What Happens After You Sell the Business? Adam Trainer on Identity, Wealth & Life After the Exit (#200) — Transcript
THE PICTURE OF WEALTH · EPISODE 200
What changes when the business you built belongs to someone else? Former Grizzly Lodge owner Adam Trainer returns to talk with Dustin Serviss about selling to an outside buyer, navigating diligence and finding a new rhythm with money, family and identity after the exit.
Listen to the episode
This transcript was generated from the episode audio and lightly edited for readability. It may contain transcription or speaker-attribution errors. Refer to the recording for exact wording.
Transcript
[00:00:04] Dustin Serviss: Alright, listener. This is a special podcast. This is a repeat guest, Adam Trainer, who used to be the owner of a place called Grizzly Lodge, which is a snowmobile in camp. It's basically north of Scotch Creek in British Columbia. He was on episode ninety four where we talked about what it's like to run this backcountry lodge and the constant triage that that entails with it. But what this episode is about is Adam sold the business. It's official. It's public knowledge. And I wanted to get Adam to explain or break down a real world example of what it's like to sell your business to a third party buyer.
[00:00:44] Dustin Serviss: So not someone you know, not someone you're transitioning it to in your management team, but actually going through the process of selling your business. And he does get into it. I'm not gonna give away any of the details right now, but I will say that he did sell to a form of private equity and a buyer, and so it's a little bit more of a complex deal. And why I thought it's important to many listeners who are business owners is the sheer unknown of selling to somebody you don't know and what that process is, and we can get paralyzed and not take action when the market is telling you it's time to take action.
[00:01:21] Dustin Serviss: And, again, I'm not advocating two or four selling a business. Everyone is different. But at the same time, if you are having pangs of wonder or curiosity, but you don't think you should go through the process or you don't know what the process is, Adam does a great job of keeping everything confidential that's supposed to be confidential about his deal, but he shares the step by step of what he went through and the thoughts that are going through his head. Enjoy.
[00:01:56] Adam Trainer: Yeah. I guess, lots of things have changed. That's for sure.
[00:02:00] Dustin Serviss: Most important, is your wife happy now that you're home?
[00:02:03] Adam Trainer: Oh, yes. Yeah. Maybe... I wouldn't say I'm home too much, but I'm home a lot more than I used to be. That's for sure.
[00:02:10] Dustin Serviss: Adam Trainer, thanks for coming on the show. This is a repeat version of of meeting you and coming... You're coming to us... Where are you coming to us from?
[00:02:19] Adam Trainer: I'm coming to you from home Grand Forks, BC in
[00:02:22] Dustin Serviss: Love it.
[00:02:23] Adam Trainer: I've been here about four years now.
[00:02:25] Dustin Serviss: I love it. You... So you owned Grizzly Lodge, which is a backcountry sled thing. Again, listener, you can go back in the episodes, and I will leave in the show notes what episode it was. But Adam and I discussed the courage and the commitment to start a backcountry ski lodge and what that story looked like. But today, what I wanted Adam to break down was for a entrepreneur who's considering changing businesses. It's not a secret. A new buyer came in and bought Grizzly Lodge and took it over. But a little bit of that unpacking... So for you, Adam, the first sort of question comment is, how did you emotionally get yourself ready
[00:03:08] Dustin Serviss: to be in a position to go to a meeting and say, I'm up for sale? Because that is a big sort of... It almost gives me anxiety kinda thinking about it for many business owners out there because it is part of their identity. It is part of so much time and energy. So maybe start us off with that.
[00:03:27] Adam Trainer: Yeah. I think I certainly had some anxiety around it, but I've been... The thought in the back of my mind had been rolling around for a couple years previous to me actually sitting down and going, k. I'm taking the first step. So I kinda set myself up with managing my expectations a little bit. It wasn't... I had a bad week and this is the moment. It was certainly, I would say, over two, three years leading up to taking that first step. I think the challenging part is when everything's going good, you feel like maybe you're making the wrong decision to sell, and yet that is when you kinda need to.
[00:04:08] Adam Trainer: It's pretty hard when things are going bad to sell your business.
[00:04:13] Dustin Serviss: Yeah. Such a... And any of the business owners that I meet with or work with, it's... What do you mean the multiples only three times my earnings or or five? Because why don't I just stick around for three to five years, and I'm gonna make the same amount of money? Which for you, that... What was that thought of... I don't wanna put words in your mouth, but what was the thought of envisioning yourself on the other end of the transaction
[00:04:38] Adam Trainer: that
[00:04:39] Dustin Serviss: helped push you over the fence?
[00:04:41] Adam Trainer: Yeah. Yeah. I think my my approach was, although I graduated the business to being fairly independent operationally on a day to day basis, the weight of operating and being responsible for that business, I was certainly starting to feel more and more primarily having a young family at home and it demanding a fair bit of my attention and time, especially throughout the winter months. So as my family grew and I... The years slipped by for me at Grizzly, I just started to feel like I need to look at this a little differently. And if that means selling to free me up for, especially my young kids, It just became over over those couple years, I
[00:05:27] Adam Trainer: was kind of mentioning that I became comfortable with this idea of going, on the other side, I'm gonna have more time. I'll have some time to reassess what my life looks like financially and my time commitments. And my primary goal was to be at home more rather than traveling back and forth and back and forth.
[00:05:46] Dustin Serviss: What about the identity piece? Not to get all woo woo on you, but was there a sense of... I remember when we first met, I was a guest at the lodge. Oh, man. Badass Adam, Sledder, backcountry owner. That's who I... That's all I knew. I know you a little more now, but at the time, that's what I envisioned as your identity. So what... How did you digest that?
[00:06:08] Adam Trainer: I think that's honestly still in process. I don't think you can necessarily anticipate as a business owner when you sell what exactly it meant to you until the day of when the transaction's done and the following weeks, months, and perhaps years ahead. I certainly as went... Going to make the public announcement at the lodge to some guests that were there and those statements I made. It certainly hit me a lot harder than I thought it would. Yeah. And I'm... Now this is... So February first would have been the official day we... The deal was done. We're some months away here. And, yeah, I'm just starting to unpack who am I now.
[00:06:52] Adam Trainer: I know who I am. I'm pretty confident, but there's no doubt the lodge took a big piece of me or I gave it. So I think that's still yet to be determined over some time here on reassessing. Do I want my identity be going forward here for sure?
[00:07:11] Dustin Serviss: Yeah. I can definitely appreciate that and envision that this is just another challenge. This is like you've done really hard things, and you proved it at the lodge.
[00:07:23] Adam Trainer: Yeah.
[00:07:23] Dustin Serviss: That looking back two years, three years, five years from now, you're like, oh, that was another thing I had to overcome even though it feels like this is a never... I can never come back from this.
[00:07:32] Adam Trainer: Yeah. On that note, I was just thinking for grizzly to be as successful as it has been, there's no doubt I had to become... I had to live it, breathe it, eat it, sleep it, everything. I remember, I think it was about twenty twelve, I went to a personal development seminar, and I came out of that just with a new motivation. And for whatever reason coming out of that, I realized I had to dive in a hundred percent into Grizzly. And it was already operating and doing okay, but it was those years following twenty twelve that really things started to explode and become popular. And I just put my heart and soul into it.
[00:08:11] Adam Trainer: So now on the backside of that, I'm going like, wow. I I certainly cannot feel like it... There's a piece of me that's still a part of that, and yet that's a chapter that's closed now. We gotta start reenvisioning and dreaming again. Right? Because I know that whatever I put my hand to, I will succeed. At least that's what's in my mind for the future, but it's... There's still some searching to do there for sure.
[00:08:37] Dustin Serviss: Do you have it come in like, like, washing over your wheel? Like, kind of waves of, oh, man. This is uncertain. But then in other times, that entrepreneurial spark, you're kinda like, bring it on. I can't wait to see what's gonna happen next because it's probably gonna be good.
[00:08:52] Adam Trainer: Yeah. Yeah. No. I would agree with that statement. I think there's certainly an entrepreneurial spirit that lives within some of us, and it's almost a disease at times as I describe it because you can't help but see the world that maybe differently, opportunities differently, You look at things differently. So I'm excited about that side of it because now that I'm not tied to this grizzly lodge identity, I... I've got the world by the tail, really.
[00:09:24] Dustin Serviss: Yeah. That... And that... That's a very powerful... It's a powerful place to be in, and I will just... We'll see if I can unpack it a bit. So you... Financially, probably okay. You are roughly about the same age, I assume. So you have this big runway of time, though. So does it come back to you where you're like, oh, man. I got no cash flow. And so from a standpoint of month to month, your... You've got a... Maybe a big pot in the bank, but usually before you had month... Your big months, and you now are just eating into the pot.
[00:10:02] Adam Trainer: Yeah. Is that That's that's an uncomfortable... More uncomfortable anticipated. Yep. Financially speaking, I've always been very sharp, I guess, you'd say with financial decisions. And it's been a long time since I didn't have direct cash flow coming in. So regardless of a number you're sitting on, it doesn't matter. It's that when you see only out, that's that's an uncomfortable feeling that, I don't know, there's not necessarily a good immediate answer aside from, hey, you gotta be thinking six, eight, ten months down the road a year, whatever it is, of creating cash flow.
[00:10:40] Adam Trainer: And what do you wanna involve your life doing to create that cash flow? So that's certainly on my mind.
[00:10:47] Dustin Serviss: Yeah. That's... I think it's a good time to get it that one of the... Then I said it in the intro is bringing home... Now, again, share what you can that's within sort of the scope of your thing. I know I found a fair bit of stuff online of how the deal... And you guys are very transparent about the new owners of Grizzly. The new owners of Grizzly were not your right hand guy that worked with you for ten years, and he bought you out. The the buyers were a third party, not... I think I'm rather... Not related to Grizzly, really. And so for many business owners, when they have a business of grizzly size, if you have a a lawn mowing business and
[00:11:30] Dustin Serviss: it's worth three hundred grand, it's kinda easy for someone to maybe buy it or you do a deal or whatever. When you get into businesses of your size, they're not quite big enough for massive funds or life insurance companies, but there's a potential that private equity is maybe an idea to essentially buy a unique asset. And a lot of times, I find in practice, business owners... It's hard to quantify, and it sounds like a big undertaking to sell your business to someone outside. And so I'm keeping it real broad on purpose because I kinda wanna hear your experience of... And, again, share where you can, what that process was like and,
[00:12:12] Dustin Serviss: like, some of those... And I'm trying to put words in your mouth. But, like, at some point, you probably had to let the buyer have a visit with some of your staff.
[00:12:21] Adam Trainer: Yeah. Yeah.
[00:12:22] Dustin Serviss: And so, like, kinda cross that bridge. This is gonna get really fucking for real as soon as I allow you to talk to... Because I'm keeping all these emails confidential and phone calls, but this is gonna get real quick. So there's a open ended question for you to riff on what you Yeah.
[00:12:38] Adam Trainer: There... There's a lot there. It cut me off wherever you feel. The ball kinda started rolling when I sat down with my lawyer and said, I think I wanna sell. And that was the first big step. And I kinda... I've been working with him for a long time. He originally worked with me on the purchase deal, so I trust him. And I said, well, how do you do this? Essentially, what you're asking, it's a big... You don't just phone your cousin or put a Facebook marketplace ad up, and I suppose that could work, but the success rate is probably quite a bit lower. So I started with my lawyer and he recommended...
[00:13:14] Adam Trainer: I really think you should probably work with a firm that does this type of transactions. And you can choose to run a a public campaign or just something very private and see how that goes. So I ended up taking his recommendation and working with a a firm out of Kelowna that does mergers and acquisitions and that side of things. So that was quite a process. Really, from start to finish, I think we are well over two years from deciding where this is the direction we wanna go to working with this firm, coming up with a buyer's list, and keeping everything as confidential as possible. So there's a lot there.
[00:13:53] Adam Trainer: Do you want me to go a particular direction? Or
[00:13:56] Dustin Serviss: No. Just keep go... Like, just... And this is just my brain, but keep... I like what you did with the lawyer of the timeline of how you processed it through. And so almost keep going on that timeline of you met a lawyer. You told them. They told you to get a firm. And what those steps were right to the point of, okay, the money's in your bank kind of process.
[00:14:18] Adam Trainer: So once I did some kind of initial interviews with this firm, out of Kelowna, a couple of their head staff in that department. And part of... As my lawyer outlined to me is part of this type of a deal is you wanna be really comfortable with the people you're dealing with that's helping you sell your business. If you don't get along and kinda have the same vision for the direction you wanna go and how you wanna handle a deal of this size, then you better do a little further searching, and find a firm that you feel like you're at home with. So it took a couple interviews and just kinda really dug into
[00:14:52] Adam Trainer: their method and how I would be involved, what decisions I'd be able to make throughout the process. And once I was comfortable on that end, I chose to move forward with them. And there was quite an in-depth process of just combing through the business, looking for all the good stuff, any concerning things, and putting a package together that we could push out to a a private buyer's list or potential private buyer's list. So that was six, eight, ten months of bringing all this information together. I thought I'd done a lot of administrative work. I was wrong. It was big load.
[00:15:31] Adam Trainer: And I was kinda mentally prepared for it, but just when you think you've got all your ducks in a row, these guys dig deep. They wanna make sure that when a buyer asks a question, pertinent. So it got real when we, you know, together looked at a buyer's list of names and firms they'd come up with, and then some other people I'd added to it of, that said expressed interest over the years. And then we did a push out, a teaser essentially that didn't necessarily say Grizzly Lodge, but just outlined some of the key business aspects. And then we... You know, that was kinda like, hey. Is there any fish fighting?
[00:16:13] Adam Trainer: And we got several responses back on wanting more information. So at that point, people would be signing NDAs to keep it private. And I think throughout this whole process, we basically boiled down to two interested parties and then worked between those two on price and some negotiation on what my terms would be. How long would I be hanging around for? Because that's a huge thing. When you finally got to this point of I wanna sell my business, do you really wanna be there three more years to hold hands? Or are you okay with twelve months? Or... So that that certainly comes into play.
[00:16:50] Adam Trainer: And you may think you're in the driver's seat because you're selling, but there's some negotiation to be had there because, as a business owner, you tend to bring quite a bit of value to the table.
[00:17:01] Dustin Serviss: You still haven't told in... Anybody yet, like, in house. Yeah. So you're Yeah. You're just gonna get... Because, really, we're just talking at this point.
[00:17:10] Adam Trainer: Yeah. And that's partially... That wasn't necessarily mandated or coached to me. That's partially how I like to do business. And maybe to a fault where when I say something's happening, really it's already happened. That's kinda my style. So I kept it very tight until we essentially signed an agreement with one of the buyers. And at that point, then I looped in my key staff, and just said, hey, guys. Working on this for a while. This may sound scary. This may sound big, but this is a direction we're going, and I think it's gonna be good for you guys, good for me. So that that was certainly, I guess you'd say a bit of a stressful time of...
[00:17:53] Adam Trainer: Because you really care for your team as a business owner or you should. Especially people that have helped you bring a business to this point. Right? So we moved ahead with a particular group of buyers and started work going through the due diligence process with them. And unfortunately, over three, four, five months or so, it essentially started to fizzle out. I started to get fairly anxious on this. Doesn't seem like it's going the right way. So we chose to go another direction, reach out to some other guys that we'd also been working with. And they really liked Grizzly a lot. So they jumped on it.
[00:18:29] Adam Trainer: And then once again, we started the process of due diligence again. And, fortunately, that was... Those are the guys that now own Grizzly. It was a good ride working with those guys. And
[00:18:41] Dustin Serviss: How much due diligence... So you did a lot of pre due diligence with your your team. I think this is where a lot of deals can get hung up is the seller is like, someone's coming to buy me. They can do the due diligence. I'm not gonna tell them. But you're not armed in a really good position as a seller to defend your thesis of the price because usually, you're gonna get knocked down for sure. Yeah. They're gonna try and knock you down. It's just the nature. So how much more due diligence did they do than what you would kind of prepared? Or what were the the nooks and crannies they kinda... Without being...
[00:19:17] Adam Trainer: Yeah. It's one of those things where as a seller, you kinda think, hey. Here's the basis I would... Here's the questions and the things I would be concerned about. But you don't know what's in the buyer's mind. And Mhmm. To no surprise, I guess you go, oh, wow. I never even thought somebody would ask that question. Legit. So there was just a lot of no major items, but there was a lot of small things that came up of what about this? What if this happens? What do you have in place for that? There were some policies and procedure stuff. There was some environmental side of things checking into if you have this environmental
[00:19:51] Adam Trainer: side of things looked after. Just some groups that perhaps you didn't have to do, but again, it changed going from the one set of buyers to the next. You're like, okay, this is what due diligence looks like. And next thing you're working with another set of buyers and you get fifty more questions and you're like, okay. It changes apparently a lot.
[00:20:11] Dustin Serviss: So you don't
[00:20:12] Adam Trainer: necessarily prepare yourself a hundred percent for what due diligence looks like. Some buyers are pretty carefree, and others are quite a bit more cautious.
[00:20:21] Dustin Serviss: I think, yeah, you'd have a lot number of different camps. You You got someone who's gonna roll it up into a whole portfolio stuff and sell that in two years is different than someone that wants to keep a legacy business for fifty years in their family.
[00:20:34] Adam Trainer: Yeah. Yeah. Exactly.
[00:20:36] Dustin Serviss: Okay. So we get the due diligence done. Some push pull on terms and price throughout the process, I assume.
[00:20:47] Adam Trainer: Yeah.
[00:20:48] Dustin Serviss: And what was the finale? What did you have to stay on for? Or what was... How did you view that bargaining chip? Because if you wanted to be with your family, that was obviously a motivator for you.
[00:21:02] Adam Trainer: Yes. I kinda came into this... The... These buyers, I guess, perhaps in a slightly weaker position because I was approaching them after working with some other ones. And kudos to them. They were very professional about it and didn't necessarily use that as a... Our offer was this, now it's way down here. He really respected the value of Grizzly and knew... I guess, they were pretty comfortable in working with me in proceeding with the deal as they'd originally offered. And one of the terms that, I guess, was fairly attractive to me was only a one year retainer, which involves a week a month during the open season.
[00:21:41] Adam Trainer: So really on paper, I have kind of November, December, January coming to spend some time up there and ensure things are fired up for the season and they're on plane. And outside of that, I'm free and clear unless the phone rings and they wanna write some big checks for help.
[00:21:57] Dustin Serviss: Yeah. So that's so that's sort of the transition we talked about, kind of the identity piece. And how do you find now looking at other opportunities, if you are looking at other opportunities, when you've had the experience of being profitable at Grizzly and running an organization above a certain size? When you look at other things now, how do you not poo poo them all with, oh, man, that's got no scale. That's this. That's
[00:22:29] Adam Trainer: That is a very solid question because I honestly didn't realize for some time, in recent years I realized, but in in first many years when Grizzly started to become quite successful, I kinda thought businesses just made good money easily. Not easy, but, like, if you put your time in and ran the business as best you could, you would get a good return. And turns out Grizzly is a bit of an anomaly in... It's not that easy to replicate that kind of cash flow and net profits in x amount of days. I don't wanna diminish my work there, but it's a really solid business. So now looking at opportunities, I certainly have went,
[00:23:20] Adam Trainer: you know, it's not bad, but it doesn't compare to Grizzly. That's not bad, but boy, I'd have to put in three... So that's... It's almost a little unfortunate because there... There's lots of good things out there, and it's not all about the money. And I have to remind myself of that. Yeah. If you're getting up in the morning excited about what you're doing and you're making an honest living, that's fine. You don't have to make x to measure up essentially. Right? But I guess tagging on to that a little bit in the the sale of a business, that's one of the most important pieces is that it is financially sound for several years.
[00:24:00] Adam Trainer: And a buyer can look at that and go, wow, I can pay myself a great wage, and the business is still well into profits and has to reinvest, pay staff more if they wanna keep them over time, whatever. But if it's... If it... If the business can only pay you a wage and it can't do anything more, it's really not a sellable business, honestly.
[00:24:20] Dustin Serviss: No. That's... I can't remember what they call that, but there's a book called The E Myth. And they say... Or the author is Michael Gerber talks about. If you can't leave your business for more than thirty days and it still is chugging along when you get back, then you really just have kind of a a fancy job. Yeah. Yeah. And until you can get your systems... And it's a systems book because it's meant to really inspire you to get your systems in place and be able to not have to be there as the owner. And... Okay. So we've talked about that. You you... Your sort of next biggest vision that you're most excited about is currently what?
[00:24:59] Adam Trainer: We're... As we're kinda talking off mic a little bit preshow, I did recently see an opportunity that came across the table. I I kinda took me off guard a little bit. So it was a rundown ranch not far down the road from us. And I was driving by on a Wednesday. I thought, I should look at that. I looked at it Thursday night, and the realtor said, offers are coming in Friday. Make up your mind. And I just couldn't resist it. And so there... So we did just buy a two hundred acre ranch that we're just started, you know, develop and get a handle on that. So I kinda grew up doing some farming ranching stuff, but never on a business side.
[00:25:39] Adam Trainer: So I'm actually pretty excited about taking this on, seeing what I can do with it. My mind already is on that entrepreneurial. Okay. This is costing me this. This is how many hours I'm putting into this. It's kinda arc there of... I don't wanna say I'm bored post grizzly, but it's... That's just how I'm wired, and I don't think it's healthy to sit around. A lot of people told me, take one year. Don't do anything for a year. Nothing. Don't make a decision. I don't know if that would have been good for me, honestly.
[00:26:10] Dustin Serviss: Yeah. I've recently moved my... I haven't moved my whole office, but I'm in my house, and I've been here for six years. And and I've started to go to an office downtown. And so just the act of going there and part of what you're saying is... Ties into that when you built a business, you had people around, you had a certain energy. And when you're... You got the check and you're like, okay. Great. My responsibilities are done, and now you're kinda like, I do what I want. But we're at a clumsy age to be just retired. So you don't have all the friends that can just take all the time off and do all the stuff that you're supposed to do.
[00:26:48] Dustin Serviss: And quite frankly, I don't know if you think this way. It's like, I kinda like to be busy with my hands. But the piece that was missing was people. And you don't realize that just the simple act of going into an office or maybe it's... You're gonna have people around the farm or whatever it is. It's like that simple act of a good morning, and then you don't even talk to the person for the rest of the day is way more powerful, I've found
[00:27:12] Adam Trainer: Yeah.
[00:27:12] Dustin Serviss: After being in... And the home office is great and has flexibility. It just... Right now, different season of life. It's just welcomed energy.
[00:27:21] Adam Trainer: Yeah.
[00:27:21] Dustin Serviss: Is there any closing thoughts if you were sitting down, listener for this podcast is predominantly business owner, successful? They've got all the the check marks of success, but there might be something out there that they haven't chased yet. Their picture of wealth is changing. What would you say to that owner about the thought of selling as a closing thought?
[00:27:48] Adam Trainer: Yeah. Obviously, it's a little different for each individual at the stage of their... In their life. I think if your sole motivation for selling is you're just excited about a big check, Nothing essentially wrong with that, but I shared a little story when I was reading my statement at the lodge, when we were doing the official announcement. And I remember logging into my bank account and checking to make sure the transfer had come through. And home screen, there's a number across the screen, your balance and your checking account or wherever it went. And then my first initial thought was, how empty is that? Coming from
[00:28:29] Adam Trainer: incredibly rich environment of Grizzly, thousands and thousands of customers from all over the world over the past. I've been out there almost twenty years, nineteen years. A ton of relationships and a a staff team that I've built for many years. Very proud of it all, and you trade that for a number. Not saying that's wrong, but it's... It just... It was kinda interesting picture for me of going, yeah. No. It's... It... That number could be ten x that, or it could be ten x less than that. And it wouldn't have changed the appreciation for the life and re... Relationships that I built over that time. That's really where the value is.
[00:29:09] Adam Trainer: So maybe you're selling for more time with your family. Maybe you're thinking of selling for a change of life. All great things, but don't do it just for the money. That would be my advice.
[00:29:19] Dustin Serviss: What a great great bookend. And, normally, in the podcast, I'll say, where can people find you and give your LinkedIn and everything? But I just love the beauty of you being your own free agent, and you just get to promote yourself to your kids and your wife.
[00:29:34] Adam Trainer: Yep. Yep.
[00:29:35] Dustin Serviss: Thanks, Adam.
[00:29:36] Adam Trainer: Hey. Appreciate it, Dustin. Perhaps we'll chat again.
[00:29:39] Dustin Serviss: I look forward to it.