The business of selling Businesses: Stressless, Successful and profitable with Sarah

I had the chance to connect with Sarah Goodman, Managing Partner, President & Co-Founder of Eminence M&A Strategies.

For nearly 20 years, Sarah has worked with public and private companies, in a range of leadership capacities. Following an accomplished career with a firm contracted with numerous Fortune 100 brands, Sarah got started in M&A as she launched her own successful acquisition project.?

Sarah has experience closing buy-side and sell-side M&A transactions, leveraging her own search, acquisition, and business ownership experience as well as accomplishments in the public and private sectors across a wide range of industries.??

Sarah is active in multiple professional organizations, including the Association for Corporate Growth (ACG) Austin/San Antonio NextGen, ProVisors, Austin Business Woman, and W Connect, among others.? Sarah is an active philanthropist in the Austin community, including as a Hat Trick Society Member with the 4ATX Foundation, the community outreach arm of the Austin FC MLS Team.

Q: Tell me about your business and what separates you from your competition?

A: Eminence M&A Strategies stands out as a boutique M&A advisory firm, offering tailored, concierge support to lower mid-market companies, with revenues ranging from $5 to $100 million. We pride ourselves on providing a service that goes beyond mere transactions; we view our role as critical stewards in ensuring the continuity and growth of businesses beyond the tenure of their current owners. The businesses we support are vital to the economic and communal fabric, and our mission is to facilitate deals that not only honor the seller's past efforts but also pave the way for future opportunities.

I'm optimistic about the future, envisioning an industry that embraces more cooperative and beneficial practices, significantly improving the bleak statistic that currently sees over 70% of businesses unable to sell. There's a wave of change being ushered in by a new generation of M&A professionals, and it's exciting to be part of this transformative shift.

Q: How do you build culture, relationships, and teams inside and outside of your organization?

A: I believe in creating an environment where team members feel confident to take the lead, explore new ideas, and learn from mistakes without fear. This philosophy often leads to remarkable passion and outstanding results, as people achieve amazing things when they have a leader who clearly articulates a vision, supports their endeavors, and clears obstacles from their path. The joy of being the catalyst for such achievements is immensely fulfilling for me and builds a strong, aligned positive culture.

Externally, I dedicate much of my time to networking and community engagement. Building relationships and understanding the unique strengths of those I meet allows me to effectively connect individuals and resources to fulfill specific needs or goals. I thrive on being a connector and contributor, which alone is so rewarding, but my hope is that it also demonstrates leadership in giving and building to others in my network.?

My passion extends beyond my company and profession. I am deeply committed to shaping a brighter future, which is evident in my philanthropic efforts and investments aimed at enhancing the lives and economic prospects of children. This commitment involves financially backing companies that open doors for underserved or underrepresented communities, or organizations like Backpack Friends, which ensures children have food over the weekend. My husband and I are supporters of the 4ATX Foundation, which leverages soccer's unifying power to foster thriving communities and a new generation of leaders – socially, emotionally, and physically.

Q: Who or what has influenced your leadership ethos?

I see each day as an opportunity to surpass the person I was the day before.?

A: My leadership ethos has been shaped by a diverse tapestry of influences, composed of various experiences and encounters. This includes lessons learned from exceptional teachers, coaches, mentors, friends, and managers throughout my life. It’s not just the positive examples that have left a mark; the less favorable experiences, such as challenging bosses, difficult personal relationships, and witnessing unsavory organizational politics, have been equally instructive, highlighting who I aspire not to become.

Like many, I've encountered my share of adversity, from problematic leadership to personal and professional setbacks. These experiences have played a significant role in molding my approach to leadership, reminding me that I, too, have likely been the source of challenges for others at different points in my journey.

My leadership philosophy is rooted in the principle of continuous self-improvement and evolution. I see each day as an opportunity to surpass the person I was the day before. Witnessing others achieve greatness inspires me to believe in my own potential to do the same, propelling me forward with renewed vigor and determination.

Q: What are you expecting out of 2024 and how will that impact your business?

A: In 2024, our focus is on ramping up educational initiatives. We're organizing in-person workshops and panels, and I'm seizing every chance to contribute to articles, podcasts, and industry events. Our goal is to elevate the understanding and significance of exit planning and demystify the lower middle market M&A process.

I'm dedicated to nurturing the next generation of entrepreneurs, speaking to business school and law school students, first-time founders, and those acquiring businesses, as well as supporting peers who are driving change in the industry, like Josh Levine at Private Market Labs, or fellow Leadership Ethos-ian helping Main Street companies Eric Grafstrom at ExitGuide.

Reflecting on the M&A sector in 2023, it was a year marked by significant shifts in the capital markets and banking sectors, impacted by unprecedented pandemic-era capital injections, inflation, and labor market issues. The collapse of Silicon Valley Bank and First Republic, along with federal policy adjustments to manage inflation, led to a substantial slowdown in M&A activities, reaching a decade-low in deal volume and values.

This period of adjustment was necessary for recalibrating valuations and interest rates to more sustainable levels. However, with a consensus among economists predicting a 'soft landing' from these turbulent times, we anticipate a resurgence in M&A activity in 2024 as the market stabilizes.

Despite this and a late 2023 rebound in M&A activities, several factors could affect the landscape moving forward, including broader refinancing challenges due to increased interest rates and lower valuations (for businesses and real estate), a growing federal deficit, upcoming elections, and the broader implications of a consumer-driven economy faced with reduced credit access and savings.

For Eminence M&A Strategies, these broader economic conditions suggest an increase in deal volume in the coming year. However, ensuring the completion of high-quality transactions will remain a challenge. Particularly in the lower middle-market segment we serve, many business owners may find themselves exiting not out of desire but necessity, due to an aging owner population.

Q: How did your diverse professional background, including experiences in oil & gas, real estate, and entrepreneurship, shape your leadership style and ability to navigate rapid changes?

The diverse experiences from my career, although seemingly unrelated, have honed my ability to adapt swiftly and maintain resilience in the face of rapid changes and challenges.

A: Growing up in a tight-knit community along the Texas Gulf Coast, where the local economy was deeply intertwined with the refinery and chemical industries, has profoundly shaped my approach to leadership. Working in the field, clad in fire retardant coveralls and a hard hat, and experiencing the intense realities of oil well emergencies, has granted me genuine empathy and connection with the business owners I serve. This firsthand experience in such a demanding environment allows me to truly understand the challenges, the workforce dynamics, and the pressures my clients face.

In the fast-paced world of advertising, I navigated the complexities of meeting tight deadlines, solving logistical nightmares, and upholding the brand integrity of Fortune 100 companies. The agency environment, akin to a duck gliding smoothly on the water while paddling furiously below the surface, taught me the art of maintaining composure under pressure. Handling urgent calls from key parties of Fortune 100 companies, rectifying shipping mishaps, and delivering crucial RFP presentations—sometimes within the span of an hour—equipped me with the ability to manage almost any situation that comes my way.

In M&A, there's a saying that any deal worth pursuing dies at least 5 times before reaching the finish line. The diverse experiences from my career, although seemingly unrelated, have honed my ability to adapt swiftly and maintain resilience in the face of rapid changes and challenges.

Q: How does your current space support your company’s goals and your hiring initiatives?

A: The transition to our new office space in 2024 marks a significant development for Eminence M&A Strategies, moving from a fully remote setup to a physical location that aligns with our operational goals. In collaboration with CBRE, we found an office that not only accommodates the needs of Eminence M&A but also supports my husband's entrepreneurial ventures and our joint family office. This strategic move was guided by the desire for scalability within our business complex, offering an inviting campus with excellent amenities that contribute to our efforts in attracting and retaining top talent. Moreover, the office's location near coffee shops and tacos was absolutely essential, ha!

For Eminence M&A, our focus is on enhancing the quality and efficiency of our transaction processes, which won’t require additional headcount. However, CieloWorks, our rapidly expanding technology venture, required a workspace that could adapt to our immediate and future growth needs, potentially accommodating swift expansion over the next five years. The guidance, expertise, and -let’s be honest- counseling provided by our CBRE team were instrumental in securing a space that not only meets our current requirements but also anticipates our future needs, ensuring that our office environment fully supports our companies’ objectives and hiring strategies.

Q: What do you work for and what do you do for fun??

A: I work for our community. I'm deeply motivated by a sense of community service, which might sound cliché, but it's genuinely at the core of what I do. This perspective was greatly influenced by a mentor who introduced me to the concept of Ikigai—a Japanese philosophy that emphasizes finding joy, fulfillment, and balance in life's pursuits. While Ikigai has become somewhat of a buzzword among influencers, truly embracing its principles transforms the very nature of work, aligning it with what one loves, excels at, and can positively contribute to society, all while earning a living.

At the helm of Eminence M&A Strategies, and in partnership with my husband at CieloWorks, we strive to foster connections and make meaningful contributions through our business endeavors. Our mission statements reflect this commitment to impact and community service.

Travel and soccer are my go-to leisure activities – you can catch us at Q2 Stadium for most Austin FC home games, and we’re already planning for the 2026 World Cup. With two young daughters, our family time is precious and prioritized, and we cherish these early years through shared experiences. This includes annual camping and beach trips, and summers spent in Vancouver, BC—a city that holds a special place in our hearts. These moments of exploration and family bonding are not just fun; they're an integral part of who we are and what we value.

Q: What are some key considerations you take into account when evaluating investment opportunities?

The presence of strong, visionary leaders capable of steering a company towards growth and success cannot be overstated.

A: When assessing investment opportunities, the foremost factor I consider is leadership. The presence of strong, visionary leaders capable of steering a company towards growth and success cannot be overstated. These leaders are not just at the helm of their business; they are also architects of a positive and dynamic corporate culture. This combination of leadership prowess and the ability to cultivate a nurturing and motivating environment is pivotal. It's the driving force behind a company's success and, by extension, the profitability and sustainability of an investment. In essence, investing in a company is as much about investing in its people, particularly its leaders, as it is about the business model or market potential.

Q: With your expertise in sales and profit acceleration, what advice would you give to small business founders or entrepreneurs looking to optimize their sales strategies and drive growth?

A: Don’t Sell – Solve. To small business founders and entrepreneurs aiming to refine their sales strategies and foster growth, it's crucial to shift the focus from traditional selling to genuinely addressing customer needs and facilitating their success. Rather than pushing products or services, concentrate on understanding and solving the problems your customers face or helping them achieve their objectives. This approach not only enhances customer satisfaction but also fosters loyalty and referrals, which are invaluable for sustainable growth.

Iterate & Build Processes. Building a business culture that values continuous improvement and adaptation is equally important. Implementing foundational processes and systems can significantly enhance the efficiency and scalability of your operations. Adopting a structured framework like the Entrepreneurial Operating System (EOS) can provide the necessary tools and strategies for alignment, accountability, and growth, ensuring that everyone in your organization is moving in the same direction toward common goals.?

Find your Tribe. If it's the SMB Twitter community, a cohort with an organization like Entrepreneurs’ Organization, Women Presidents Organization, or NAWBO – entrepreneurship can be very lonely, and having a peer group to share experiences and resources can be a critical support structure on the rollercoaster of business ownership.??

Profit is Important. It's normal for businesses in their early stages to experience periods of low or no profit. However, laying the groundwork for a profitable and efficient operation from the outset is essential for long-term success and value creation.

Q: As someone who loves data and technology, can you share some examples of how you have utilized sales enablement tools and technology to drive results in your career?

A: Throughout my career, I've leveraged data and technology to enhance efficiency and drive results across various roles:

Mortgage Underwriting Audits: In a position where I was responsible for conducting post-closing underwriting audits, I faced the challenge of generating numerous technical reports. By automating parts of the report generation process, including data entry and questionnaire completion, I was able to double my monthly report output. This efficiency gain was achieved through the adaptation of existing templates and the strategic use of automation tools.

Oil and Gas Industry: While working in the oil and gas sector, I discovered that a specific photo application could detect wear and tear on submersible pumps that were not visible to the naked eye. This early detection of potential "wash-outs" — which can be both destructive and hazardous — allowed for preemptive maintenance and problem-solving, enhancing safety and operational efficiency.

Agency Operations: During my early days in an agency with a DOS-based ordering system, I encountered difficulties in mapping customer business segments due to the system's limitations. By teaching myself Visual Basic, I was able to extract and organize data into a more accessible format. Utilizing Excel, I then analyzed business lines, identified key customers, and assessed project profitability, thereby uncovering valuable insights that were previously obscured.

Software Development for a New Revenue Vertical: Recognizing the need for a specialized software solution in one of my roles, I collaborated with developers and gained managerial support to create a niche application. This software automated the collection of residential addresses and other data, streamlining operations and significantly reducing manual touchpoints. The result was a dramatic reduction in labor hours and enhanced customer satisfaction, coupled with a new revenue stream and competitive advantage.

These experiences underscore the transformative power of technology and data in optimizing work processes and enhancing productivity. As we continue to witness advancements in machine learning, natural language processing, and other digital tools, the potential for innovation and efficiency in various industries is immense. Just as historical inventions like the steam engine revolutionized productivity, today's technological tools hold the promise of driving significant progress and creating new opportunities.

Thank you for contributing to this series, Sarah.

Eminence M&A Strategies offers complimentary consultations and an opinion on valuation for business owners. We have a roster of third-party valuation experts if we need a certified valuation.?

In 2023, we completed consults with over 100 business owners in a no-hassle, pitch-free experience. We engage a small number of perfect-fit clients for seller representation - so while this is the first step of that potential path, we are proud to provide our insights to owners, even if we're not the perfect partner for them.

And thank you @zilkermedia for making this newsletter possible!?

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