The needs of one business owner are likely very different from another. Because of this, we will be flexible in terms of how we will partner with you. In general, there are three broad categories:
We Partner with Companies
in Different Ways
in Different Ways
We Partner with Companies in Different Ways
- Majority ownership with active day-to-day involvement from Day 1
- Majority ownership with increasing involvement during the owner’s transition period
- Advisory including capital raises
Even if we take an active day-to-day involvement from day 1, it is unlikely that our intention would be to overhaul the business. The principals at FPI have experience in a broad range of industries and have significant experience in setting strategy. Often though, the strategy will not change, just the tactics.
If an owner seeks to exit immediately, we will install a seasoned operator with experience running small businesses. We have vetted these candidates extensively and a seller would have the opportunity to meet the to-be-installed leader.
In almost all cases though, one key emphasis will be to increase revenue through increased sales efforts. Some companies in the size range we target do not have a dedicated sales person, let alone a sales team. Also, some business owners we talk to no longer have the motivation to pound the pavement in order to drive sales. That is where we step in.
Our intention is to buy and hold. We are not looking to “strip and flip.” Developing a sound exit strategy is typically preempted by succession planning. We will work with the current management team to develop the less senior ranks so that candidates are ready should a key leader retire or exit the business in some other way.
Exit planning is still important, though, and one path that will be pursued several years down the road is a sale of the company to an employee stock ownership plan (ESOP). Selling to an ESOP is particularly effective when selling a minority interest, which is likely not attractive to business owners who desire to exit the business more quickly. Regardless, our preferred holding period is at least 10 years. More info about ESOPs can be found here.
More About Our Team
What We Look for in Operators
If you are not a business owner but have experience operating one or more small businesses, we would like to hear from you as well.