JOEY WALTERS, CEO of HRPreneur
If there is anything Joey Walters doesn’t know about business, he learns it. The only thing the CEO and founder of HRPreneur takes more seriously than his own learning is his clients’ business education.
“My slogan is, ‘your success is my passion,’” says the CEO. “I am always learning because there is always a plot turn in business, that’s why I am always changing and my business is always changing.”
The firm has emerged and been transformed along with its owner’s learning.
Best known as Canada’s premier merger and acquisition and talent acquisition firm for the industrial and middle market sector. The firm’s programs now include consulting on sales and operations, organizational structure, compensation and benefits, talent acquisition, employer branding, succession planning, talent development, employee engagement, performance management, employee relations, real estate, mergers & acquisitions and corporate events.
Each of these skills, processes, and knowledge sets were built in direct response to client need. After going into business for himself, Joey discovered the generalist nature of HR experience, combined with his open-mindedness, made it easy for him to learn and to give his clients the education they need outside their own areas of expertise.
“When I started my business in 2011, I thought I would just do recruiting for small and medium-sized businesses, but as my clients’ businesses grew in scale, they needed someone who could not only help them find and keep talent, but to help them plan for growth and to prepare an eventual exit strategy, says Joey. “And now real estate sales tie into the exit strategy to help my clients sell the commercial buildings along with the business itself.”
Each of the business areas is process-focused. Joey and his clients work carefully together to analyze every aspect of the business, create documentation and work through the implementation of structures and plans for the future.
One of the biggest area of growth and change Joey has seen, comes from the sales of businesses as their owners want to retire or move on to other challenges. Selling a business is never a simple transaction and it is one often fraught with emotion and complexity.
“Most people spend their lives building their businesses, then families don’t want to take it over and selling it on to employees can be difficult to structure,” says Joey. “No one is educated about the process of how the deal should be structured, the one-time tax incentives, or how structuring the business properly is important, so that when you do sell it, you can reduce the tax liability.”
These are challenges many people looking to sell a business never overcome.
“85% of businesses are never sold because business owners have never put together an exit strategy,” says Joey, who hopes to reverse the trend. “My work is about educating people who are selling businesses by taking all of the emotion out of the process. Otherwise, business people focus on how much money they need, versus being concerned about the most important thing, the value of the business itself.”
According to Joey, all businesses create and communicate value in five ways. Once that value has been created and communicated, it’s time to start looking at how the business might be sold, transferred, merged with another business, or expanded in other ways.
The five qualities that create business value are these:
1. Longevity: Achieving staying power in your market still matters.
“Part of being an entrepreneur is about trying things and seeing what works and, if doesn’t work, correcting it,” says Joey about the risk-taking that is at the heart of most new businesses. “The other part of being an entrepreneur means being patient. We often over estimate what we can accomplish in the short term and under estimate what we can do in the long term. When your business has achieved longevity, it demonstrates long term success.”
2. Structure: Demonstrating available complementary and contrasting skills.
“The longer you are in business, the more you need to attract people who have skills and competencies that are different than your own. That’s something every recruiter knows,” Joey says. “A management and operations structure that demonstrates the right people, with the right skills are all doing the right tasks is a transparent structure that can be replicated by a future buyer.”
3. Recurring Revenue: Your finances are in order.
“Recurring revenue is very important. The financials have to be consistent, year over year,” Joey says. “But being able to answer other questions is more important. How do you articulate how you continue to grow your business so that you have an appropriate volume of customers? Ensuring you aren’t ever dependent on just a few core customers is also part building the kind of reliable income and financial stability buyers are looking for.”
4. Product/ Service: Knowing what you sell and doing it well.
“Core products and services can change and develop with technical advances and market expansion,” says Joey, “but the best businesses know what they have to offer and so do their customers.”
5. Differentiation: Being set apart.
“You have to know how you are different from your competition and why customers choose you, time and again,” Joes says. “Products and services can always be copied, but true differentiators cannot. They do business differently and customers recognize the difference too.”
Once the value of the business can be established, selling it can be considered. Again, that is not a short-term process.
“My business is all about helping people when they are making huge changes in their lives and businesses so that they get what they need,” Joey says. “That’s something real estate and recruiting have in common with mergers and acquisitions.”
That said, Joey cautions that change demands preparation and preparation demands education. That usually means that the quick sale of a business is generally not in anyone’s best interest. The process can, in fact, take years.
“A business owner needs to focus on running the business and let an intermediary sell the business,” says Joey. “It’s the same thing you do when you are getting ready to sell your house. You might need to paint or upgrade the kitchen, only in the business sense it might mean finding new clients or upgrading equipment. We’ll do things that are up front to increase value. Doing a sales readiness assessment will walk you through each one of the processes, including making a to-do list and conducting stress tests to ensure what needs to be done is what is prepared.”
Learning each of these skills and perspectives through running his own businesses has helped Joey complete nine mergers and acquisitions for clients so far. By focusing on learning and educating throughout the readiness process, the business owner can focus on running the business and keeping it healthy while an intermediary focuses on the actual sale of that healthy business. It’s a model that benefits everyone.
“The sale of a business has to be mutually profitable for both the buyer and the seller,” says Joey. “For me, it’s about that fairness for everyone. It’s about education and being professional and being ethical throughout the whole process.”
Kate Baggott's technology and business journalism has appeared in the Technology Review at MIT, the Globe and Mail, Canada Computes, the Vancouver Sun, and on the Business to Business News Network
Kate is the author of two short story collections.