Meet Terry Lammers: He’s the man with a business plan

Terry Lammers is a man with a plan. The business planner advises and guides prospective business owners interested in buying and current business owners looking to sell their enterprises.

He opened Innovative Business Advisors in O’Fallon last July. Last week, business writer Will Buss visited Lammers at his office to talk about his business of buying selling businesses:

Q: Why did you go into a business that helps others buy and sell theirs?

A: “I previously owned a company called Tri-County Petroleum that was a wholesale fuel and lubricants company. We covered about 14 counties in Southern Illinois and the St. Louis metropolitan area. In the course of owning that company, I bought 11 other companies. In 2010, I sold it. So I really like doing mergers and acquisitions. So after that I did banking, but after three-and-a-half years I really wanted my time back. There was no full-service brokerage company on the Illinois side of the river, so we started Innovative Business Advisors to help people buy and sell companies. I got my CVA designation, which stands for certified valuation analyst. So we do business evaluations and also do exit planning and help people in the process selling their business. That’s kind of how my business ended up being sold. I had somebody value it and that was a good price, and then we moved forward to sell it. I feel that we can connect with business owners because of my personal experience with growing the company, buying other companies and selling my company.”

Q: How did you get into the fuel and lubricants business?

A: “It was a family-owned business. I grew up with it. I came back to work with my dad full time in 1991. I started Tri-County Petroleum in 1992. Between 1992 and 2000, we bought 11 different companies. We grew the company from $750,000 a year in sales in 1991 to over $40 million in sales when we sold it in 2010. It all started with the family business. It was kind of like being at the right place at the right time. There were several people who were wanting to retire and exit the business, and this was just a good fit for them. I think it’s really those personal experiences and knowing the deal structure and knowing how to deal with the banks. Working at the bank was good experience. I always tell people that I’ve been banking for over 20 years, just not on this side of the fence. So it was really interesting working for the bank and knowing what they are really looking at.”

Q: Who are your clients?

A: “I think as Innovative evolves, we want to work with companies that have a value of between $1 million and $10 million. That, I think, is a good spot for us. We want to work with those companies and surround them with professionals.”

Q: How do you help these clients?

A: “As a business owner, you need to have a team of people around you. Do you have a good banker? Do you have a good financial adviser? Do you have an attorney, if you’re looking to exit, who knows how to do mergers and acquisitions? Part of exit planning is knowing if your company is worth enough for you to sell it to meet your goals for retirement and things like that. We can do a business evaluation to find out the current value of the business. If the value is there for you to retire and to sell it right now, we can go down that path and get it listed. If it’s not, what do we need to do to get it to where it needs to be? Selling a business is a lot like selling a house or a car. You need to get it cleaned up and get your financial statements in order. Do you know where all of your property is? With my company, we had hundreds and hundreds of (fuel storage) tanks in the country. I had serial numbers of tanks, we had signed leases and everything was in order to sell that company, whether they are ready to exit the business now, or if it’s in a three- to five-year time span.”

Q: Do you specialize in assisting particular companies or clients?

A: “We haven’t specialized in any type of company. With my background in the fuel and lubricants business, if it’s a company that uses fuel or lubes, I’ve probably been around it, from manufacturing to trucking, ag-related stuff. We’re certainly not limited to that. We’ve sold a dental practice, we’ve sold a communications tower and we’ve sold a greenhouse. Another service that has kind of come about, other than the ones that I’ve mentioned, is just being an intermediary. I’ve had the opportunity this year to work with several companies where we had a buyer, but they had no idea how to price it or where to start. So what I was able to do for those clients is help determine a fair price for the company, help the buyer find a bank to purchase the company and before they go to an attorney to get a purchase agreement together, the basic deal structure is already done. We can save people a lot of money by helping them do that before you get an attorney on each side negotiating a deal for them.”

Q: What is the most important advise that you provide?

A: “People need to have a plan. Hopefully, you have a retirement plan. But what is your plan for your business? Just like me, you’re going to die someday. That business is going to need to be transitioned onto a family member or just sold. And if you don’t have a plan, a lot of these companies, unfortunately, go out of business because they get on a glider path because they have lost their heart for the business several years ago, so every year sales have gone down a little bit. So they have been on this glider path going down. And if I’m going to buy your business, and it’s got a downward trend in sales and everything else, the value of that business is going to be severely affected. If you have business that has shown steady growth, it’s much like banking. If you want a loan, banks usually look at your past three years’ income. If it’s been on a downward trend, the guess is that in the fourth year, it’s going to be lower, yet, versus if you have been on an upward trend. It’s important to just be able to sit down and tell business owners how important their financial statements are. I’ve always been a finance guy, so it’s always been a focus. But if you talk to a lot of people about their financial statements, they are the farthest thing from their mind. But when it comes to selling that business, it is the most important thing to have. Another key thing that I find, and I think schools are kind of guilty of it, is people always think what are the sales of the company? Schools teach sales and net income. It’s not about sales and net income. The value of a person’s business is a direct result of the cash flow of the business, and a lot of people don’t get that connection. You can have a company with $40 million a year in sales, but if they’re losing money, there’s not a lot of business value there. People wanting to buy that company are wanting to know what their return on their investment is going to be.”

This story was originally published December 21, 2015 at 5:32 AM with the headline "Meet Terry Lammers: He’s the man with a business plan."