Banking & Finance

Firm assists ‘left coast’ businesses with buying and selling

Former SBDC business and finance consultant starts exit planning firm.

January 26, 2018
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Eric Seifert once needed to sell a business he co-owned. He later realized it would have been an easier transition with more advance planning.

Now, the former banking executive and consultant at the Michigan Small Business Development Center (MI-SBDC) started his own firm to help Muskegon small businesses plan for that scenario.

In August, Seifert opened Left Coast Capital at 297 W. Clay Ave., Suite 101, in Muskegon.

The firm specializes in helping owners of companies with less than $10 million in annual sales to retire or sell their businesses within five years or less.

Left Coast Capital also works with established companies seeking growth capital — including SBA loans, senior debt, revolving credit facilities, angel investments and private equity.

Seifert brings four decades of experience as a business consultant and commercial banker — including at Old Kent, Fifth Third and Community Shores banks — to his new one-man operation.

“I have no employees but a lot of strategic partners,” Seifert said. “I have developed a model that’s different than any other business brokerage house. I use the resource of my fellow business brokers.”

When clients hire him, he helps them determine their long-term goals, identify the valuation of their businesses, then finds potential buyers and brokers a deal.

During that process, he works with his network of attorneys, consultants and wealth advisors and splits his fees with them.

Some clients are several years away from being ready to sell. Others are closer to the finish line.

“If they’re ready to pull the trigger now, I call the brokers in my area who I have been working with the past 30 years to see if there’s a similar deal that was done recently,” Seifert said.

“Often, if a buyer is hanging in the wind ... one that’s already talked to a bank, that shortens the time window.”

Seifert stays informed about potential buyers before his clients are ready to sell. He said this helps him “hopefully do deals quicker.”

One of his biggest catalysts for getting serious about exit planning was a personal experience, Seifert said.

In 2006, he bought Unified Health Partners, a home health care business in Muskegon, while he was working at Community Shores Bank. Out of necessity, he sold the business in 2013.

“I purchased it for my wife when I was in banking,” he said. “She was a registered nurse and had worked for the company previously. We grew it from 50 employees to over 200. She became ill and couldn’t run it, and I didn’t have time, so we had to sell it.

“That was a very valuable lesson. I didn’t have a plan or contingency plan for selling.”

Before selling Unified Health Partners, Seifert in 2011 started working for the MI-SBDC.

“MI-SBDC was when I first started working with exit planning,” he said. “Previously, I was working with buyers looking to finance the startup or purchase of a business.”

After a decade serving mostly lakeshore clients at the organization, Seifert noticed a dearth of exit planning businesses in Muskegon, so he decided to start his own firm.

“A lot of times, West Michigan businesses like to deal locally,” he said. “I’ve been doing business here 40 years, and my family 40 years before that. So, I’ve got 80-some years of history, and that carries a lot of weight.”

Left Coast Capital is open to serving small business owners in just about every industry except restaurants and bars, which require a different specialty, Seifert said.

He already has begun working with “metal benders and fabricators and service businesses like IT” and also plans to target the home health care industry, given his experience there.

So far, Seifert has closed three transactions for tool-and-die and machining businesses and has another pending deal with a web development company slated to close at the end of January.

Selling a business is, in some ways, not unlike listing a home for sale, Seifert said. There are things sellers can do to sweeten the deal. With homes, the list includes painting, remodeling, re-carpeting and improving curb appeal.

With businesses, efficiently structuring human capital — the management team and employees — and maximizing the customer base are steps owners can take to “tweak the value of the deal and get a higher price.”

If the business is family owned, the exit planning process also will include discussions about the succession plan.

“Sometimes, there’s a family member that expects to buy the business, and that’s not always the best solution,” Seifert said. “Another time, a parent wants to sell to an adult child, but that child isn’t ready yet to take the helm. Then there’s arranging for the financing for the family buyout. A bank has to be involved to extend those funds.”

Seifert said his connections in banking and experience as a lender help him secure financing for clients.

“When you have a buyer approach a seller, if I can help facilitate the financing, that helps the deal go much smoother,” he said. “That’s where the bulk of my career has been, working in banking, specifically SBA loans, and I generally know where to go to source the loans. I generally go to three banks at once to have a good selection to decide on.”

Seifert said the M&A market is favorable for sellers right now, with many companies looking to acquire other business to gain access to their equipment and skilled labor.

Emotions can get in the way of transactions at times, Seifert said.

“You’ve got a seller that started the business from scratch and built it over 20, 30, 40 years, and now they’re going to sell and what will they do after?

“Then you’ve got a buyer trying to get the best possible price, and they’re pointing out every little pimple or inconsistency in the business, and the buyer is in effect telling the seller his baby is ugly.”

For that reason, Seifert acts as an intermediary, initiating separate conversations with the seller and the buyer.

“When an owner decides to sell his or her business, it’s usually a big investment of time, money and emotions,” Seifert said. “(My) approach helps owners realize their personal and financial objectives without having to make the sale process a full-time job. (I) tell clients, ‘We’ll run the deal so you can run your business.’”

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