In this episode of the Power Exit Podcast, I had the pleasure of sitting down with Phil, a former client who successfully sold his IT business, InfoTank, during the pandemic. His story provides valuable insights for business owners considering their own exit strategy.
The Birth and Growth of InfoTank
Phil’s entrepreneurial journey began in 1998 after leaving his corporate IT director position when his employer was acquired and wanted him to relocate to Texas. With just a couple months of runway, Phil and his wife started InfoTank.
Their first break came through a relationship with a neighbor who was the principal of a new Christian school. After offering free services to improve their website, Phil secured his first contract setting up computers for the school. This relationship-based approach became the foundation of InfoTank’s growth strategy.
“We just grew a referral-based business. I don’t think we ever advertised, and we went on for 22 years,” Phil explained. The company developed a niche serving churches and schools in the Atlanta area, though they also worked with commercial businesses, providing web development, programming, and operational IT support.
Building a Sustainable Business
Over two decades, Phil grew InfoTank to 12 employees, creating a structure that didn’t rely solely on him. He divided the business into two service buckets – operational IT and web/programming – with trusted leaders managing each area.
“There was one guy, Ray, who was the first employee and still a good friend, who was responsible for taking care of all the development stuff, and then another gentleman was responsible for taking care of all the operational stuff, which gave me a little bit of time to have some family time,” Phil shared.
This organizational structure proved crucial when it came time to sell, as it demonstrated to potential buyers that the business could thrive without the founder’s daily involvement.
The Decision to Sell
After 22 years, the high-pressure nature of the IT business began to take its toll. Phil described how they’d weathered the Y2K issue, the 2008 financial crisis, and the dot-com bubble crash. When COVID hit, they faced new challenges helping schools transition to online learning and churches to virtual services.
“It kind of wore me out,” Phil admitted. “My wife saw it was a lot of stress.”
The final push came when Phil was walking his grandson around the neighborhood and realized, “I’d rather be doing this than sweating through these COVID business decisions.”
The Sale Process
When I first contacted Phil about potentially selling his business, he was open to exploring the option. Though he hadn’t been actively planning to sell, the timing was right. The business was profitable with consistent growth and a diverse customer base – all attractive qualities to potential buyers.
What surprised Phil was the level of interest from various buyers. “We had a lot of different folks… they had different goals in mind, and it was surprising to me how many niches the business might fit into.”
Ultimately, Phil chose to sell to two brothers, ex-military men who wanted to partner in business ownership. He appreciated that they shared his family-business values and wanted to continue the traditions he’d established.
Lessons Learned
When asked what he would have done differently, Phil emphasized the importance of preparation:
“If I had done anything different, it would have been to be more prepared ahead of time for the idea of selling a business. Things like our corporate structure was not a good deal for me in the end in terms of taxes.”
Phil’s advice to business owners: “Think about this kind of thing early. Have an exit plan of some kind, even if it’s just in your head. Get some advice from your attorney, your accountant, whoever, to make sure that the business is positioned well.”
Life After the Sale
Post-sale, Phil has embraced “Life 2.0.” He’s pursued financial coaching, started a woodworking business, and most importantly, spent more time with family. He and his wife are traveling more and enjoying time with their grandchildren.
The transition was smoother than expected, requiring just “a handful of meetings and an occasional phone call or two” to transfer knowledge to the new owners.
The Power of Relationships
Throughout our conversation, Phil emphasized how relationships guided his business decisions – from how he built his client base to how he hired employees, and ultimately, how he chose to work with me as his M&A advisor.
“Relationships have been sort of the important thing, and honesty and being able to work together has been important to me in all business aspects,” Phil reflected.
This relationship-focused approach not only built a successful business but also ensured a smooth transition when it was time to move on.
For business owners contemplating their own exit, Phil’s story demonstrates the importance of preparation, building a business that can operate without you, and finding the right partners to guide you through the process.
Are you wondering what your business might be worth? Don’t wait until you’re ready to sell to find out. At Marsh Creek, we’re patient about finding the right price, the right terms, but also the right partner for the legacy of your business. Contact us today at 404-436-1071 to schedule a confidential valuation consultation and take the first step toward your power exit.
