How to Build a Strong, More Transferable Business
When it comes to selling a business, timing and financials matter—but true success starts with a sale-ready mindset. In this episode of Cascade Conversations, Cascade Partners Managing Director, Eric Green, talks with Craig Doescher, Founder and CEO of The Doescher Group, about how business owners can lay the groundwork for a successful exit long before a sale is on the horizon.
Together, they discuss why “sell-side readiness” is really just good business management, how professionals like Cascade Partners and The Doescher Group help strengthen operations and financial reporting, and when to begin preparing to maximize value. They also explore how investment bankers and fractional CFOs work together to help owners achieve smoother, more successful transactions.
Whether you’re actively planning a sale or simply looking to build a stronger, more transferable business, this conversation offers practical insights and proven strategies from both sides of the deal table.
Transcript
Announcer
Welcome to Cascade Conversations. Join the Cascade Partners team and our network of trusted advisors as we work to demystify the details, terminology, and strategies of acquisitions, divestitures, financing, performance improvement, and restructuring.
Eric Green | Managing Director of Cascade Partners
Well, good afternoon. Thank you for joining us in our next installation of Cascade Conversations. I’m Eric Green, the Managing Director here at Cascade Partners. Cascade Partners is a middle-market investment bank that serves clients with revenue ranging from $30 to $300 million in revenue—primarily privately-held, family-owned businesses are where our sweet spot is.
Today, I’m grateful that you’re spending some time with me. We’re welcoming a partner and someone who follows this market as well. Craig Doescher, the Founder and CEO of the Doescher Group, thank you for joining us.
Craig Doescher | Founder and CEO of Doescher Group
Thank you for having me.
Eric Green: Craig and I have come to know each other over the last year. We’ve had some mutual clients. I’m really excited to share with our audience what the Doescher group does on behalf.
So, maybe with that, I could ask you to share a little bit of your background and what Doescher Group does.
Craig Doescher: Sure. So, Doescher Group, we have a very simple mission: To level the playing field for self-made business owners. So, our focus, as is yours, is on the family-owned, entrepreneur-led business. And our kind of sweet spot is in what amounts to the fractional CFO kind of role, but with a particular focus on evolving businesses or exiting businesses.
So, we focus on businesses that are getting ready for [Cascade Partners] and also businesses that are wanting to think long-term about how to create value so that one day, down the road, they’ll be ready for that process.
Eric Green: Yeah, absolutely. And how about a little bit of your personal background?
Craig Doescher: Yeah. So, my personal background, I started as an investment banking analyst many, many years ago. And then most of my career has been spent with, startups, closely held family businesses, and then I spent three years at a family office where we were buying family-owned businesses. And that was really where the genesis of Doescher Group came from, was spending, years looking at businesses that clearly could have been better advised, and that was really where the idea came from; like, maybe we can create an opportunity for that. And seven years later, here we are.
Eric Green: Yeah, correct. Craig is an entrepreneur’s entrepreneur. So, I want to make sure that comes out.
We had the opportunity to work together on a client. We were engaged to do a sell-side mandate. We were very honored to win that business. As we went into that company and we started to amass materials and the things that we would normally do through an investment banking process, we realized maybe they just weren’t ready. They were ready psychologically, but not physically ready to go through a sell-side process. And we called Craig and his team, and that seemed to work very well.
When you got into that company, what was your reaction and what was the plan of attack to help them get prepared for that sell-side process?
Craig Doescher: So, we say, one size fits one. So, we really, have designed our firm around, in some ways, not being scalable—which is one of the things we teach our clients to do, is be scalable. But the reality is that each individual client has their own goals. They have their own things they want, and their business is a means to an end, right? There’s a million reasons why a business owner is in business. And so we’re really trying to understand that.
But when it comes to being prepared to sell a business, particularly if they’re looking to go to a broader market process, there is a number of things we do. And usually the first place we start with a client is what we call our Field-Ready Assessment. That’s really the place that we like to start with clients.
But sometimes—as we say “one size fits one”—they’ve got some another pressing need. So, in the case of that client, there was a need to look at doing some balance sheet refinancing. So, they had kind of some expensive debt on their books, businesses performing better. So, that’s kind of the first place we’ve started with that client. And then we’ve got the Field-Ready Assessment kind of cued up, once we get that figured out, because, as we as unlock some of that cash, the question now is: What do we invested in to be ready for the for the sale process?
Eric Green: And I will say: you and your team did an unbelievable job. Even some of the basic routine things we would expect a from a business, like forecasting and pipeline, you really helped them build that out. So, as we transitioned from your work to our work, it was really seamless and helped us get going in the process to articulate the value that they had.
Craig Doescher: And I realize, now you’re talking about that, there’s a second example. So that [first] example is exactly correct, which is we can scale what’s needed. In this case, what they really needed was to be able to have a better view of where the business was heading with the pipeline, what business are they chasing, what’s the probability of winning that? And then also converting their financial statements from a cash basis, which is really just focused on deposits and when you’re actually spending money on vendor payments and, paying payroll and so on to an accrual basis, which is the way that businesses are really looked at when it comes to the selling process.
So, we were able to go through that process and take those financials and convert them. And now, expect to continue to help support that process as you guys go to market.
Eric Green: Well, thank you. It’s been great. That was an example where we received the mandate and we saw the need for your type of work. In general, when should people and companies start thinking about sell-side preparation?
Craig Doescher: I mean, it’s self-serving to say, but from from the moment you start your business. I really think that. And Ryan on our team says this a lot—and he says it more eloquently, than I do: “If you are running a company, you should be preparing it to sell.” And why? Because it’s just a better company to run. The things that a buyer is going to see as valuable in your business are the same things that make your business less stressful, less risky. They’re going to let you sleep better at night.
There’s often the analogy of someone who’s getting ready to sell their house, and they walk a realtor through the house. And—not to speak down to an investment banker because they’re not realtors—but when the realtor does walk through your house, they say, “Hey, it would be really great if you fix this, if you change the tile here, if you did that…” And so, then you go and do it, and then you put the house on the market. And as soon as you’re done with that project, right before you sell the house, you’re like, “Man, I should have done this five years ago. I’m enjoying living in this house.“
And that is really the reality. So, we have a lot more millennial and Gen X clients that are thinking that way. It certainly is a generational shift that we’re seeing. My phrase is: it’s never too early and it’s never too late to start planning for that exit.
Eric Green: That’s fantastic. Yeah. We use sell-side readiness as a as a term here, field-assessment readiness. But it’s very self-serving because I’m in the sell-side business. But I want to just build on your point, the steps, the processes, and the procedures you put in place for a sell-side, doing that, even if you don’t want to sell, will enhance the value of your business. So, it’s just the right thing to do at any time.
Craig Doescher: Right. And and just one more thing to add: The reality is that most businesses, if you’re lucky to be in the minority of people that build a company, that can be transferred—because most businesses are going to be liquidated, they’re going to be sold for the parts. If you’re in that lucky minority, you’re likely going to be selling to a third party. Once again, this is cultural shifts. Finding a family member, or employee, or someone else that wants to take on that obligation of ownership is getting harder to do just generationally.
However, if you do want to pass it generationally, my argument would be it’s even more important to prepare to sell because you’re transferring it to someone in your own family. You’re not just selling it to a third party that you have no prior connection to.
Eric Green: Right. So, I asked about timing. What about an ideal type of company? I know you’re hyper-specialized like we are, but have you found patterns of companies that are better positioned to take on your services?
Craig Doescher: Sure. So, industry-wise, we’ve worked in a variety of industries and outside of something highly specialized, like biotechnology or something like that. We’ve found that the principles are pretty applicable broadly. It really comes down to more of a psychographic of the owner. So, the mindset of the owner is just really key. And that is coachable, teachable, wants advice, is willing to change. Like these are kind of basic ingredients that make an advisor’s role valuable because, sure we can get compensated for our work if someone doesn’t take our advice, but it’s not fulfilling for us and it’s a waste of money for them. So, that’s a big piece of it.
I would say like in terms of your size range, we can definitely skew lower because our goal is to take businesses that might be considered more in the small business range and help them get to that lower middle market range where they’re really an investable company. So, we do work with companies with revenues, even as small as $5 million or less.
And once again, it just comes down to the mindset of the owner. Like, how are they thinking about this business? Because they might be doing $2.5 million of revenue right now, but they’ve got a path to $20, or they got a path to $50, and they’re seeking out that advice now because they want to make sure that they build the foundation right.
Eric Green: Yeah. Well, maybe for our audience; we’ve had a couple engagements together and it’s worked really well. How do you view the investment banks and integrating in our work? Because some might say, “Well, Cascade, isn’t that part of your job; to get us ready? Aren’t you supposed to be doing those things? Why do I need another advisor in there?” So, I wonder how you view the relationship with the investment banks.
Craig Doescher: It’s extremely mutually beneficial for the client to have both. And the reason why is we’re the resource that is the temporary internal resource at the client. Whereas the investment bank has an entire infrastructure built around running what is often a quite high volume process. There’s a lot of relationships and communication that you guys are experts at handling, and we’re not.
And so, where we’re able to integrate is we know the information that you need in order to build the best marketing materials. We can answer the questions as they’re coming through when you have lots of interested buyers. Our client is usually just not suited to answer those things. They can talk about their industry, they can talk about how they make what they make, how they provide their service, about their great people. But oftentimes, it’s a question of “Why did your month-over-month margin change by half a point?” And they’re like, “Why are you even asking me this question?” So, we answer those questions before or before they even get to them.
So, it often becomes a relationship where I would say 80+% of the communication that ends up being a frustration between the investment bank and the entrepreneur is handled through us, and we become that intermediary. And we also are able to answer a lot of the questions proactively. So, by the time you’re really getting engaged, we already kind of have like 80% or 90% of the information collected and ready to roll.
Eric Green: Yeah, which is a huge deal for a family that’s still kind of new to a process, but still running their business. In my 283-line item due diligence request list is just overwhelming. We know that. We try to piecemeal it in. But to have someone on the inside that understands the process can just make that better.
Craig Doescher: Yeah. And just to give you a sense, like most of our clients, we have direct access to their accounting ledgers. So, we have direct access to their HR, files to their contracts; so, we know where to go get stuff. Now, we obviously are going to talk to our clients to make sure that we’re vetting the information correctly if we’re not sure what it is, but when it comes to the financial information, we often know it better than they do, and we also know what the answer is that you’re looking for.
Eric Green: So—oversimplification a bit—but you’re the inside guy on the outside guy. And you know you’re helping us translate what the market is asking for and getting us the real tactical information.
Craig Doescher: 100%.
Continue listening to Part 2 of this conversation here.
Thank you for joining us for this episode of Cascade Conversations. For more information, please visit cascade-partners.com or call (248) 430-6266.