What I Learned First-Hand About Buying a Printing Businesses

I had no idea what was in store when I began trying to purchase Vomela Specialty Company from my father in 1985. Little did I know how many twists and turns would occur during what we first thought would be a straightforward process. And even the end result wasn’t what I had envisioned when starting the process.

In my present role as a business strategist and consultant, here are six real-world lessons that I share with clients who want to sell their businesses

Background

Before my father stepped aside from the daily operations of Vomela, he led a total restructuring of the business. He wanted to make sure it was well-positioned for future success. He put me in charge of running the business. At the time, our gross margins and profits were off the charts.

In my mind, the next step was as simple as it was obvious: I would buy the business outright.

But it didn’t take long for me to realize that the process would be far from simple. The lessons I learned during the 5-year sales process shaped my future with Vomela, my eventual departure, and led me to where I am today.

Here are six harsh truths I pass along to anyone who asks me for advice on selling a business.

6 Lessons I Learned the Hard Way

Lesson 1: Access to money really matters. I entered the buying process seeking sole ownership of Vomela. But money—or lack thereof—quickly crushed that dream.

If I wanted to purchase the company, I needed a financial partner. That’s when I was introduced to Tom Auth.

Tom was a financial expert with experience. He had already bought more than 15 successful companies by the time he entered Vomela’s radar, so he knew the game.

Lesson 2: Don’t let emotions guide your decisions. Follow the money. With my long-standing devotion to Vomela, my decision to buy it was emotionally charged. I wanted to carry on my father’s family legacies. I wanted to please all of the family stakeholders. And my passion for business and personal ambitions and dreams were tempered by fears of failure and anxiety.

But for Tom, buying Vomela was just another business deal. My father instilled in me the values of risk-taking and gut-listening, but Tom took a more pragmatic approach. He followed the money. Tom saw Vomela’s potential and wanted in.

Lesson 3: The deal might not play out exactly as you expect. After careful consideration, my father decided to sell Vomela to Tom and me in a 60/40 split. I went from dreams of independent ownership to the reality of being a minority shareholder. It was a tough pill to swallow.

Lesson 4: Bankers will have a say in how the deal comes together. Once I had accepted that I would be a minority shareholder instead of a majority owner, I realized that I still didn’t have enough capital to purchase my share. So, I went to the bank. That’s when I (once again) realized the value of being surrounded by the right people and having access to money.

Lesson 5: Don’t underestimate the significance of relationships, credibility, and personal guarantees in business. Had I entered the bank as just “Rock LaManna,” the bank might have turned me down. But once the bank learned that Tom Auth was involved, that was all the credibility the bank needed to approve my request for funds.

Lesson 6: The majority stakeholder might not share your long-term vision for the company. By the time I obtained the necessary funding, Vomela was humming. We had increased our staff from 35 employees back up to 120. With Vomela’s success and my newly acquired capital, finally everything was in place and it was time to seal the deal with my father.

Three years after we officially purchased the company, Vomela continued to flourish. Sales and margins were at an all-time high, and our investments were booming.

While Tom controlled our finances, I ran day-to-day operations. Naively, I believed I would always be part of the package. But in 1993, Tom shattered that illusion when he asked me to sell him the rest of the company.

Wait, what? I wasn’t interested in selling my share of the company to Tom or anybody else. I had worked at Vomela for 17 years, for crying out loud!

But after realizing that I couldn’t compete with Tom financially, I eventually reached a stage of acceptance — but not without a fight. I was no longer a rookie in the world of buying and selling companies. I had learned that being strategic was key to getting the best deal.

So, I took a three-pronged approach:

  1. I hired top-notch independent experts different from those who had guided Tom and me when we bought the business from my father.
  2. I sought emotional guidance to get me through the selling process and post-close transition.
  3. I ordered a valuation. First, the valuation told me what the company was worth. Then, it identified benchmarks that indicated where Vomela needed improvement.

Over the next 19 months, our leadership team continued to grow the business. So when I returned to the negotiating table with Tom, I was ready to act.

The payoff? Tom’s final offer was five times higher than his first offer. How could I refuse?

Because I was only 39 years old, and nowhere near ready to retire, I needed to follow through on the transitional plan I had been developing during the sales process. In the end, I decided to stick with the field I knew best by becoming a consultant in the print and converting industry.

By the time Tom and I closed our deal, I was already working for my new consultancy, the LaManna Alliance.

One of the first things I recognized was that Vomela would need expertise in raw materials after I left. So I cut a deal with 3M to resell their raw materials to Vomela at a discount rate. Then, I structured the deal with Tom so that I was named Vomela’s raw materials supplier.

In other words: before I left Vomela, I convinced Vomela to become the first customer of my consulting practice.

Since then, I have advised hundreds of clients, most of whom wanted to acquire, grow, or sell a business.

In 2020, I re-branded the LaManna Alliance as the LaManna Consulting Group, so I could spare business sellers the time and effort required to build a team of experts of their own with experience in different facets of selling a business and instead present them with our own vetted, carefully cultivated team of experts.

Today, when I introduce clients to potential buyers, the LaManna Consulting Group has helped prepare them for all of the surprising emotions that might cloud their thinking before and after a deal.

When the seller has a clear vision of what to expect during and after the sale, the process goes more smoothly. Plus, the seller can help the buyer’s integration strategy team ensure a smooth and productive change in ownership.

Call me if you are interested in getting warm introductions to educated business owners who are far more prepared than I was about the ins and outs of buying and selling a company.