Business Owners of Growing Businesses Explore Their Options

One of the best aspects about selling businesses is visiting business owners for the first time and seeing their operation.  Yesterday one of my partners, Graeme Plant, and I flew into the Carson Valley of Nevada to visit two companies. 

I fly a Cessna 210 that I use frequently for business, so after picking up Graeme as his local airport we flew directly over Lake Tahoe and the Sierras.  I was a little nervous about the trip because there was a chance of thunderstorms over the mountains and the forecast was for strong winds in the afternoon.

The winds were already fairly strong at 11:00 am, and I had to lower my landing gear to slow down in turbulence once we started to descend after passing the last ridge.  We rocked and bumped down to Carson City, and landed without incident.  The only problem was that I told the business owner to meet us at Mountain West (which I got out of a pilot’s guide), which turned out to be a fuel pump island, not a terminal building. 

After some looking around, we met up with the business owner and went for lunch, then a tour of his business.  Like many businesses in Nevada, this business is a transplanted California business.  As he explained, not only are the tax benefits compelling, but he was able to build custom facilities for a fraction of the cost of building where he used to be in California.  An added bonus is that the Carson Valley is a great place to raise kids.

His business is growing and since it involves rebuilding equipment for extended use it is recession resistant.  However, managing a growing a business is stressful and he increasingly has to travel for extended periods of time.  He wants to "take some money off the table" and continue to work.  For a profitable, growing company like this, that is possible by selling a portion of the company to a private equity group.

After our visit, about 3:00 pm, it was time to head south for a seven minute flight to Minden, Nevada.  I was prepared to cancel, but since the winds were blowing and not howling I decided to go.  Winds were blowing 22 knots at about a 30 degree angle to the Minden runway.  Besides, I need the practice in landing in a crosswind.  It turned out to be a good landing, although I had such a wicked crab angle on approach that made me wonder why I was there.  Graeme said he also wondered why we were there.

As a young engineering I worked in Minden Nevada, so it was good to visit the area although it has changed a lot since the 80s.  The company owner we visited also was transplanted from California, and seems to enjoy living there.  His company can be labeled a “green” company and is also growing rapidly.  His needs fall more into the venture capital area.  Graeme is an amateur venture capitalist (also known as an "angel investor"), so he knows quite a bit about the northern California / northern Nevada VC activity.  We talked quite a bit about how to raise money while I also kept an eye on the clouds building over the Sierras.

Sometime after 5:00 pm, we finished the meeting and got back into the airplane.  The buildup over the mountains wasn’t too bad near Tahoe, although there was definitely thunderstorm activity to the north.  We took off from Minden and went east for a bit while I climbed to altitude.  I wanted to stay away from the mountains while I climbed since there can be powerful rotor winds on the downwind side of the ridges. I accidentally flew into one of these once for one of the worst experiences of my life.  Once I got up to around 10,000 feet, I aimed for a 7,000 foot pass and we bumped along over Lake Tahoe.  It was rough, but not dangerous.

The next step is for us to do some further analysis of financials, come up with an opinion of company value for these owners, and then see if we all agree on a way forward to meet their goals.