Entrepreneurial Achievement in a COVID-19 World

Aug 17, 2021

The NFL preseason started this weekend.  One game of personal interest was the matchup between the Indianapolis Colts and Carolina Panthers featuring two young quarterbacks, Jacob Eason and Sam Ehlinger. Jacob Eason was a local high school phenom, 5 Star #2 Pro Style Quarterback in the nation, while Sam Ehlinger led my alma mater, The University of Texas, with class and skill under center for four years. This weekend both men were placed under the bright lights for the first time as potential NFL quarterbacks.  I am happy to report both, although experiencing some rough patches, rose to the challenge and appear on course to be on the roster of the Colts, potentially with one starting the first game due to Carson Wentz being injured, when NFL teams cut down their roster from 80 to 53 on August 31.  This twenty-seven person drop in roster size can offer an equally cruel reality to rookies trying to make a team and veterans trying to hang on for another year in their profession of choice.

The world of small business ownership has experienced its own cruel cutdown period due to the COVID-19 pandemic during the last eighteen months where both new start-ups with significant thought and capital expenditure and long-established businesses have been forced to close their doors due to an one hundred year public health event and government regulations beyond their control.  Staying with the football comparison, I would consider these closures akin to getting cut due to injury or a change in scheme (e.g., 3-4 defense to 4-3).

However, like in tryouts to make a NFL team where players make teams based on performance in practice and games, there were also many entrepreneurs who based on business acumen, experience, and execution were able to survive and frequently thrive in a COVID-19 world.  I would like to take a moment and recognize this amazing achievement in an unfamiliar and challenging business environment.  As the oldest and largest business brokerage firm in the Pacific Northwest, IBA has been blessed to have a “50 yard line seat” throughout the pandemic with the ability to review financials in real time and interview players throughout the game receiving regular recognizance from the field of play.  The following are four characteristics we have identified of successful executive management during the pandemic:

Ability to Improvise & Adapt with a Business Model – COVID-19 created many paradigm changes in how business is conducted.  Business owners who failed to evolve failed.  In one urban restaurant we sold, the business created a walk-up window to facilitate exterior access to customers when hesitancy to eat inside existed.  This straightforward modification today has created a larger take-out segment for the business than in prior years, even with customers able to return to the community favorite establishment for a table service meal and beverage.   In other companies, we saw complete reformulation of business models to address community needs and reap financial rewards from deployment of available resources.  Two client examples were a distillery that pivoted to manufacturing sanitizer and a textile company who converted their manufacturing floor to make eight figures of masks for healthcare workers and the public. Today, both companies are out of their pandemic production mode and successfully back manufacturing their high quality products for loyal customer bases.

Superior Supply Chain Management – For years pre-pandemic just-in-time and lean inventory management were areas of emphasis for executive management trying to efficiently utilize capital resources.  COVID-19 was a hurricane of bad outcomes for companies with these polices that did not evolve processes to reflect the building storm conditions quickly in 2020.  Conservatively managed companies that had inventory backstock, strong relationships built over years with suppliers, or annual or large quantity purchase contracts in place continued forward without impact and in many cases picked up market share and customers by being able to provide products quicker and at better prices than their competition.  IBA has witnessed revenue and profit growth partially due to superior supply chain management in client companies ranging from manufacturers of candles to the sale and installation of backup power generators to a roofing company with sufficient plywood in their yard to weather the short-term shortage and price spike in that foundational building material.

Human Resource Acumen – Human resource staff with support from executive management have been the business world equivalent to health care workers during the pandemic.  They have been asked to work long hours, problem solve, and manage resources on a “war footing” in a constantly changing environment of government regulation none of them had ever experienced previously.  The best were able to maintain a positive corporate culture and strong company productivity during the last eighteen months. These individuals should be recognized and their value conveyed with raises and promotions.  Today, these same people are navigating a difficult employment market to facilitate hiring and continued company growth.  One IBA client just hired nine employees from a competitor that is closing their doors, creating a more talented, manufacturing team than has ever existed in the company’s history.

Location Assessment – COVID-19 has produced many business fatalities.  Some of these deaths were inevitable and simply sped up in timetable by the pandemic, others were cases of a bad things happening to good people.  The outcome of these corporate deaths has been space availability that did not exist at the end of 2019 creating opportunities for facility enhancement or expansion by successful companies.  Low interest rates and favorable market conditions have also created opportunities for businesses to purchase real estate and evolve from being a tenant to a property owner.  It is not anticipated that the quality, commercial real estate opportunities on the market presently will last long.  In an inflationary period like we are in now, it is always superior to have fixed occupancy costs and to own real estate.

IBA is able to share these business management success strategies and stories because of the quality of the businesses we represent for sale.   We are honored to frequently be the main street and middle market business sale intermediary firm of choice in the Pacific Northwest for many entrepreneurs wishing to sell their privately held companies and family businesses.   We are selective of the projects we take on, as our 100% paid on performance business model does not work if we are not completing transactions.  In Q3, we have already completed over $20 million in transactions with thirteen additional deals in escrow pending sale for the next couple of months.  The business brokerage marketplace remains robust with many quality buyers pursuing acquisition opportunities.  Our knowledgeable, experienced double-digit team of highly skilled business brokers is presently looking for new projects.  Please contact us, if you would like to receive an overview of our client services, if you successfully weathered the COVID-19 pandemic as an entrepreneur and are experiencing revenue growth in 2021, you are likely in our preferred client demographic.

IBA, the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media, business brokerage, and mergers & acquisitions community 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”.