Laura Zander Named Her Exit Price
Introduction:
This week, Laura Zander tells Mel Gravely and Jennifer Kerhin how she and her husband, Doug, managed to sell their business for precisely the price they wanted. As you may recall, Laura and Doug started Jimmy Beans Wool more than two decades ago as a tiny corner store and turned it into one of the biggest brands in the yarn industry. Years ago, the couple decided they’d be open to selling—but only if the offer was right. With that goal in mind, they made a deliberate effort to get the business sale-ready and to keep it that way. And as Laura ran the company, she started cultivating relationships with anyone she thought might one day be a buyer. In fact, she tells us, she was never shy about saying, “Oh, hey, Bob, it’s really nice to meet you. Do you want to buy my business?” Eventually, someone said yes—although getting to a signed contract, Laura says, nearly broke her. Plus: Jennifer thought she had her hands full running her business—and then her own home went up in flames.
— Loren Feldman
Guests:
Mel Gravely is chairman of Triversity Construction.
Jennifer Kerhin is CEO of SB Expos and Events.
And Laura Zander is former CEO of Jimmy Beans Wool.
Producer:
Jess Thoubboron is founder of Blank Word.
Full Episode Transcript:
Loren Feldman:
Welcome Mel, Jennifer, and Laura. It’s great to have you all here, and we have a lot to talk about. First, Laura, you have been busy. We haven’t seen you in quite a while, and that’s because you have some big news to share. Want to tell us what it is?
Laura Zander:
Yeah, we migrated our website to Shopify back in December.
Loren Feldman:
That’s not what I had in mind, Laura.
Laura Zander:
Well, that was big news!
Loren Feldman:
I’m sure that was a big deal, too.
Laura Zander:
It was. And we did that at the same time as we were in a transaction to sell our business, which finalized in April. So, we sold our business and signed away everything on April 4.
Loren Feldman:
Congratulations.
Laura Zander:
Thank you very much.
Loren Feldman:
Are you happy?
Mel Gravely:
Yeah, how’s that feel?
Laura Zander:
Well, have I ever been happy? [Laughter] I mean, that’s a really deep question. Am I glad that we did it? One thousand percent. Do I have any regrets? I mean, sure. Like, there are things that I learned that I could have done better during the transaction, but—
Loren Feldman:
We want to hear about those.
Laura Zander:
Yeah. they’re just things that you don’t know until you know, things that you haven’t figured out. I guess that’s why, as we get older, we get so much wiser—some of us. But no, I don’t regret it at all. It’s the best thing we could have done, one thousand, billion, trillion. I mean, just absolutely no regrets. It was the hardest thing, the most emotionally, mentally, and physically taxing roller coaster ride. I mean, it was like doing an ultra marathon on a roller coaster while you have malaria or something. [Laughter] I mean, it was just awful. Like, so awful. I mean, so many times I thought I was gonna break. It was Rocky I, for sure. But we made it through.
Loren Feldman:
That’s quite a description. We’re going to ask you about that, but first, did you celebrate afterwards? What did you do?
Laura Zander:
It’s so funny that you would ask that. What a great segue, Loren. What I was going to say is, what’s so interesting is that one would think that on the day that you sell the business, this great weight is lifted off your shoulders. And you feel so much better, and the sun is shining. It’s not like that. It’s so intense.
I mean, it probably was another 60 days. So we are just now—now that we’re about 100 days in, 120 days in—we are just now coming out of the unbelievably ridiculous amount of stress and work that is required. Now, part of that is because I stayed on. The parent business, we completely restructured. I’m an overachiever, so of course I want to stay on. I do. I want to be helpful and useful. So I’m doing multiple jobs.
But Doug, still, every single day, he spends hours, and we’re still spending hours and hours every day tying up all of the loose ends. You know, every state that you’ve paid sales tax to, every state that you’ve had an employee. So you’ve got, the Department of Revenue, all the reconciliation, blah, blah, blah, blah, blah. So no, we didn’t celebrate. We’re too tired, so we will probably celebrate, and I mean realistically, and I’m not trying to be pessimistic or a downer, but I’m guessing January or February is when it might start to hit. But it may not be until April or May of next year, once we get through the taxes of 2025 and pulling together all of that paperwork, and all the complexity that comes along with it. There’s just so much. I had no idea.
Mel Gravely:
I’m wondering, will the listeners know about the business? Will they know what the business was and all that, Loren?
Loren Feldman:
Laura has been on from the beginning, so many of our listeners will know about her business, but it’s a really good question. And let me just say, I’ve known Laura for a long time. It’s worth pointing out, this is a business, Jimmy Beans Wool, that you started from scratch with your husband, Doug, like 22 years ago?
Laura Zander:
Yeah, 23.
Loren Feldman:
You started as a neighborhood store where you sold yarn and coffee, and you were both refugees from the dotcom bubble. You had been developers in San Francisco before the bubble burst. You started this neighborhood yarn store, and then you took it online and you built an amazing business in 22 years through both acquisition and organic growth. Can you tell us how big the business got by the time you sold it?
Laura Zander:
Yeah, I mean, I was always open with that before, but I think, at the end, we were doing $13-14 million in sales, had about 60-70, employees. And like you said, over the last seven years, really, is when we started to grow through acquisition, as you mentioned. You know, Mel, we stayed debt-free. That was something that was really important to us. We had a brick-and-mortar here in Reno and a warehouse distribution center. We had a building that we bought ourselves a couple years ago here in Reno, and then we purchased a business in Fort Worth, Texas, five—almost six years ago. So I was spending about half of my time, or you know, depending on the season, a third of my time down in Texas. And that was a factory. So it was a manufacturing facility, 30,000 square feet. We dyed yarn there, and then we slowly turned that into a distribution center for B-to-B. So we had started B-to-C and then ended with half of our revenue being B-to-B.
So in the last five or six years, we have almost doubled our business. So I really put my foot on the gas then. And I think you read the books that are Built to Sell, you know, selling the business has always been on my mind. I mean, for the last 15 years, this wasn’t something new. Ever since I met Loren, my approach was, you’ll end up with the healthiest business, or we thought we would end up with a healthier business if we approached it as if we were going to sell it any day now, because then that drove us to having really good financials. And it drove us to having systems that could be replicated or picked up or folded under. And even the portfolio of businesses that we acquired, there was some strategy in that, in trying to fill the gaps. And does this look attractive to somebody else?
Jennifer Kerhin:
Laura, can you tell us a little bit about that story? Like, tell us, were you actively going out and trying to find buyers? Or did the buyers come to you? Walk us through that story a little bit.
Laura Zander:
No, I was not actively going out trying to find buyers. But for the last 10-ish years, if I met somebody who either had the money, or I knew somebody who had the money, or I thought it could be a good strategic fit, I mean, I was never shy with, “Oh, hey, Bob, it’s really nice to meet you. Do you want to buy my business?” [Laughter] Literally, like literally, and Loren knows me. He knows that I’m not exaggerating.
Jennifer Kerhin:
How many times did people say yes?
Laura Zander:
A couple. You know, a couple, “We should talk about it.” I mean, there were a couple where we got a little teeny bit farther down the road. A lot of times, even, let’s say, 10 years ago, I’d say—even in this case—“We’re not worth what we want to be worth. But I want to put myself on your radar so that when we are worth it, or when you are ready to buy something, or add something to your portfolio, you think of me.”
So it was never a short-term play. It was always a, “Hey, I’m here. Hey, I’m here. Don’t forget about me.” And I just figured when the time was right, the time would be right. So, yeah, I mean, the company that ended up buying us, we’ve been on their radar for years. Years and years. And they’ve been on our radar for years and years. But I had multiple—I was polygamous that way, I guess. I don’t know if that’s the right word. [Laughter]
Jennifer Kerhin:
You Western people. Did you have a valuation? Did you know the number you wanted before you talked to them?
Laura Zander:
Yeah, but I’ve known for years. I’ve actively thought about—I mean, every year I value us. I know what I’m driving towards. I know what EBITDA I want. I know what percentage we want for this and that. I know intuitively, I guess, where our synergies would be found. So if I’m thinking about this company, before I say, “Hey, do you want to buy me?” I’ve got some kind of thought behind why it would work, and why it would be a good fit for somebody, and where we add value. So, I didn’t go get a formal valuation. I didn’t need to. I’ve been looking at this long enough.
Loren Feldman:
Why do you say that, Laura? Why didn’t you need a valuation? And the buyer didn’t want a valuation?
Laura Zander:
Because we said, “We are not looking to sell it right this second. If you would like to buy us, this is how much we need.” And they could take it or leave it, and that’s where we ended up.
Jennifer Kerhin:
Did you end up with that number?
Laura Zander:
Yeah, we did.
Jennifer Kerhin:
I heard one CEO say to me, “I’ll offer you any amount of money you want for your business, as long as I can dictate the terms.” How were your terms?
Laura Zander:
Well, I don’t know what to compare it to, you know? I mean, ask me in 10 years. Ask me in two years. So right now, they’re fine, but if we get sued in a year or two years or something comes up, that was something that I was completely unprepared for, because all the acquisitions we’ve done have been small, family-run companies. We’re a small, family-run company. You know, it’s all boilerplate. And this, you’re with the big dogs, and so there are indemnifications—just all of the negotiating terms were extremely detailed.
If, after we sell the business, somebody comes in and they sit in that chair, and the chair breaks, and they fall down and they break their pelvis, who’s liable? Is it the buyer, who now owns the business? Or is it me, because I didn’t disclose that that chair was past its lifespan and should have been replaced? So you have to think through—or at least we did—pretty much every class of scenario of something like that happening.
Loren Feldman:
Laura, did you want to stay on?
Laura Zander:
I could have gone either way. I’m like: If you find me useful and you think it would be helpful for me to stay on, then I’m happy to stay on. If you don’t want me to stay on, and you think it’d be cleaner and the business would be more successful if, as the founder, I stepped away, then I’m happy to step away. We’re still kind of in that phase, right? It’s been three or four months.
I took a role as an employee. I’m in the C suite. There are three of us, and at this point, I think I’m being useful. And I think that the business is benefiting from my experience, and I am learning a ton from these other two women who went to business school, and they know what they’re doing. So for me, while it was unbelievably, incredibly stressful for the first couple months, it’s starting to level out. And I’m getting to the point where I’m getting to start to read business books again. I’m getting to start to think about things at a slightly more strategic and higher level than I have in a long time. And that’s super, super exciting.
Loren Feldman:
I think the other term that Jennifer might have been referring to is whether or not there’s an earnout. Did you get your price all now, or is there a period of time before you get the rest of the deal?
Laura Zander:
We structured the deal so that if everything in the world collapsed tomorrow—I don’t know, there’s some crazy thing like a pandemic, and the economy completely collapsed—we’re happy. So, yeah, we got the deal that we were looking for. So, we were very lucky that way, and they were very honorable that way. And we were lucky that we’re, like, “Look, again, we don’t have to sell. I know the business isn’t as big and isn’t where I want it to be someday.” That said, I had been shooting for a certain value. I wanted our business to get to a certain value, and we weren’t there yet. So I was willing to take what it was valued at at the time.
Jennifer Kerhin:
Laura, how long were the phases? The phase where you’re negotiating, and then you agree on something. And then the phase of all the documentation. Can you walk us through that timeline?
Laura Zander:
Sure. So we semi-formally signed a non-disclosure, I think, in maybe October or so. And then, I think it was Thanksgiving.
Jennifer Kerhin:
Wait, October of 2024? Not that long ago?
Laura Zander:
Yeah.
Jennifer Kerhin:
Oh, that doesn’t seem that long. I thought you were going to tell me a year and a half ago. Okay, all right.
Mel Gravely:
That’s a long time!
Jennifer Kerhin:
Is it Mel? I have no idea.
Mel Gravely:
Because it’s brutal. I mean, you just described—it’s brutal, the due diligence, the back-and-forth negotiations.
Laura Zander:
Yeah, I mean, the process took five months, from the time we put it down on paper that, yes, we were interested in formally moving forward. You know, the dating process, if you want to call it that. I mean, we had been chatting casually and flirting a little bit, I guess, for about six months. But I was also, you know, polygamous,
Mel Gravely:
Dating others, yes. [Laughter]
Laura Zander:
Yes, I was also in other conversations just coincidentally at the same time. And I had gone down the path with some others. I mean, we started the due diligence around Thanksgiving, and I remember that, because that was our Thanksgiving with the 155 items that were on the due diligence list.
And then we originally had planned to close the deal in January. But, to your point, the negotiations back and forth, and just the communication of their lawyer and our lawyer, and then me and the CEO would chat about some stuff, and then some of the stuff would go back and forth, and all the paperwork just ended up taking—and then with the election. So not only did we do this over the holidays and a Shopify migration—so, a complete platform migration that we had worked 11 months on. We changed the entire platform that we’ve had for 20-some years.
Loren Feldman:
That your husband built.
Laura Zander:
That my husband built. So he’s driving that. Election, Christmas—or, I shouldn’t say election, but inauguration—election and post-election. And Doug’s parents, his dad is not doing well. He’s got Alzheimer’s now, and blah, blah, blah. I mean, it was just brutal, brutal, brutal. But it ended up taking three months.
So I actually signed the paperwork at the end of the day on a Friday when I was in Vietnam for business. The Friday that I got to Vietnam, we got word that the paperwork could all be signed and the deal could be done by the following Friday. But we were going to have to push it to get just all the last stuff, all last schedules. So it’s document all of your assets, document all the computers—it’s just all the paperwork. So we signed it, and the deal closed when I was in North Vietnam, in the hills, trying to source some really unique fabric, filming a documentary thing. Yeah, it was exhausting, just exhausting.
Mel Gravely:
You know, there’s so many things, Loren, that I would tease out of this that just are so unusual. Just to begin with the intentionality of building it to sell it is rare. The patience to keep building the value of it so that it gets to a place where it is more valuable to someone to buy, which means keeping your books clean and all of that. There’s so much that goes into it, prior to dating and flirting and then finding a proper mate. I hear people say they want to sell their business, and they decided today, and they think it’s ready to sell tomorrow. The truth is, most of them just aren’t ready for that.
Laura Zander:
No, I mean, you got to go to the gym for a while. [Laughter]
Jennifer Kerhin:
To get bikini ready?
Laura Zander:
Yes! I mean, you just do. And again, at least my thought process was—and I think it was like The E-Myth, or something that I read, like, 15 years ago that was like—“Build your business as if you’re going to franchise it,” in terms of systems and processes and everything else. And mine was, and there was a book Built to Sell or something. But this was just best practices, even if we keep the business for the rest of our lives. And we always had that open. I mean, again, we didn’t need to sell. We weren’t actively looking to sell it. But I always wanted my legs to look good if the right person came along. I wanted to be attractive.
Jennifer Kerhin:
Laura, did your employees know you were going to the gym or flirting around?
Laura Zander:
Some of my leaders, yeah, I’ve always been open about that. And I had been open about: Doug and I will not have this forever. So whether we do an ESOP, we don’t know what it’s going to look like, but we’re not Jay. I’m not going to do this until I’m 65.
Jennifer Kerhin:
When did they find out that you sold it? The day that the money was in your bank or beforehand?
Laura Zander:
No, and that created a bit of a complication. Because I did already have this trip to Vietnam, and we had this film crew going and everything, and it was something that I couldn’t get out of. It wouldn’t have been right for me to get out of it. So when the date came around that we were going to close on the fourth and I was going to be in Vietnam, it added a layer of complication, in that we had to do a lease back. Because we didn’t want to tell all of our employees while I’m in Vietnam. And my general manager of the Reno location was in Vietnam with me, and she’s the one that everybody works for on the Nevada side. So what I did is, for the month before we closed, I spent time with each of our leaders. And I told our general manager down there, “Hey, there’s a 95-percent chance this is going to happen.” And then, I sat down with our leader in Reno.
So I gave them a few weeks to process and to think about it, and for me to be around, for us to talk about it and stuff. But then what we did is, after the fourth, I was still in Vietnam, and we spent a week, and they leased back the employees from us so that we didn’t have to tell our employees for a week, and so everybody still got their paychecks from us. I mean, it was effectively invisible, right? And that just created a ton of complications in all kinds of different ways. Like, who’s liable if somebody slips and falls? Who’s liable if there’s a discrimination claim, or whatever? Who’s paying the health insurance? Who’s paying this? Who’s paying that? Who pays workers comp? So paying the lawyers to figure all that stuff out. But we ended up telling our teams, I want to say, on the eighth, ninth, or tenth. About a week later.
Loren Feldman:
Laura, we should say who bought your company. If I’m not mistaken, it’s a larger company in your industry. So it was a strategic buy for them. Is that right?
Laura Zander:
It was. Yeah, it was a strategic buy. It’s called Local Crafts Group, and they own a number of other formerly family-owned craft brands in the industry. And I had seen what they had done with some of the ones that they had purchased over the last few years, and they had done a really phenomenal job. And so, again, Doug and I were like, “Should we just wait and try to build the business more because there was so much growth to be had? Or are we ever going to find somebody that’s going to be a better fit?” And we just didn’t think there’d be a better fit. We didn’t think there was somebody, like a group of people, that could do a better job with our businesses and kind of activate or execute on all the dreams that we had than these guys. So yeah, I am now the chief brand officer of the Local Crafts Group.
Loren Feldman:
Are you excited about being the chief brand officer and being part of this mission going forward? Or are you hoping to do something else fairly soon?
Laura Zander:
I mean, there again, because we just went through this, I am coming out of the exhaustion. And it hasn’t been fair for me to judge, because I’ve been doing parts of my old job in addition to doing the new job. So I don’t have a super clear vision of what this new job is going to look like. That said, it is becoming more and more clear every day. And I just think there’s so much that could be done. We finally have an opportunity—I finally have an opportunity to have all the resources and the expertise and just the backing to do all these things that we’ve always wanted to do.
Loren Feldman:
Is it different thinking that you won’t be the owner?
Laura Zander:
Oh, I love it. That’s the best part.
Loren Feldman:
Correct me if I’m wrong here, Laura. I think early on in this podcast, we did an episode where you expressed the thought that there are times when you just get tired of having to make every decision, and you wish somebody would just tell you what to do.
Laura Zander:
One thousand percent.
Jennifer Kerhin:
Amen to that.
Laura Zander:
And somebody else would just pay the bills.
Loren Feldman:
And is this what that is?
Laura Zander:
Yes, it is so nice, like every day. I told our CEO, I’m like—what got me through these first couple months, really, again, because it was just so intense. I don’t think there’s any way around it, but I woke up for a month and I’m like, “Oh my God, I could quit my job today.” I have not felt that feeling in 22 or 23 years.
Like, for 23 years, you can’t quit your job. You can close it down, but you know, there’s all this paperwork. There are all these things you’ve got to do, as we’re learning right now. But I haven’t had the freedom to just walk away in decades, and that freedom, ironically, really, really motivated me and is still very, very motivating. It’s so nice to know.
And I feel so much more balanced. I mean, God, Loren. Now, I wake up in the morning. I read a little bit. I do yoga. I go for a run for an hour or two. And then I come back and I start work at nine o’clock. I mean, I work late. And there are days that I’ll put in 12 or 14, but I have figured out: This is a job. You know, I haven’t had a job—like, I don’t have to be here. I’m here because I want to be here. I want to learn. I want to push whatever I want, make things happen. I want to make this better. I want to see what impact we can have. And I want to see this work. I’m really excited to see, to have this experience and work in a much, much, much bigger company and just level up and see if I can do it. I don’t know if I can fight at this weight class.
Jennifer Kerhin:
Laura, is your husband with the new company? How did that relationship, your marriage, go through this process?
Laura Zander:
Ah, he is not. I mean, he’s still consulting, so he’s still doing a lot because he’s a software engineer, and so he’s helping migrate some of the data. He really wanted to retire. He was done, just done. So as far as how our marriage made it through, how do you make it through anything after 25, 28 years? You just do.
Mel Gravely:
I’m curious of what your team looked like when you were going through this, because it sounded like you were involved in a lot of the detail gathering yourself, all the due diligence. I’m sure they had a data room and all that kind of stuff you had to put crap into. Was there anybody internal that could help you there?
Laura Zander:
No.
Mel Gravely:
Okay, so you were doing the data gathering, the HR stuff, and the financials.
Laura Zander:
Yes, yep.
Mel Gravely:
Oh, boy. You should teach a class on it. I mean, people who want to sell, it’s just funny: They get in it, and the buyer has all these questions. And everything you give them, they’ve got three more questions about everything you gave them.
Laura Zander:
Oh, yeah.
Mel Gravely:
So every one document turns into three requests. And your data mining just goes on and on. If you’re pulling that stuff yourself, oh my Lord. I get it.
Laura Zander:
Well—and I don’t know if this is right or wrong—one, nobody’s going to know the data better than I do or Doug. And two, nobody has the same skin in the game to present the data. So I don’t know that I would want anybody else, because I really want to make sure that we’re—I mean, obviously I’m going to give them the correct data and accurate data. But also, I’m not dumb. I want to make sure that it’s telling the story that I want to tell. And again, I don’t know, but this might be one of those cases where the best person to do it is us. But we’re also very financially involved. You know, we really know our financials. We really know the information systems.
Loren Feldman:
Laura, I think it’s a fairly common thing in the course of a business sale, even when the owner isn’t as fully involved in every detail as it sounds like you were, for the owner’s attention to be so completely on the possible sale that it’s easy to lose track of running the business. And the business suffers during that period. Was that an issue for you at all?
Laura Zander:
Oh, absolutely, yeah, a thousand percent. And that’s something that we’ve talked about, and that was a source of tremendous anxiety. It was January, our numbers—one, we had just migrated to a new platform, so we lost all of our organic rankings. So site traffic has gone way down on the ecommerce side of the business. I am not focused. I’m working on this transaction. Doug’s working on the transaction. I’m not focused on: How do we compensate? How do we figure it out? And frankly, I don’t have the energy to push, because I’m already pushing as hard as I possibly can. And so when your numbers come back and they’re not as good as they were, and then you’re just like, “Oh my god, are they gonna walk away because the numbers aren’t as good as they were?” And, I mean, it’s really harrowing, every little thing.
Then I’m in Vietnam and the tariffs get announced, and I’m in Vietnam sourcing. And they’re like, “Yep, 45-percent tariffs.” And I’m like, “Well, now the deal is gonna get canceled.” I mean, there were so many things that popped up. Well, I mean, Joann’s went through bankruptcy and closed while we were going through this. Again, you know, the new administration put some things in place that weren’t favorable to the business. So every step of the way, you’re like, “Well, there it goes. It’s not going to happen.” And then you’ve got to try to dig out and repair all of the things that you’ve been neglecting for the last couple months, because you just simply only have so much energy. Yeah, it was fun.
Mel Gravely:
The longer it stays on the market, though, the longer the process is. Like you say, things happen because life just keeps happening. And we’re in weird times now. But you know, Joann’s could have closed any time. It just can’t be helpful to the conversation of what you’re trying to do.
Jennifer Kerhin:
Mel, you say it was a long close. I wonder how long a typical closing is. I have no idea. And so, Laura, did you think this was an average time? Is this longer than normal? What’s the average time to close a sale for a business?
Laura Zander:
Well, I would assume that it’s based on the size and complexity of the business, but under a year. I was just watching Bob Iger’s Masterclass, and he talks all about the acquisitions that he’s worked on. Obviously it depends on, are you on good terms? I mean, does the other side really want this to happen? And can you agree on some things?
But I think six months, six to nine months, maybe nine months is the average. We did it in five. We were trying to do it in three or four, which, maybe we didn’t even do it in five. Maybe we did it in four—one, two, three, four. Yeah, like four, four and a half. So it was probably pretty quick.
Loren Feldman:
Did you have a broker helping you?
Laura Zander:
No, no, we did not.
Loren Feldman:
Interesting. How did you decide not to use a broker?
Laura Zander:
Because most of the smart people that I’ve talked to tell me, “Don’t ever do that,” that it’s just a waste of money. [Laughter]
Jennifer Kerhin:
Did you have other advisors? Did you have a whole slew of tax advisors and lawyers and stuff? How many advisors do you think you had?
Laura Zander:
Probably not as much as we should. I mean, we found a lawyer. Our tax people did help us a little bit, but not a ton. You know, we just sent them over the agreements. And one, the first step is: Okay, if this is the price that we get, how much are we going to end up with and are we okay with that? And the second part was: Can you look at these agreements and see if there’s anything in here that’s a red flag?
And then we found a local lawyer. I mean, Doug’s from the Midwest. He’s a frugal dude. Our tax people had referred us to a high-priced attorney in Atlanta who wanted a couple hundred grand to do the transaction. And then we found a nice local guy in Reno, and he wanted $30,000. And I’m like, “Yeah, for 800 bucks an hour, I’ll do some of the work,” you know?
Mel Gravely:
I’ve seen that be all over the place time-wise and level of help you get. The only thing I would say to people considering it, is—I’ve learned this the hard way—you start with the tax implications. So there are certain ways to structure a deal, but the thing that’s going to hurt you the most is considering how you do it to make it the most tax advantageous for you. Because people don’t think about that, right? So checking with your tax folks, as you did, probably helped a lot. At least you knew: Here’s what I’m going to end up with.
At the end of the day, we didn’t want to ever have to work again. I mean, otherwise, why bother? Then I’m just gonna have to go get another job. And so we just had to do a lot of thinking. My husband, he’s such a nerd, too, but he put together a whole Monte Carlo of, like, “If we get this, and then after taxes, we get this, and what’s the standard deviation of if we live to 92 versus 87 versus this?” And he ran it 2,000 times between looking at interest rates from 1929 or 1921 or whatever, to 2024, and what are all the averages, so the probability what we end up with is going to be enough for us to lead a comfortable life—not an extravagant life, but a comfortable life until we’re in our late 80s?
And once we were okay with that, then we’re like: Okay. But we didn’t do anything until that. Because we had to have our bottom line. And we had to be able to say, “Look, we are not going below this. Like we’re just not. And if that’s not okay, then that’s okay. But we can’t.”
Loren Feldman:
Did that become a point of contention?
Laura Zander:
Not really. I mean, I’m sure there’s some famous quote out there, but it’s basically like, “Once you make a decision, then it’s easy.” Because it’s just math. This isn’t emotional. It’s not preferential. We’re just telling you, “This is it.”
Loren Feldman:
Were you surprised by anything in the due diligence period? Did you learn anything about the business that you didn’t know?
Laura Zander:
Yeah, we did. We found a couple things, and it was really helpful. And so, me, the eternal positive-spin marketer, was like, “Doug, even if this doesn’t work, look at these great things that we’ve learned.” Like, it’s so worth the time that we learned—I mean, I don’t want to go into details, but—there were a couple things we should have been doing that we weren’t doing, that we didn’t know we were supposed to be doing. I mean, it was nothing that affected anybody day-to-day, but there was some paperwork that we should have been filing that we didn’t know we were supposed to be filing. So just little stuff like that, buttoned-up stuff, that was really helpful.
And again, in the spirit of, “If this doesn’t work,” this process has taught me a ton about what we need to do better for the next time. And when we would have those moments where we’re like, “Oh, crap, this isn’t going to go through. It’s not going to work,” I’m like, “Look, then this is just a dry run. Let’s think about how much we’ve just learned from this process.” It was cheaper to do this than to go to Harvard Business School, and we actually just got to experience it firsthand. And so let’s set our files up so that the next time, it’s much easier to supply all this due diligence stuff, because we basically know what somebody’s going to ask for, just little simple stuff like that.
Loren Feldman:
How did your employees react when you did tell them?
Laura Zander:
My leadership team, they were a little bit stunned. But after talking about it a couple times, they were actually really pumped. I mean, I really positioned it and believed—and do believe—I’m like, “All of these things that we’ve wanted to do that we haven’t had the resources, and we haven’t been able to do, we’re getting help.” It’s just like, “Look, we’re gonna get help.” We’re gonna have a whole department that can help us. Instead of just being me, we’re gonna have a whole HR department. We’re gonna have a whole IT department instead of it just being Doug. So, yes, it’ll be an adjustment. So, I mean, they were okay. Honestly, we only had a couple people who didn’t make it through, who basically opted not to come along with us. And I think out of our numbers, that was really great.
Loren Feldman:
Did you have to make any tough staffing decisions as part of the sale?
Laura Zander:
I did, yeah. We did, yeah. As we consolidated things together, there were some redundancies. So the CEO and I spent time—I spent a lot of time with our org charts, figuring out what the consolidated organization should look like. So, I mean, that’s awful, super awful. But, I mean, it is what it is.
Jennifer Kerhin:
Congratulations. I mean, you do sound exhausted, so it probably hasn’t completely set in yet. [Laughter]
Laura Zander:
No, it hasn’t.
Laura Zander:
You do sound that way, but for all those CEOs who are not yet in that situation, it’s an inspiration. I mean, for all the things you said, we work hard—every business owner who’s listening to this podcast—we work hard. And to know that somebody else can make a decision, and there’s other resources, and that you have the financial compensation for all those late nights, the times away from your—I think you have a son, right? Your son’s time, the times where you had to work during vacation. It’s inspiring to hear this story. So often, we talk about: How are we going to get out of this mess? How are we going to fix something? How are we going to create something? So it’s lovely to hear that you did so well. Congratulations.
Loren Feldman:
Amen.
Laura Zander:
Aw, thank you. I really, really, really couldn’t be happier. And I will use the word, Loren. I mean, I really couldn’t. I am so grateful. I can’t even describe it. Like, so grateful. And I’m even so grateful for this job, a chance to be around just really smart people and learn how to operate and see what life is like on this side of the fence. You know, I needed it. I needed something new. I needed something fresh. I needed a change, personally—you know, selfishly. But then I think the business needed it. You know, the business is gonna be so much better, and I can’t wait to watch and see that happen and be part of it.
Loren Feldman:
Well, you earned it.
Laura Zander:
Thank you.
Loren Feldman:
So, I want to talk about something else, a very different situation, but also dramatic in a very different way. Jennifer, you’ve had a lot going on. Tell us what happened to you.
Jennifer Kerhin:
Two weeks ago, I was in the house when lightning struck my house, and my house was on fire. And basically, it’s standing, but everything inside of it burnt to the ground. So, couches, paintings, all of that I don’t really care about, but I have two kids—every Christmas decoration, every Mother’s Day gift, every painting they did with their hands, every Thanksgiving little turkey, all of that is gone.
Loren Feldman:
But everybody’s okay, right?
Jennifer Kerhin:
Everybody’s okay. I got out. My smoke detectors—
Loren Feldman:
You were the only one there?
Jennifer Kerhin:
I was the only one there. The smoke detectors went off as I searched through the house. Here’s me thinking it’s a problem to solve. I thought the power went out. So I’m looking to see how to turn off the smoke detectors, until I smelled the smoke, and I thought, “Oh no.” And then I ran out of the house and I called 911. And the very odd part of this is, as the firemen came, my daughter is in the Fire Academy right now, and she volunteers at the local fire department. And who came but all of her friends? And so they were there battling the blazes, the flames coming out of my house. And I’m thinking, “Oh my goodness, I do not want any of my daughter’s friends to get hurt on this.” For those who don’t know, something like 75 percent of the fire departments in this country are volunteers. So just remember that next time you call 911: They’re not career firemen.
And the hard part was, you know, as business owners, five days later, I had an annual staff retreat. I had 30 people flying into Baltimore. And friends of mine said, “Cancel it.” Well, as CEO, you can’t cancel something like that, right? So I had to deal with the aftermath. I had jeans and flip flops. As I ran out of the house with the smoke, that’s all I had left in my name. And in five more days, I had to put together—I mean, the staff retreat was mostly put together, but the buck stops with you as the CEO. And so I had to come to the place and come to the hotel and come and talk, present my financials to the team. You know, the CEO type stuff: inspire them to talk about the future and give them vision and hope. So in between, talking to insurance adjusters, talking to my daughter, talking to my son, trying to buy clothes, trying to get anything I could. In the meantime, it’s been a rough couple weeks.
Loren Feldman:
Where are you staying?
Jennifer Kerhin:
We are staying at a friend’s house right now, and we have a long-term rental coming up in the next few weeks. The interesting part, too, from a business side, is: If you’re a remote company, like we are, what your business insurance will cover versus what your home insurance will cover, and where they cross over and where they don’t. I’m sort of learning some of that, just trying to navigate that path. I’m taking a lot of time off, and my leadership has been really stepping up. And people in the events industry and my clients have really been unbelievable to me—you know, sending me notes, sending me Uber Eats gift cards. I mean, really, just great support from my community.
Loren Feldman:
Have you learned anything through this process that you wished you’d known before all this happened?
Jennifer Kerhin:
I don’t know, Loren. I think I’m still in the midst of this chaos. I don’t think yet. Ask me in like six months.
Loren Feldman:
I will.
Jennifer Kerhin:
The one thing is, if you’re a business owner, you have a couple pillars of equity for your retirement. One, hopefully you have some sort of 401(k) plan. Two, your house, and, three, your business. Well, when one of those goes up in flames, you start to really think about your retirement and how much equity is in the business. Because I’m hoping my insurance pays for everything, but who knows, right?
Your business, you put your life’s work into this, and you really hope that you’ll eventually get the payoff. Because the same thing with my house: My house was nearly paid off—nearly paid off, and we’re so close to having it paid off in just a couple years—and now it’s in flames. It’s smoking timber. So it’s a hard thing to think about that your financial security sometimes can go up.
Loren Feldman:
All right, well my thanks to Mel Gravely, Jennifer Kerhin, and Laura Zander. As always, I appreciate you guys sharing your stories.
