Leaving Corporate America to Acquire a Piece of Main Street, USA
Jason Cline was working from home in St. Petersburg during the pandemic, attending back-to-back Zoom meetings when his wife Lynda asked a question that would unknowingly change the trajectory of their lives: How do you do this all day?
Today he and his wife are the proud owners of a flower distribution company serving central and southern Florida. It’s a new lifestyle, but an old business - a 30-year-old business. The original owners were ready to pass on the baton, and recognizing its potential, Cline snatched it up.
Cline, at fifty years old, was used to corporate life, working for Fortune 500 Companies. Over the span of his impressive career, he had climbed executive ranks to Vice President and Senior Vice President. But he was burned out.
Sick of what he refers to as the “mayonnaise” -- the thick, bureaucratic processes he’d grown accustomed to in corporate life – he began to entertain the idea of business ownership. The lockdown's impact on how business was being done made Cline reflect on his career. “I'm 50 years old, there’s more behind me professionally than in front of me,” Cline said, “so how am I going to spend the next 10, 15, 20 years of work life?”
From Casual Search to Serious Buyers
Cline had a habit of browsing online to see what businesses were for sale, and his attitude quickly changed from a casual searcher to a serious buyer, determined to make his dream of being a business owner a reality. He then began using online valuation tools to view comps of recently sold businesses, checking the temperature of the market and gaining insight into what he could afford.
Equipped with a good idea of costs, he and his wife discussed their acquisition options. They knew they wanted to stay in Florida, which helped narrow down their search, but they needed to find the right industry.
The Clines had always enjoyed remodeling and rebuilding houses. In fact, they were currently living in their 12th house, which led them to initially look at home improvement businesses. But Lynda also loved flowers, so they looked at nurseries and flower shops in the area as well. That’s when they stumbled across their future business: a floral distributor listed for sale online.
Kauai Isle Flowers Grabs Their Attention
Kauai Isle Flowers was founded 30 years earlier by high school sweethearts and named for a friend of theirs who loved Hawaii.After inquiring about the listing, Cline was intrigued. First by their great startup story, but more importantly by the profit and loss statement and operational plan. Retail florists tend to be local, but Kauai Isle Flowers was a wholesale flower distributor for Central and Southern Florida. Cline saw the potential reach a distributor could offer compared to a single flower shop.
Cline was 60% sure he wanted to buy when he spoke to the business broker and then 90% after his first phone call with the owners. He and his wife just needed to verify a few things before they were 100% sure they were ready to move forward with an offer. “Wow, if everything here is true - you've got to do your due diligence - this is a no-brainer. We have to have this,” said Cline.
As part of their due diligence, the Clines began spending time with the previous owners. They had them over to their house constantly and would even work on the business together, taking calls, surrounded by whiteboards full of notes.This was important for the sellers as well. This was their baby for 30 years. They didn’t want to sell it to just anybody, they wanted to sell it to somebody who would take it and move it to the next level,” said Cline.
This being the peak of the pandemic, the previous owners had expected it could take 6-9 months before they found the right person to buy their business. Instead, the two parties agreed on a price, with a broker mediating the transaction and the business was sold in 30 days, in the range of $700,000 to $1M total considerations paid in cash.
Taking the Business to the Next Level
Once the business was in the hands of the Clines, they took on the project the way that they did when they flipped a house. They had found a business with bones and all the right characteristics. Now it was time to take it to the next level.
With his MBA and business background, Cline walked into the business unintimidated. He attributes some success to the owners, who had put in an operational plan that was very scalable.For anyone considering selling a business, this is a very attractive asset to entice buyers. It was easy to see that the steps already in place were simple, repeatable, and prone to few errors.
Cline immediately made key operational changes such as upgrading the vehicles and adding a redundant walk-in cooler to accommodate growth. He also removed the requirement for invoices and tickets to be printed, saving significant time and reducing paper consumption. Processing transactions for clients was reduced from minutes to seconds.In no time at all, Cline won a major account and in the six months that followed, the business grew by 50%. They are now in talks to expand the business outside of Florida.
Of course, even the most prepared can meet unforeseen challenges.For the Clines, this came as a prominent indirect result of the pandemic.Vehicle shortages due to the supply chain and chip manufacturing problems.Since the company relies on vehicles to deliver flowers, these limitations affected their ability to scale the business. Cline managed to get through this challenge, however, he would have been more aggressive about buying vehicles in the beginning had he known about the shortage beforehand.
Advice for Others Seeking Business Ownership
When asked what he would tell other entrepreneurs considering buying a business, Cline said, “First and foremost, you’re going to have a lump in your throat about this. You’re going to be nervous; you’re going to be scared. Do I jump? Do I not jump? Do I do it? The answer to that is yes. Do it.” Cline adds, “Now the caveat to that, of course, is do your due diligence. Do your homework, get that due diligence really, really done and get a good transition plan with the sellers. That to me are the three pieces that made this a real win.”