Nitin Khanna, CFA, CAIA, is the founder and president of N3 Business Advisors, a Toronto-based M&A advisory firm that works only in the construction, trades and engineering sector. His team of 13 has completed more than 100 transactions and speaks with roughly 100 owners a month, from HVAC and electrical to plumbing and general contracting, at enterprise values between $1M and $25M. Before founding N3 he held senior finance roles at TD Financial Group, TransGlobe Asset Management, Aecon Construction and Carillion Construction, managing more than $600 million in assets. He grew up in a business family, spending summer holidays in his father's shop, and writes a newsletter to roughly 20,000 owners under the line that anchors his work: every owner exits, few do it well. On the LeanScale Podcast he explains why the seller is usually the reason a deal collapses, what makes a business transferable rather than owner-dependent, return on time, why every business sells twice, rolled equity, and the 90-day owner-dependency test.
“For a business to sell, there has to be three things which have to fall in right place. One is the business has to be ready to be sold. The market has to be ready. And the third, which is the most important thing, you as a seller of a company have to be ready to sell the business.”
“As much as these sellers tell me that we are ready, they are the ones who are not ready. It's not about the number. It's not about the headline number. It's about being ready emotionally.”
“Selling a business, Anthony, it's not an event. It's a process. You have to prepare yourself for the process.”
“If the relationships lie with you as a seller, you don't have a transferable business.”
“The most important technical skill every business owner should have is how to find the right person and put them in the right job.”
“If you don't want to build a business, don't build it. But don't call it a business. You've got a glorified job.”
“The most expensive employee you can ever hire in your company is somebody who's just like you.”
“How much you could have paid a landscaper to mow the grass? 50 bucks? All of a sudden, you move from $500 an hour to 50 bucks an hour.”