business development. So I never really wanted to own my own business. I didn't know a lot about accounting or manufacturing or HR or you know, really anything…

Ryan Tansom: 00:04:24 All the fun stuff.

Larry Armstrong: 00:05:43 Yeah. I didn't really have any of the skill sets to really run a business and I don't know that I really have the interest, but so I would say I'm really an accidental entrepreneur in that standpoint.

Ryan Tansom: 00:05:50 It's interesting because a lot of people- I've heard that statement more than once and it starts with out hustling and you're out hustling and you find a need and you fill it. And then all of a sudden there's this operation. You had 10 people working for ya. So how did you guys, you know, maybe kind of extrapolate those two, couple different service arms because you were. How long did that service repair continue and did you continue to divest or focus more of your time on the contract manufacturing and how are they similar?

Larry Armstrong: 00:06:18 Yeah, so similar in that they're both electronics. They're both in the electronic industry, but one was really a service and repair company that's brand at the time was called Pro Fix was the name of the company and so that was basically serving a customer who had a need that their equipment was down. So that's what that was all about. The contract manufacturing was building new equipment in the electronics industry. But that was that was building circuit boards and cable harness assemblies and things like that. And so really what happened, Ryan is the repair business is growing and the contract manufacturing businesses going and I was kind of the main business development guy for both of those and so just kind of realized that I didn't have the bandwidth to manage them both. And so I actually sold the repair business to my general manager that was, he was doing a lot of the day-to-day stuff in the business anyway. And so I sold the, uh, repair business to him so I could focus more on the contract manufacturing.

Ryan Tansom: 00:07:18 So, you know, a couple of questions on that. I find it interesting that a lot of the distributors didn't have service because that was our old, our old world. I mean it was your distributor, but then the services where a lot of the money was so, you know, did… kinda curious and one is how did you end up selling it to him to value the business at something or is it more just you take over the work or how did you guys end up structuring that?

Larry Armstrong: 00:07:43 Yeah. So lesson number one, right? So I didn't know anything about first of all, didn't know anything about building a business or growing a business or doing that. It just happened. And then still selling the business. The only thing I knew with talking to friends of mine that had businesses or you know, advice of my peers was typically a service business gets about one times revenue. So I thought, OK, that sounds good. And um, so that was number one. And then number two, the general manager was somebody I had known for quite a long time and so, and I was doing quite well financially. And so I ended up financing the majority of the, the sale, the to him on a note. And so I took on the financing of that.

Ryan Tansom: 00:08:26 So what was the big lesson out of both of those?

Larry Armstrong: 00:08:31 So there's some pain points. The first lesson is get some, you know, really get some outside advice, bring in somebody that has experienced valuing a business, somebody that's not certainly not attached to the business but understands the space and can, can bring forth, uh, but you know, a true and proper valuation of the business because certainly left money on the table. The business was growing, it was- margins were very good.

Larry Armstrong: 00:08:56 And the second thing, what should extremely unfortunate, so I sold it to my general manager and unfortunately less than two years later, he died unexpectedly. So the problem was I did not have, again going back to the inexperience, I didn't have good structure in place of a buy-sell agreement and things like that and what it found out unfortunately, you know, after reviewing it was that he had really made a mess of the business in the last two years. So it was the business the business carried on for a couple more years, but it really, really was damaged to a point really beyond repair. So the big huge financial lesson of that is, you know, get, get people involved regardless of how much you trust somebody or what kind of relationship and regardless of how the business is cash flowing, you don't spend the time, spend the money, spend the, bring in professional consultants and people to do that kind of stuff.

Ryan Tansom: 00:09:57 Did you end up not getting paid the full amount?

Larry Armstrong: 00:10:01 Yeah. Oh Yeah. So I lost a substantial amount of money. So that's my, uh, that's my lesson number one there, you know, within that process. So not, not getting a proper valuation. Not doing a real good business plan.

Ryan Tansom: 00:10:16 You were young, too. And I mean, I, I can, it's probably a very common mistake and I, you know, I'm curious Larry on that, the, the intricacies of that business, did some of the dealers start getting into the service at some point and then how did, you know, cause I think about the unique situation that you guys had. So like other than just the one times revenue, how you could've potentially valued that because of the unique niche you had unless there was maybe more risk because the dealers could've quickly gotten into it and forced you out.

Larry Armstrong: 00:10:42 Uh, so yeah, so the electronics industry was, was moving fairly quickly. They're the dealers themselves were not getting into the repair business. The two things were happening, the manufacturers were getting much better. Quality was improving and they also were starting to establish their own service and repair facilities in the US. Again, most were either European or Japanese manufacturers of these controls. And so, you know, five years into this business we started seeing them opening up their own service and repair because the customers were demanding it because it just couldn't have this equipment, critical equipment going down and so the quality improved and the, the manufacturers started to bring in service centers, and at one point we were an authorized service center for about 20 different manufacturers. And so we're, we're doing warranty processing and hot swap exchanges and things like that. So a couple of things going on there.

Ryan Tansom: 00:11:39 What were some of the things that geared you more towards contract manufacturing? I mean, was it just passion? Was it a financial upside, different challenge or why'd you pick that one over the service and repair?

Larry Armstrong: 00:11:54 So the contract manufacturing business was in the disk drive space. So again, a little older that, quite a bit older than you. Um, what was going on in the early nineties was the Internet was coming on and storage was just exploding. And so most of most of my career, I've been an opportunity-seeker more than a planner of businesses. And I learned something from my electronics service repairs business, but also starting to see what was going on in our growth and the contract manufacturing business, uh, was phenomenal. The, the equipment that, the cost of the equipment we're building was, you know, in the hundreds of thousands of dollars per machine. So the revenue was much higher, margins were pretty decent because this customer, they're the largest disk drive manufacturer in the world and they were more about how fast we could build equipment versus, you know, cost cutting and things like that again, from, from '92 to 2000 timeframe. So it was really about speed to market versus cost control and supply chain management and all that kind of stuff. So we're, we're kinda running wide open, full throttle with that customer. We didn't abuse the relationship of course, but uh…

Ryan Tansom: 00:13:05 Well it makes it a little bit easier when… I mean it's just a little bit more of a partnership than it is some, some buyer pushing you down because they want to hit their bonus.

Larry Armstrong: 00:13:12 Yeah, it was, it was nothing like that at all. So like how fast can you build this stuff, what do we need to do? And so we, you know, when we started that started with a couple of people and we didn't have the clear picture. Nobody did. Nobody knew what was going to happen with the Internet and what's with data storage and all that kind of stuff. But the year-over-year growth was phenomenal.

Ryan Tansom: 00:13:33 Well it's a little- I want to dive in to that so you refer to this one customer. So was there a triggering event that led, you mean because it's such a, such a different business than the service and repair company that you had, you. Did someone approach you or did you see the opportunity and connect some of the dots? What, you know, what were some of the main or like pieces that originated the business?

Larry Armstrong: 00:13:54 Yeah, so good question. So when I was running the repair business, one of these things where I got a call one day from an employee from this disk drive Company and he had actually worked with my father at the old company, this, this large disk drive company acquired a Minnesota-based manufacturing facility. And so they're going gonna get some spare parts for some of the machines. My father had, my father, the entrepreneur, had built maybe five to eight years ago. And so I just happened to take a phone call and he was asking if we could supply spare parts or at least give him some drawings of circuit boards and things like that so they could service some of the machines they had and he had just mentioned that they're possibly thinking about building a few more machines because their capacity was, demands were increasing. And so again, it's more my curiosity than anything. So I just chatted with him a little bit and I decided to meet him and go down to their facility and talked a little bit. And I think we supplied that. I think the first order was a few thousand dollars of spare parts or something like that. And uh, because we'd have had the old information, we were able to build these things. And so, so we built these parts for him thinking, well, you know, it's good margin, nice little job and see where it goes. But it's sounded like there's maybe some more opportunity there and so we just just kept talking and, and that's kinda how I got into that contract manufacturing side. And so it just started really developing fairly quickly.

Ryan Tansom: 00:15:23 So you were actually building the parts versus servicing them, so was there specs they were giving you, they said, hey, here's what we need and then you just go off and build it because of the historical knowledge.

Larry Armstrong: 00:15:36 So as I mentioned, years earlier, my father had built some machines for the predecessor of this company in Minnesota. Yeah. So he had built about 40 machines for them. And so when this California company acquired the Minnesota Company, they found his documentation, but that business unfortunately was his old business was no longer a business thought, but they somehow got ahold of me and you know, looking to see if we could supply some spare parts. So that was really the genesis of that business.

Ryan Tansom: 00:16:09 So what are some of the milestones as you were kind of cooking along and you said pretty crazy growth rate. Where did, where did you make the decision to go full-fledge into that versus, and sell the service and repair were you pretty up and running, or was it just a quick switch to the opportunity or whereabouts was the funding.

Larry Armstrong: 00:16:27 We're so there's about a, about a two year overlap in those businesses. So I was managing the service and repair business and brought on a manager and doing the sales side of that and at the same time I was doing the business development sales side of the contract manufacturer. So wearing basically two hats or carrying two business cards at the time. And so roughly about two years into that, Ryan was, uh, I think we may be were crossed over to a million dollars in the contract manufacturing business, which was… that surpassed the repair business in less than two years. But the really the main thing that, that interests me is my business partners were interested in taking on all the operations side of it, which is what's really the drag for me in the repair business is I just really didn't care for the operational side of it, but I just ended up doing it and so they are willing to do that, allow me to do purely do the Bizdev sales side on the contract manufacturing and they would take care of all the, all the other stuff

Ryan Tansom: 00:17:30 All the other stuff. Right. The, the fun stuff. So how did, how did you guys who, you know, with your partners, how did you guys structure your agreement? I mean, was it, was it just a split three ways and like off to the races or was there anything creative that you guys did for the partnership agreement?

Larry Armstrong: 00:17:44 Yeah, good. Great question. Because of sales, right? And so I'm in business and the unique thing is I have this other business going on and so really the way we started it was just on a percentage of revenue, you know, a real simple thing. None of us, none of us thought it would, would grow to the scale that it did. And so for the first three or four years of that business, it was just a straight gross revenue commission have like an independent Rep. and uh, the business was doing very well and so, uh, I actually moved to Florida and you know, the client was in Minnesota but I moved to Florida and I was just commuting each week and just kind of lived up, lived a pretty good life and took care of the customer, but they were managing the rest of the business and managing. We had, I think both 55 employees or something at the peak of it.

Ryan Tansom: 00:18:35 Holy Cow. So from you at the year two when you decided to sell their service repair business and you decided to shift this direction and you keep referring to the customer, so versus, you know, with business development and the customer, what was, what was the bizdev of like, I mean, what did you, was it just one customer that you were servicing for them or are you diversifying out with a bigger customer base or how did that?

Larry Armstrong: 00:18:59 So less than number whatever on my life lessons. So the, you know, the data storage industry and was really exploding fathers. Probably five or six primary players in data storage or disk drive a data storage. And so this client of ours was consuming all of our capacity, we were growing kind of about as fast as we could, and it was highly proprietary as far as the equipment we were building and they, the technologies that each one of these companies were providing to the market because there's intention, a competitive pressure. So we did not, uh, except for maybe a couple of occasions we've met with a few of their competitors and talk to them about building similar equipment to them, but we were so busy with the prime customer that we couldn't even really foresee taking on even further capacity. And then the conflict of interest, we didn't know how to really circumvent that because of the knowledge that we had with this process. And our client was the number one leading manufacturer at the time of these, of these devices. And um, and they've since, uh, they, they're still the largest and so they've acquired several of those competitors over the years. But, um, yeah. So…

Ryan Tansom: 00:20:24 How did you… So they, would they not allow you to do it or did you have like a contract or something like that?

Larry Armstrong: 00:20:28 You know, we didn't, it was just crazy. It was, things were moving so fast. We didn't have contracts, we didn't have supply agreements, we didn't have consigned inventory agreements. Um, we didn't have, you know, it was just full-throttle and it just doesn't sound, you know, what I say it and want to talk about it today, you know, most people would just say you've gotta be kidding me, you know, what, what are you stupid or what, you know, and it's just… But it was good margin was good. [Ryan interjects: You've got sales, man, like that's crazy]. Ya, you know, major revenue growth and really high margin and, and uh, and the employees were happy, life was good and I was doing some other real estate investment and other things outside of that. And so, so that's kinda what we did. And we ran that for almost 10 years.

Ryan Tansom: 00:21:17 So you said 55 employees at the top. So what were some of the, the revenue marks that you were hitting?

Larry Armstrong: 00:21:23 So we started from zero and uh, the first couple of years were, like I said, out of the gate, I think the first year or year and a half into it, we're at a million bucks and so we were a million, million and a half the second year and 2,000,000 the third year and we started growing in almost a million bucks a year and I think we hit 10,000,000 at our peak in revenue.

Ryan Tansom: 00:21:44 Was most of that revenue with that one client?

Larry Armstrong: 00:21:47 Ninety nine percent of it.

Ryan Tansom: 00:21:49 Holy Cow. Did that ever stress you out? I mean…

Larry Armstrong: 00:21:54 Yeah… Well I didn't lose a lot of sleep about it because like I said, I was doing some other things with real estate and my business partners also had some other side business stuff they were working on. So we're kind of kind of in a harvest– it is really weird. We're kind of in a harvest mode for about 10 years. So you know, we did acquire a large building. We did have quite a bit of equipment and inventory for this specific customer. Again, all stuff that we purchased on our own dime inventory that we needed to have to really buffer the demand schedules. So after 10 years you didn't, you didn't think, you thought maybe it will slow down a little bit, but you didn't think it would really slow down.

Ryan Tansom: 00:22:35 So what was the communication with like this client because it was full-throttle because I'm just thinking Larry from my background where, you know, we'd have big clients and everybody is really familiar like the walmarts and the targets a world where they just kind of swinging, swing their power around the terms and conditions and you're just, you know, you're lucky to be with them. And that kind of relationship. Did you have one contact? Was there multiple people? What was the actual relationship like?

Larry Armstrong: 00:23:02 Yeah. So, uh, I was the prime point person with this, with this customer. A typical week for me would look like a flying in from Florida on a Sunday night or Monday. That would be with a client a two or three days a week. So I would meet with different- I would meet with purchasing or meet with manufacturing. I would meet with engineering, so I have roughly about 15 or 20 different individuals at the organization. We would talk about our forecast, we would talk about deliveries. We had maybe a couple months visibility on their schedule. So it was that, it was that crazy how it was moving. So we were talking about that. Then I would meet with my team back at our facility, know, relay that information to get the updates on what the, what the schedule looks like and all that kind of stuff. But we, we played so many scenarios about, you know, if we got you an order here or can you get cut week off of here and if we got, you know, so some of this, some of the big, big heavy equipment, electronic data acquisition stuff that would go into these machines was supplied by Hewlett-packard and a few others so they would supply that to us.

Larry Armstrong: 00:24:13 So there's a lot of that scheduling conversations and stuff going on, but it really was driven by how fast can we build physically build these, this equipment for them at the last moment's notice kind of a thing. So that's Kinda how it went for almost 10 years.

Ryan Tansom: 00:24:30 So in it, and you had an intimate relationship with these people. So I mean did you not feel I mean because you probably didn't feel too much stress that I wasn't gonna stop. So two months might seem like a short… in your mind, was that a short amount of time and you wish you would've known further in advance what the forecast was looking like and how things were evolving or was that enough time because of how fast you guys were going?

Larry Armstrong: 00:24:56 You know, it's, it's never enough time and it's never a clear enough forecasts and there's just a lot of things. But kind of what happened is over the course of those 10 years is every, every year, we're building year over year over year. So we were kind of internally building to our own historical forecasts. Right? So we said, OK, we built x amount of machines last year. We think it's gonna stay the same or grow, you know, 10 or 20 percent. And still we're, we're managing it internally because we really couldn't deliver off of a two month visibility. There's just, we had to take her own internal risks on that because you just couldn't physically get all the components and all the stuff we needed because everybody else in the industry was crazy on fire as well. Right. So you're pushing the same suppliers that everybody else was pushing it.

Larry Armstrong: 00:25:46 So. Yeah. So we had to make some of our own risks and, and uh, do some of our own scheduling and, you know, a second shifts and over times and just all kinds of stuff that we had to do to stay on track because that was, that was the most important thing to our customer above all was hitting our delivery dates. And so that stress, Ryan was more born on, uh, my business partners and the manufacturing team. I was the Biz Dev guy that would just, you know, tell the customer we'll make it happen. And generally we did very, very rarely did we miss a forecast or delivery date.

Ryan Tansom: 00:26:21 So where did things change? I mean, what have… you said, you were 10 million and 55 employees at the top, what are some triggering events that shifted the dynamics?

Larry Armstrong: 00:26:32 So a huge life lesson again, so we did not have long-term contracts, we did not have any inventory guarantees from this client and what caught us off-guard because we were not, even though we were building machines for the disk drive space, we didn't really understand deeply what the other players were doing and what our own customer was doing in their R&D departments. And so what happened was there was a major breakthrough in technology in disk drives that the equipment that we were building now they needed fewer machines than more machines. So they actually had an over capacity of the equipment that we built because it was a major breakthrough in technology.

Ryan Tansom: 00:27:14 What was the technology that them, the w, w, what was the specific thing that changed?

Larry Armstrong: 00:27:18 So the machines that we built were for the internal components of a disk drive and they were for the recording head the head that would actually transmit in a put data onto the disk drive itself and the way that that had interacted with the platter, they were able to change it. And so they needed much fewer recording heads in a disk drive. And so at the time we, we're selling equipment, some of these disk drives had five or 10 or 15 recording heads and consequently five or 10 or 15 platters, storage platters, internally, they had a breakthrough on the recording head and the way they transmitted data. So they went from needing 10 or 15 recording heads to needing like one. Yeah. So all the machines that we built were relative to the amount of those recording heads that went inside the disc drive. And so now they came up with a new technology, a different head technology and a different platter technology where, you know, now we have a terabyte hard drive with, you know, maybe has a couple of platters in it or one platter in it. Whereas before that would have had maybe 50 platters, 50 recording heads in it. So just a huge technology breakthrough that caught us off guard because our customer, they're get a highly competitive industry and our customer just didn't give us a ton of heads, heads up, heads up. They're recording it. So they did not give us a ton of, uh, you know, insight or anything onto that because they still needed the supply or the equipment up until the point where they didn't need it. Right? So…

Ryan Tansom: 00:29:02 How did that, I mean, what was the conversation? You mean you fly up from Florida and then all of a sudden you're sitting down for coffee and like how did, like what ended up, how did that whole thing unfold?

Larry Armstrong: 00:29:13 So they had asked us to do a couple of prototype machines for them that were different than what we're currently doing and they were really tight-lipped about it, but it was kind of modifying the machines that we had built with some different electronics and things like that. So we had done a few machines like that and for our understanding it was about for them to increase the, you know, get capacity out of the machines that they had. We didn't know that they were converting them to build these new types of recording heads that would actually dramatically decrease the demand. So we were getting some of the folks that we worked with were getting, giving us some feedback, but most of the people we're working with, we're a manufacturing and they're in purchasing, so either they didn't have knowledge or running that good of an operation where they just didn't, they didn't really think of us in that true sense of a partner, even though we had supplied, I think to that point, Ryan, I think like 700 machines to them or something like that. So they're, you know, this part of their manufacturing, we were the guys for them, for this, for this machine, which was pivotal to what they're doing. And so, I don't know, it's just, it just kind of complete the caught caught us off guard, like I said.

Ryan Tansom: 00:30:39 So I mean they, they've got 700 machines. And how many were you kicking out a year then? So at that… what time of the year was this? And did you guys have were you literally left with inventory or how did that, how did it actually take place?

Larry Armstrong: 00:30:53 Yeah, so it was one of the most abrupt things that I've witnessed in my young career. You know, of a change like that so that the, you know, I can understand ups and downs because over 10 years we'd, we'd had some years that are a little slower, some years are busier than others, but generally the trend was upticking. So in this particular case it just, it really dried up. So we started to get our first purchase order started to get pushed out or before it was always about how fast can and don't do this. So some of the later purchase orders are starting to get it pushed out and we weren't getting real good clarity on them and you know, they're talking about their, their, you know, their demand schedules were changing or whatever. And so yeah, so we had, we had had quite a bit of inventory on hand and it's all unique inventory for this particular client and we just ended up holding the bag. That's really the nuts and bolts of it. There's no, no way to sugarcoat it.

Ryan Tansom: 00:31:55 That's like the musical chairs and you are left without a chair.

Larry Armstrong: 00:31:59 That's it, you got it. That's exactly it.

Ryan Tansom: 00:32:02 What'd you guys do? Like what are you going and talking to your partners? And stuff like that, I mean, you know, I'm assuming is that started to happen, the demand schedules are changing and the POs are trickling in instead of flowing. I mean are you getting stomach aches, are you making calls or like what, what, what's the internal dialogue that you guys are having on how to handle that?

Larry Armstrong: 00:32:22 So some of it, you know, the client themselves, they didn't know how well the technology was going to work, they, you know, there are some shows that the industry was going to continue to grow at the same rate. So as far as the, that particular client, we worked with them, try to get information from them, most of it they were just unclear of where were the technology was going to go. And so we kind of started to have to make some decisions on our own. Like I said, they were our top client. So one of my business partners retired, uh, the other one decided to go into the medical device industry and move out of the data storage industry. And so I moved back from Florida, kind of ended up here I am again being the entrepreneur that I didn't want to be, so took over the business, did a lot of downsizing, sold the facility we had and then pivoted the business into kind of a different space but still in automation and manufacturing. So it was a fairly significant pivot as far as doing less contract manufacturing, more standard product for a broader audience.

Ryan Tansom: 00:33:24 I mean that's huge. I mean what, I mean you had some serious tenacity to keep that going. So you mean you went from like, was it completely zero revenue, like no POs and then you're just sitting there with a building, 55 employees, payroll and equipment and like did you have to file for bankruptcy or anything like that or were you able to…?

Larry Armstrong: 00:33:47 Fortunately we had quite a bit of cash. We did burn a lot of cash in the interrim instead of just shutting the business down because we didn't have real clear and it would've been nice from the client's standpoint just to say, hey, we don't need you for two years, but we, we did kind of get strung out for awhile and so we did burn through some cash, but we have some assets and we had some cash and like I said, uh, after, I don't know, six, eight months of htat, one of my partners retired and the other one moved on into the medical device industry. And so I kinda took over and picked up the pieces and pivoted the company, uh, into manufacturing, mock up automation equipment and a lot more cloud customers, a lot less contract manufacturing.

Ryan Tansom: 00:34:26 So did you have to buy your partners out or was it just like, OK, good run guys? Because they didn't want to do the, the effort of the pivot or what?

Larry Armstrong: 00:34:35 Yeah. And so we'd always, you know, the last several years of the business we were running it in harvest mode. And so we had some assets and so we basically worked out an arrangement at what we needed to do and, and, uh, it really worked out Kinda cool. And so I ended up with the company itself. Uh, we parsed off the assets as we, as we needed to. And then, uh, I took the company and moved it and ran it for another eight years or so.

Ryan Tansom: 00:35:03 Well that's, that's a, that is some serious, serious endurance right there. So. And grit, if you want to call it grit.

Larry Armstrong: 00:35:13 Yeah, probably stubbornness a along with maybe a little naivite uh, you know, thinking I could just pivot it into something else.

Ryan Tansom: 00:35:20 It's awesome. So I want to hear how did you, what did you say to your employees? Do you mean what kind of employees did you keep? And then who did you start calling on and what, you know, when you say pick up the pieces, what were the important pieces that you've picked up and how did you reinvent the vision? I mean for another eight years, that's substantial too.

Larry Armstrong: 00:35:38 Yeah. So it's a very, very different business model, but a couple of the key players of engineering, finance guy, manufacturing person. So ca kept a couple of key people for a while anyway in the business and really what I did, Ryan, is you know, what I kind of learned that hey, I got to talk to a lot more customers and so I started out in the electronics industry as far as talking to customers in that and started getting some orders for much smaller orders but start to get orders for these standard products that we had developed.

Ryan Tansom: 00:36:12 So did you, um, did you have enough for that cash to pay these people and then give a little bit of a run way for you to start bringing in the orders in?

Larry Armstrong: 00:36:20 Yeah, yeah. I've had some, some cash and uh, you know, I'd had some, some other resources to pull from and still was able to go get it going and push it forward. And like I said, we had a facility that we sold and things like that. So, uh, but it is a tough, it was a bumpy period, you know, it's a lot of hard work and uh, you know, we started selling products and, and um, you know, some good business, it wasn't, didn't reach the scale of the first, they're under the same name, but it didn't reach the scale of the first business by any means revenue wise.

Ryan Tansom: 00:36:54 What were some of the milestones for, you know, how many was it, you know, how diverse was your customer set and the revenue and employees and such. But by the time you hit your top peak.

Larry Armstrong: 00:37:05 Yeah. So on the, in the next iteration of the business, the uh, we had instead of one customer, I think we maybe had in one year, maybe 70 different customers and, but these were, they were buying a standard product and it was much, much lower price point and it was um, they needed it for automation projects. So they were building machines, different types of machines, but they're building, they're buying the framework of the machine from us. And so a kind of like, if you build a house, you'd bring in a framer and they'd frame in the house. So we were building machines, frames or machine bases, um, so just a much, much lower price point, but I'm still a nice little product. And so like I said, I, I worked at that, but it's a niche business. Uh, you know, we're national, we're selling to a bunch of different machine builders and we're maybe building each year a hundred, a 150 of these machine enclosures or machine bases. And so worked at that work really, really hard at that for eight years and just didn't see the, the growth in that industry for myself not being really connected to that industry but made a lot of connections, had a lot of good customers, did a lot of projects, you know, built I don't know 3,000 of these things over that period of time. And, uh, ultimately, uh, you know, made the decision that I need to, you know, get back into sales somewhere and do something different.

Ryan Tansom: 00:38:36 So where, you know, a couple of questions… is… how did you, did you have supplier connections, I mean, did the switch to that kind of product and you know, how did you look at that eight year journey? What kind of vision did you have for the business was, you know, here's, you know, I just want to keep this going or was it, you know, I'm going to use these relationships that I've built with these suppliers to and to, to sell more stuff. I mean, how did, how did you come up with that pivot and that vision?

Larry Armstrong: 00:39:00 I learned a lesson about the one customer thing. Um, I learned the lesson about not, you know, about going to competitors and not worrying about it. I learned quite a bit about, you know, manufacturing and other persons, pieces of the business. And so what I did was I kinda had a goal number in mind on, on revenue that I was going to build this business to a revenue goal. Unfortunately, I never got to that goal. Got close. But I didn't get there until after eight years of, uh, of pushing towards that goal and just not, not seeing me getting there, kinda throw, I don't want to say throw in the towel because a company, I think last year surpassed that goal that the company that acquired it surpassed it. So it was attainable. I just needed different resources to get there.

Ryan Tansom: 00:39:42 So were you, were you burnt out? Were you… What was the triggering event? Where were you, what, how did it come about?

Larry Armstrong: 00:39:50 Really where I was, uh, I was kind of an outsider looking in the industry. I didn't have the connections into some of the, some of the stuff that went in these machines. And so I really wasn't part of the club. Even though I was selling equipment, I wasn't really totally in the industry because I hadn't grown up in that industry or been in that industry. And so I kind of reached the point one day, you know, I didn't have a partner in the business. And so I think, you know, looking back on my earlier business success, having partners in the business was really, really critical, particularly for somebody that's more of a sales biz dev person like myself, you know, we don't always think of the things that you need to do to grow, grow businesses and we don't always make the right financial decisions because we're usually [Ryan interjects: opportunistic], opportunistic but we're also overly optimistic on a lot of things.

Larry Armstrong: 00:40:41 And so we go out and make commitments and do trade shows and, and do marketing things and hire salespeople and do a lot of things that, you know, we think the businesses are going to come and we don't really think it think it through well enough. So you know, burnt out yeah, you know, there was certainly an element of that. Ryan, it was a year over year of not hitting the mark. And so I don't know that there was a particular, a pivot or a, you know, any particular event. I just said, hey, you know, I've been doing this long enough. I'm not making the mark. I'm going to put the thing up for sale and see what happens.

Ryan Tansom: 00:41:16 So based on the couple of different experiences you had from these other companies, how did you approach that process? I mean it was there, I mean you said you'd had the big life lesson on the valuation, all these different things and you've gone, you realize what the one customer had done to you or how did you go about this entire process and finding the buyers and the people helping you?

Larry Armstrong: 00:41:37 Yeah, so this time I actually used a, you know, we're a small revenue company and so it wasn't a big, you know, big, sexy play for some big M&A firm. So I reached out to three different business brokers, talked to them, had that come in. They did their, you know, now I know, you know, looking back, they did their quickie little business evaluation, you know, each one of them has a different formula how they arrive at, you know, valuation. And so really I, I chose the broker that I had the best feeling in the best relationship with initially and I, that's who I went with. They're a little more optimistic on there, you know, the sale number and just, I just clicked with their process and the personality of the individual I was working with.

Ryan Tansom: 00:42:27 Did you have like an idea, a couple, you know, do you have an idea of who would potentially buy your business? I mean, the document…

Larry Armstrong: 00:42:35 Yeah, I did. Yeah. I kind of had a feeling that there's, you know, there's certain types of buyers that would be interested in this and they would, they would buy this company because they could, uh, it's kind of complicated to explain, but they would, they have supplemental products that can go on this big, kind of like buying a car without an engine and a transmission and they would be the people that would make the engine and the transmission. And so this would help them sell more engines and transmissions. So in my case, it's robots and vision systems and components for the automation industry. And so I had, uh, the company I had was building the frame for, for putting a lot of expensive automation on there. And so that's what I thought would be a good player or an individual that wanted a, you know, a nice little manufacturing business that he could manage and grow, you know, grow five, 10 percent year-over-year. And so that's, those are kind of the two types of buyers I thought would be interested in the business.

Ryan Tansom: 00:43:35 What did it matter to you? Either one?

Larry Armstrong: 00:43:37 Kinda, you know, I, I put a lot of time, a lot of money and a lot of effort into it. And so I, the, the important thing to me was that it wouldn't fail. Like the, like the first business that I sold, that, that really bothered me, that, you know, on unfortunately, you know, through an unexpected thing like a death, but also know proceeding the death was bad management and to, you know, really destroying a brand that was really a good brand. Had really good relationships with customers. And so for me, I, I put a tremendous amount of time and effort into this, this business. And so it was really important to me that the, the new buyer would, would value that and would understand that and would grow the brand within the industry.

Ryan Tansom: 00:44:19 So that was I think you kind of answered it because you said grow the brand within the industry. Was there certain things that you held in priority of making sure that, you know, was it the customers? Was it the actual product? Was it the employees? I mean, what did not failing mean to you?

Larry Armstrong: 00:44:38 Not failing to me was, was keep the business alive and keep it growing. Also me that, you know, when, when the enforcement closing the, my, my first business, to me that was really a, is to say that business should still be around today. That should be a premier brand in that space, regardless of whether I'm getting any financial remuneration for it or not. To me it was important because you're building something, you know, you've put a lot of time, sweat and energy into it. And so for the employees, yes, that's important, you know, and they certainly can find other places of employment, but it's, it's your creation. Right? And so you take a lot of pride and joy in that when you're, when you're doing that. And so that was, that was really pivotal to me as to find the right buyer for it that'll do something with it.

Ryan Tansom: 00:45:24 How many buyers did you vet through and how did you, um, how are they coming to the table and did you have multiple people at the table?

Larry Armstrong: 00:45:33 Yeah. So yes to all of that, uh, the, we had buy- as far as buyers. Uh, you know, I think I had at least 25 different individuals and companies, uh, it was kind of a split because it was a smaller, it was a manageable and I was willing again to this time I would finance just part of the business, but I was willing to do that. I was willing to stay on in some capacity. So I think I had probably about 25 different parties that, you know, went through the NDA process and got, you know, got in to the second or third round on the thing.

Ryan Tansom: 00:46:14 And were they all the different types of buyers? I mean, was there a certain people that, was there certain correlations that you saw that financial buyers are willing to pay more or less versus strategic buyers and like how did those couple of things impact your vision of it not failing?

Larry Armstrong: 00:46:30 Yeah, so one big block of it was just individual people that are either looking to get out of their w2 job and own a business and they wanted to be in manufacturing and it was, you know, the, the finances made sense. They could tackle it. So that was one group of them. Most of them did not have any clue of the space or what it was. Yeah. And then the second group was really manufacturing companies that wanted to get into the, the nationwide client base that I had. Even though we didn't have a ton of revenue, we had pretty good list customers and it was a manufacturing business so it would, it would add onto their machining and welding. And there are other manufacturing businesses. So get them into a different market and different customer base for a fairly low dollar amount.

Ryan Tansom: 00:47:19 Did that affect the price? I mean, beacuse you know the multiple of EBITDA and cash flow for financial buyer, who's going to take an SBA loan or something like that is different from someone that could get slingshotted into 70 national accounts were a multiple of EBITDA, might not be the right way to evaluate. I mean, did you, was there differences in that approach with using the program?

Larry Armstrong: 00:47:39 You know, the broker was, even though they're, they're good guys and all that, they probably still weren't the right choice, um, because they broker all types of businesses and in ironically at the last five or 10 potential buyers, I was managing probably about 95 percent of the process at that point. So it was, you know, if, uh, if there was a niche, a niche, broker that would cater more to manufacturing or technology or something that would've been a better fit than kind of a general purpose business broker that I used. But again, you know, I've, I've been through this process once in my life and I, I didn't, you know, I didn't know how. And again, you know, I'd run the business and I was trying to grow sales and trying to grow sales and at the time that I decided to sell the business, of course I didn't have all the, you know, all the finance stuff and all the inventory.

Larry Armstrong: 00:48:34 Everything was not really in a nice sweet package. But I had kind of said it's time to go and I'm willing to take the lick on this thing instead of really, you know, waiting another year or two and clean up the financials and you know, clean up the customer list and do all this stuff that you really, really should do to maximize value. I had reached a point where I said, I'll just go out and sell, you know, the difference for me for x hundreds of thousands of dollars in, in, in or whatever of, of net to me. I'll just go earn that instead of hanging around and, and do what really should have been done. You know, the, again, here's a Biz Dev guy running these businesses, but really not having the foresight to bring somebody in a year, year and a half before I made the decision to sell, to really clean some of that stuff up because that would have paid for itself, not just the stress and the 25 buyers coming in the door and all of that, but just in real hard dollars, you know, on the transaction.

Ryan Tansom: 00:49:35 What are some specific things that, you know, when you're saying clean it all up that you would've done or you saw through the questioning and due diligence that would've benefited it?

Larry Armstrong: 00:49:46 So just just having the really clean accounting stuff, um, you know, separating any personal stuff from the business for a longer period of time, some of the equipment purchases and some of the inventory that I had on hand. Um, you know, making sure that we've got the right valuation of the inventory, you know, maybe, you know, try to get one or two contracts or commitments from one of my customers that I had really didn't push for. It would have made a huge, huge difference from that standpoint, so, so really just just tightening up the things that any business owner should be doing anyway anyways, you know, understanding its customers better, you know, are they ever going to buy again from you? Where are they at in their purchasing cycles and then also on the, you know, just really, really good clean financials, making sure every, every expenditure that was in there and some of the things I was doing on sales and marketing, you know, even if it's $20, $50, $75,000 of spend that you're doing, if you're going to sell the company, really evaluate that a year or two in advance is that, you know, that might be something that will pay back in two or three years from now, but spending that $50,000 on a, you know, a couple of trade shows or whatever might not, you know, that that's going to look a whole lot better on your bottom line now or in a year from now than it would three years from now when you don't own the company.

Ryan Tansom: 00:51:14 Well, I mean I think it's a, it's a constant balancing act and a lot of owners deal with where do you deal with the cash flow and do all that stuff now and wait for the multiple return when you sell it or do you just deal with it now or not deal with it now? It's like that foot in the cash flow bucket and a foot in the future, you know, return on investment, cash out situation. When you were going through that, Larry, did, you said you were willing to stick around for a while and what fashion and what was that related to some of the stuff that you hadn't cleaned up? Um, and how, how was the deal structured from like cash earnout or promissory notes. I mean, um, you going through it a couple times already. How did you go into that? What did you want and how did it actually ended up coming out?

Larry Armstrong: 00:51:58 Yeah, so the, the ultimate purchaser was super strong financially is a drop in the bucket, so that must not a big deal at all. And so it was one of their first acquisitions that they had done and they were going to start rolling through acquisition. So, um, I don't want to say it was a test for them, but it was kind of like that. But they, yeah, there's, I think 75, eighty percent of the purchase price was in cash and then the rest of it was a one year earn out based based on results of what the company did in that next year and I was, I was kept around mainly again because I had the relationships with the clients around the country. This, this particular acquirer did not do business in a lot of the states that I did business in. And so I was there on board to do that. So I was compensated for that very fairly.

Ryan Tansom: 00:52:48 That's interesting. So how did you pick the buyer and it was their first acquisition and because what did you find any weird nuances or lack of because it was their first time?

Larry Armstrong: 00:52:59 Well No, they're, they're a 50 year old company. I actually worked with them, their local company and worked with them. They had a great, great, they have a great reputation in the industry. They sold the stuff that would go into the equipment that I, I manufactured. So just a highly respected organization, very, very solid financially, very good reputation in the industry. And so it just, you know, the guys that came in just felt right and uh, they just seem like this is the kind of guys that are going to take this business and they're going to move it along, they're going to move this thing forward, they want to grow it because it helps internally, helps them sell more product and, and uh, you know, they can take it in. It's not a huge financial risk for them to make this acquisition, uh, but still they move through the due diligence and the attorney side of this was fairly ridiculous for the size of the transaction and the lawyer's fees were probably a whole lot more initiative in a. But it was done right and clean and tight and you know, the money was there and everything was good.

Ryan Tansom: 00:54:01 How did, how did you guys value the business? Was a multiple of earnings or revenue?

Larry Armstrong: 00:54:05 Yeah. So I trust, I trusted my broker on that and it was there, you know, they have these formulas of, you know, revenue and EBITDA and, and you know, inventory and all that, you know, they come up with a number and, and I said, you know, unfortunately some of the worst salespeople are salespeople, right? So I said, fine. Instead of saying, you know, we should really go for 30 or 40 percent more or whatever. But. So I trusted the broker on that. Uh, probably, yeah, certainly left some money on the table. But again, here we go. Right. So I was ready to move along.

Ryan Tansom: 00:54:42 Well and you said the buyer felt right, which I think it's an intangible thing for a very specific technical situation, but I think there's a, there's a lot to be said about the trust and you know, lining that up with what you wanted. How did you go about telling your employees?

Larry Armstrong: 00:54:58 Ah, so they had, they had known ahead of time. We were a small group of people. They knew I was looking to sell the business. Um, I think they're fairly relieved. Nervous because unknown, you know, who's, who's the new boss going to be, but at the same time they knew that I wasn't probably suited to be the boss for forever. Right. And so to be their lead and so I only had a handful of employees so it was good. We're tight group of people and that was another part of the discussion and this, the eventual purchaser that was very important to them, you know, as it should be for any purchaser. Right. So that the team was very important and they, uh, I think, I think everyone, maybe one or two of the employees that I had are no longer with that, but I think the majority of them are still with that company. And this is, I think five years now.

Ryan Tansom: 00:55:48 So now that you're looking back and you're seeing this, I mean, is there anything you would've changed about how you went about it? Was there, you know, do you feel like it went the way you wanted it to or is there anything that you would've changed?

Larry Armstrong: 00:56:02 Uh, the only thing I would've changed, I, I, like I said, was I should have put more time into preparing the business for sale instead of getting to the point of I want to sell a. So that was really a critical piece probably staying in the business a little bit longer than I should have several years longer than I should've, but that's more of a personal thing than anything but just not seeing the year over year growth and, and so I should have waved the white flag a few years earlier and then started making plans to sell. And so the biggest change I would make on the next business would be really prepping it for sale and taking that time to make sure that it's really shiny and fresh and looking good for a buyer. And then understanding the valuation and getting, aligning myself with a, with a broker that really knows how to sell value, really understands the business or as well as you can and has a track record of sell on things, you know, over and above real base line, you know, formulas for valuation

Ryan Tansom: 00:57:06 is there, you know, speaking of life after, now that you said with the next business, what are the, what has life been like for you for the last five years? I mean, what do you got going on? I know it's, I know you got some really cool, interesting things that you're, that you're trying to tackle and why don't you kind of give our listeners a little bit of a glimpse into that?

Larry Armstrong: 00:57:23 Yeah. So after selling to businesses, not particularly well, now I thought I was an entrepreneur so I thought I could just do this, start up a start up a business here or there and I had to look at it in my pocket. And so, um, so I started a business in the transportation industry, building some equipment that – specialized equipment – and did that for a couple years and realized that that's even a much bigger industry than I've ever been in. Um, and then started another business sort of back to my equipment days, am I repaired and started a business that buys and sells used equipment, surplus automation equipment, manufacturing equipment, which I still have that business today. So we're mainly just buying and selling surplus equipment and inventory. So that's the main thing I've been doing for the last three years. And then most recently simultaneously launching a business in the freelancer, independent flexible work marketplace.

Larry Armstrong: 00:58:18 So there's a lot of these platforms, you know, most people are familiar with Uber and Task Rabbit and Upwork and handy and there's whole bunch of these platforms that match up freelance workers with our customers. And so we've, we've launched a platform that really, there's a couple things different. One is for all types of services, so it could be anything from things around your home to your business to consulting to website. So instead of going to a bunch of different platforms for, you know, maybe Uber to get a ride somewhere and Angie's List as somebody come and work on your house or one of these other ones to assemble furniture. Our thought is to have a universal services marketplace and then we have a very different revenue model, so instead of a huge percentage of the worker's wages, we have a membership model and so we just launched that platform about a month ago and I'm starting to see some traction and pretty excited about that. That's a much bigger, hundred x-times anything I ever thought I'd be involved with as far as size of market, a business, really seasoned business partner it cio, CEO level person. That's my business partner. That's, that's, uh, you know, very, very skilled on the technology side of it. So I'm staying in the Bizdev integrator side of this and he's on the technology side, so really excited to see where that one's going to go around.

Ryan Tansom: 00:59:41 So the, the Biz Dev guy that wasn't an entrepreneur is now a serial entrepreneur many times over.

Larry Armstrong: 00:59:48 Yeah. So this is the eighth or ninth, ninth one. And so we'll see most of them events, smaller niche businesses. And like I said, this, this last one here that I'm working on as a, it's a huge, it's a huge opportunity and I'm excited to be involved with it.

Ryan Tansom: 01:00:01 And how are you treating them differently based on the crazy amounts of experience and wisdom that you've grown over the last couple of decades?

Larry Armstrong: 01:00:09 Well, I'll agree with the crazy part. I don't know about the wisdom part, but um, as far as the crazy parts. So we're, we're looking at this. This business is way too big for two or three people. So certainly we're putting together a really neat team of individuals that can do the work. So this one's going to be a huge scalable thing. So first off we'll go on for um, investor financing on this one, Ryan. Whereas all my other businesses, I've been self-funded type businesses and this one is just the opportunity is way too huge to try to do that and we want to share it. So we want to share this business with the workers, the flexible workers and the customers or any actually anybody that wants to get involved in and be in this. Because this is, this kind of outwork is trending, so this flexible work, movement is really resonating well, particularly with some of the folks in your generation that want freedom and flexibility in their work life and not do the, you know, do the 10, 20, 30 years at one company or, or things like that that my generation did.

Larry Armstrong: 01:01:15 So, so that's really who we're appealing to and looking to say, hey, come alongside us, help us build this thing and it's for you guys, you know, we want wanna, we want to build a, we have the experience to build this thing, but we really want to build it with and for you. And so we don't want, we don't want to just throw it out there and tell you to sign up, we want to say, hey, we really value your important and let's, let's go build this thing together.

Ryan Tansom: 01:01:38 Nice. It sounds like you're having fun and I think there's a huge need for it to maybe we'll get another huge boom like you had with the dot com and the storage. Yeah. We'll see. When we look at, I appreciate so much all the different parts of the stories that you've brought to the table areas or is there one thing that you want to kind of leave the listeners with that we've talked about or maybe one that we haven't that you want to just leave everybody with?

Larry Armstrong: 01:02:02 So I'll say just from my personal experience, a couple of things. One in business, it's just really important, especially small businesses. Align yourself with some partners because the, the, the growth and the ideas and all of the things that you've done, you know, certainly stay in your strength, right? So I'm a biz dev guy and so stay in your strength, do what you do well and, and this is real common 101 stuff, but I've lived it and tried it and stepped over into the other places that I really learned a lot but probably didn't benefit greatly from. And if you're, if you're building a business or want to build a business is take the time before you get to exit and I see it and hear it over and over and over again. And so few of us really take it to heart when you decide you're going to exit, make sure you take the time before that to really go through, work with somebody trusted somebody that, that knows what they're doing to really help you prepare that business to sail, to exit out of that business because it just would make the process so much better.

Ryan Tansom: 01:03:03 I love it. And if there's one way that our listeners can reach out to, you know, sign up for a gihg because I know that's what's the best way to get in touch with you.

Larry Armstrong: 01:03:12 Yeah. So, so my personal email for the company that I'm working with, his gihgs was, which is g i h g s dot com. So it's a little unusual and the spelling and there's a meaning I could find that on our about page. So my email is Larry.Anderson at gihgs dot com and can also find me on Linkedin, Larry Anderson in Minnesota and you know my cell phone numbers typically on my website stuff. And so, uh, I'm, I'm available, I'm out there. Be glad to connect with anybody, chat with anybody certainly like to swap stories about business.

Ryan Tansom: 01:03:49 Love it. Larry, thank you so much for coming on the show.

Larry Armstrong: 01:03:52 OK, Ryan. Thank you. Appreciate it.


Ryan Tansom: 01:03:58 Thanks for sticking in there for listening to the entire episode with Larry. I learned a ton from him and I think there's some huge takeaways that we can all have as entrepreneurs. The first one is do the hard work that is necessary with the largest client of yours to make sure that you protect yourself, the terms and conditions and everything that you've built from them making a decision of shifting gears because it's worth it for your sanity and also worth it to make sure that your business is valuable and transferable, even if you have a large concentration into one customer.

The second thing is that making sure that you prep and do all the hard work necessary to build a valuable business before you're running out of energy or before the industry changes so that way you can pull the trigger on an exit whenever you want to the person that you want and doing that prep before you run out of energy will give you the rate of return on the business that you deserve.

And the third takeaway is you know your business and you know your industry a lot better than most people, if anybody else, so whether it's a business broker, an attorney, and investment banker or anybody that you get involved on your team, make sure that you trust yourself and you understand the value to a financial buyer versus a strategic buyer because you are still the boss and tell that whole situation closes. So I hope you enjoyed the episode. If you'd like to go on to itunes and give us a rating. Otherwise I will see you next week.

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Written by Ryan Tansom

Ryan Tansom

Ryan runs industry-specific podcasts on his website which pertain to mergers and acquisitions, and all the life lessons he wish he had known then. He strives to bring this knowledge to his listeners in a way that is effective and engaging by providing new material each week from industry experts.

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