Issue link: http://psai.uberflip.com/i/1299190
ASSOCIATIONINSIGHT Portable Sanitation Association International News BIWEEKLY EDITION OCTOBER 14, 2020 Page 4 Continued on page 10 When a Portable Sanitation Company Sells…continued from page 3 Company Sale Number Two Initial scenario: A well-established company was sold by the retiring owners to an individual with little experience in the industry but with other successful business ventures. The company had well-trained and experienced route service drivers, managers who had progressed through the company, and an excellent administrative and sales team. The retiring owners took these facts into consideration when establishing a sales price for the company and went so far as to tell the new buyer that they had done so. Circumstances at hand-off: Having been successful in other businesses, the new owner made absolutely no changes in the business for the rest of the year (the purchase was in the July–August time frame). During this time, the new owner "learned the business" from servicing to routing to selling to billing, and also became familiar with the transition from "busy season" to "winter season." As the new year began, he slowly started to implement new routing software, GPS in the trucks, and an easier and more efficient billing system. The company continues to flourish today after roughly five years under new ownership. Analysis: The retiring owners and the new owner all considered the employees as the heart of the company. The new owner took the time to understand the current processes and procedures as well as to build rapport with the team. When the new owner's changes were implemented, they improved the efficiency of the company and assisted the employees in making their jobs easier. Company Sale Number Three Initial scenario: Two local companies merged, with one owner being the majority stakeholder and the other owner accepting a minority ownership position. The combined company became the largest portable restroom firm in its market. Circumstances at hand-off: The two new co-owners selected and protected their best employees and released everyone else at the start of the joint business. Shortly thereafter, the majority owner apparently felt he was being unnecessarily challenged by the minority owner in terms of service procedures, pricing, and benefits. Within three months or so, the minority owner quit as did the key employees from his former company. Within a year, the majority owner turned around and sold the company. Analysis: The merger of these two companies in the same market neglected to consider the cultural, personnel, and management differences between the two firms. As a result, business planning did not include a discussion of how these things were going to be addressed in the combined company. The owners were focused on total numbers of units and relative size in their market. Their failure to address cultural and personnel issues created suboptimal outcomes for everyone involved. "Always treat your employees exactly as you want them to treat your best customers." —Stephen R. Covey