Building a thriving business from scratch is just but the second most difficult task for some pool and spa business owners. The hardest task of all is successfully handing it over as you head for retirement. It’s a scary task, especially after sacrificing a lot and caring for it. It is without a doubt you’d like it to survive and continue growing.

There are many similarities between a family business and a child. A family business is like the birth of a child and its guidance to maturity. It is always a secret wish for every owner of a pool and spa business that one of their children will take over the business. This is to give the parent-owner a smooth, beneficial transition into retirement.

Most parent-owners have had this dream despite the various challenges like family conflicts, non-interested or even unable children.

Currently, a third-generation family-owned pool and spa business, Jet line Products, is one firm that has managed to undergo a successful transition. The results have been satisfying results for both generations. The retiring generation made away with good proceeds from their years of hard work. On the other hand, the new generation maintained important positions in a new era.

Warren Feder, an associate at Carl Marks Advisors, an investment bank that guides middle market companies, led the team on this successful sale. From his experience in facilitating sales of family owned businesses, he has valuable advice for family owners interested in a successful transition while maintaining family bonds and still enjoy the fruits of their efforts.

Family dimensions can complicate the operations of a family business. Based on statistics, most family business hardly makes it to the third generation and if they do they very few go beyond that. It is an uphill task to work through a family’s challenges and the challenges of a business both combined.

Many family business owners headed for retirement believe the best solution is to sell the business. The business should also operate separately from the family, even though this may not be their first instinct.

Jet Line is a pool equipment distributor established in 1971 by the Epstein family. By early last year, it was in its third generation of ownership.

There were different family groups with varying objectives. For the second generation, several siblings wanted to exit and cash out. On the other hand, for the third generation, three of them, Andy, Josh, and Brett Epstein, were seeking different opportunities the business could present. They wanted to grow the firm.

To reach an amicable solution, they held meetings and tried to keep the issue as confidential as possible. However, word leaked, and to their surprise, POOLCORP, their biggest competitor, reached out in response to the rumors.

After much persistence, POOLCORP eventually got to have a meeting with Jet Line. The meeting turned out to be a turning point for both companies. The meeting ended in a deal, and the company was finally closed at the end of September. The deal was satisfactory for both parties where Andy and Josh Epstein joined the new company holding senior positions, and the second generation siblings cashed out from the sale proceeds.

Helpful advice on a successful sale

From the successful Jet Line sale, Feder highlights some vital lessons to facilitate the sale of a pool and spa business, specifically a family business. The first point is to limit the players involved. One member is the most preferable. If you involve equal players with an equal say, it will make it difficult to get to a deal.

Secondly, get good advisors and allow them to do their work. Let’s face it; very few family business owners know how to sell their companies. You may need market experts and people who know how to structure deals.

The third element is the firm’s record keeping, and financial system as the buyer needs proof of its profits and revenue. Purchasers can send in their accountants to validate your figures. If you have good figures, it makes it easier to strike a deal; however, it makes the process a bit challenging if you have bad figures.

One of the biggest challenges in a pool and spa business sale is that expertise and experience lie with the management looking to cash out and leave the business. This makes it hard for the buyer to grow the business successfully. At this point, procedures, systems, organization, and having experienced people for management come in as an advantage. You need to know how the business will run after your exit unless you sell to an experienced buyer. In some cases, the owner can stay for a 2-3 year period to oversee a successful transition.

Covid Symptoms; Business Weariness

Covid has altered everything just like in every area of finance and economy, in business sales and acquisition. Feder reflects on 2020 events as increasing the pace of activity.

Many older people suffered from Covid, which may be a huge turning point in the pool and spa business industry. Even though a number of people escaped this harrowing experience alive, several people opt for their health and lives compared to business. As a result, according to Feder, it is an expectation that more families will be open to selling their businesses earlier and stay to facilitate a successful pool and spa business transition to avoid health risks when aged.

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