Two entrepreneurial visionaries recently passed away, Joe Coulombe and Amory Houghton. Joe Coulombe was the founder of the Trader Joe’s grocery store chain. Mr. Coulombe looked at the products offered in supermarkets and recognized there was an opportunity to offer healthy, tasty, high-quality food marketed to a younger demographic of customers at competitive prices through generic branding and direct purchase from the source. Today, Trader Joe’s is a popular shopping venue to a broad demographic group in communities distant from Joe’s first store opened in Pasadena, California in 1967.
Amory Houghton was the former CEO of Corning Glass Works. Corning, known for manufacturing the Pyrex measuring cups and Corning Ware casseroles found in almost every kitchen dominated the U.S. market for the glass used to encase TV tubes early in Mr. Houghton’s tenure as CEO, which started in 1964. However, by the mid 1970s, Amory recognized that the tubes accounted for approximately 75% of the company’s profit and that a significant threat existed for the company from Japanese imports. Mr. Houghton had a choice, stay the course with product mix or innovate and diversify the product line. Mr. Houghton elected to identify new potential marketplaces and successfully identified the potential of fiber optics and the opportunity for Corning Glass Works to produce the hair-thin strands of glass that would be used to replace copper wire in the transmission of voice and data communication. Backed by secured patents, by the late 1990’s optical fiber and related telecommunications products accounted for more than half of Corning’s operating profit. I would suspect that many people reading this blog article today are accessing the information through Corning fiber and should thank Amory Houghton for his help in creating the Internet Superhighway.
The COVID-19 experience will likely have a long-term influence in the entrepreneurial community long after the virus has been placed next to the Spanish Flu of 1918 in the history books. I anticipate that many entrepreneurs have spent time thinking as they were forced to cocoon at home about their existing business models and potential business models relating to how they can improve and enhance delivery of products and services. Many industries because of the Coronavirus will likely have dramatic evolutions. An easy example is education, the COVID-19 situation identified many weaknesses related to the delivery of virtual education. I anticipate over the next few years products & infrastructure to address these weaknesses will be created by the business community and offered to the marketplace.
IBA has a long history of facilitating sales of companies that have created better “mousetraps” or that provide an opportunity to buyers to build on a profitable foundation in a new or creative way. A few examples from our history of over 4000 successfully facilitated transactions include Northwest Biomedical Associates (http://nwbiomed.com/) which starting in 1990 identified that engineering staffs in hospitals were being reduced and there was a need for outsourced calibration and repair of medical equipment ranging from autoclaves to anesthesia machines. Another example is American Retail Supply, https://www.americanretailsupply.com/, a company with a national reach and multiple state distribution network that supplies all the products needed for retail and Ecommerce other than the merchandise. A very profitable business at time of sale, the company operated with a business model with highly knowledgeable, proactive customer service representatives who engaged weekly with an established customer base, but with limited online marketing outreach looking for new customers. The technology industry entrepreneurs who acquired the company identified this shortfall and have expanded market presence for the company online proactively. A final example is Natural Pet Pantry, https://naturalpetpantry.com/. The founders of Natural Pet Pantry identified in 2000 that there was an opportunity to provide higher quality, natural pet food that was closer to the natural diet of dogs & cats. Customer demand and revenue for the products progressively increased over the tenure of their ownership, but like many entrepreneurs the founders were ready to explore different opportunities and elected to put the company into the hands of a buyer with the ability to continue “best practice” stewardship of the brand and company. My 15 year old Weimaraner, Santorini, is an enthusiastic Natural Pet Pantry consumer and can attest to the benefits of the product over dry kibble.
If you are the owner of a business that engages with the marketplace in an innovative way or that offers a platform for innovation and would like to learn more about the process involved with selling your company, our experienced, knowledgeable team of highly skilled professionals would welcome the opportunity to learn about your business and provide an overview of our services. IBA operates with a paid on performance business model, so no fees or retainers will be requested until we successfully complete a transaction on terms you find satisfactory. IBA for 45 years has only been paid by customers happy with our performance, many who are retiring and receiving the well earned fruits that resulted from the vision and execution as entrepreneurs.
IBA, the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media, business brokerage, mergers & acquisitions, and real estate communities on subjects relevant to the purchase & sale of privately held companies and family owned businesses. IBA is recognized as one of the best business brokerage firms in the nation based on its long track record of successfully negotiating “win-win” business sale transactions in environments of full disclosure employing “best practices”.