Rock LaManna06.03.15
Nothing fast-tracks learning like experience. That couldn’t have been more true for me. For 17 years, I built and bought Vomela Company from my father, revamped it and sold it. Now, I’d like to share the industry knowledge I gained through my experience with you.
Vomela will always have a special place in my heart. I began working there for my father in 1975 and knew virtually nothing about the print, label and converting business.
However, in almost storybook fashion, the chapters of my life at Vomela taught countless life lessons about owning a company and creating a vision to successfully sell it.
Chapter One: My Father’s Decision to Sell Vomela Company
While the prologue probably begins somewhere before my dad, Carlo LaManna, decided to sell the company he worked so hard to help build, I think it’s a good place for page one.
omela began exploding in the years preceding my dad’s tenure as its president and continued under his leadership in the 1980’s. The company that once employed 32 workers now hired more than 100, grossing upwards of $8 million in contract business with gross margins of over 80%.
Six years later, after 40 years of employment for Vomela, my father decided it was time to hang up the hat.
His reasoning? First, he found the technological shift toward digital printing intimidating. That’s understandable for a 40-year veteran of an industry that was on the brink of sweeping changes.
However, his subsequent rationale was refreshingly simple: He was satisfied with his career. With his clients happy and having provided well for his employees and family, retirement was a natural and desirable choice. He looked forward to the days ahead of throwing horseshoes, spending time with his family and soaking up the Florida sunshine.
Satisfaction in retirement is a rare sentiment among most owners, who can hardly picture a purposeful life beyond work.
Moreover, if they do decide to sell, they’re so focused on meeting financial goals – many of which are unrealistic – that they forget about the truly important aspects of selling their business: More time with family, friends and community.
With my father transitioning out, it was time for someone new to step in. We agreed that I was ready to fill his shoes.
Chapter Two: Restructuring, Repositioning and Rebuilding Vomela
As many highs as Vomela experienced throughout my dad’s presidency, the terrain was nothing short of rocky toward the end.
3M Company, who comprised 90% of our sales, decided to transition its print operations team and converting in-house, effectively phasing us out over the next three years.
When 3M presented us with the opportunity to merge, I had a tough choice to make: Expand on our own or exit, and pass the buck to 3M.
Well, I wasn’t ready to exit. Admittedly naive and ready for a challenge, I chose the more precarious path of independence - and to reshape the company in the wake of our changing landscape. But I couldn’t do it alone.
Fortunately, my father had invested three million dollars in Vomela’s future between 1983 and 1985, a portion of which immediately went toward hiring outside consultants. Although I hadn’t determined our exact direction, I figured at least there was some money and intelligent people backing us.
Having assembled my team of experts, we dug deep and began formulating our vision for a new and more profitable tomorrow. After much brainstorming, we developed a solid three-step, five-year plan:
Rightsizing – With sales strategically planned to decline by 35% annually, I knew we needed a staff restructure. That meant downsizing from 150 employees to 32.
Selective retention was key. We kept skilled workers who could grow with Vomela’s changing platform, and hired new, enthusiastic managers who were eager to earn valuable experience with an innovative company.
As you can imagine, downsizing wasn’t a popular decision among my staff. Their bitterness was compounded by the fact that my father had never laid off a single person – he only understood growth and profit. Now, here I was laying off 30 at a time.
Yet, I took solace in knowing that this was the right move for my company (not to mention my father’s foresight of giving them a strong pension plan).
Strategic Investing - I wanted Vomela’s history of innovation to continue under my tutelage. We relied on extensive market research to understand our industry’s future, something done by far too few businesses.
The only way to safeguard the future is to strategically plan for it, which takes thorough research and action. It may have been the 1980s, but our sights were set well into the 90s!
Drawing on our findings, we invested in cutting-edge, previously unknown CAD-CAM technology worldwide, and divested from yesterday’s machinery. It was out with the old, in with the new.
Suddenly, our new capabilities outmatched our competition, especially for prototypes, short-run orders and quick turns. At that time, most printing and converting companies were structured for large-run orders. By focusing on exceptional quality, speed and short runs, we carved our own niche, rising as industry leaders and setting our own prices.
Perhaps more important than acquiring this new intellectual property was hiding it. We knew the longer we kept our new toys a secret, the longer we’d persist without any competition.
Then, we took it one step further by hiring specialists in protecting our intellectual property. The days where you could depend on a firm handshake and trusted words were over. In this climate, legal protection was a must.
The strategy worked. With our new structure in place, customers began flocking. Even 3M Company returned for a piece of the action.
Diversifying and Partnering – Our ultimate goal was to brand ourselves as the worldwide leader in printing and converting technology. But we couldn’t do it alone. The final piece of the puzzle was developing partnerships to help fill the gaps in our remodeled company.
One of the first places I turned was 3M. We knew they – and their customers – lacked our new technology and updated processes. So, we formed a strategic partnership: They referred their customers to Vomela, and in return, we began joint ventures, sales calls and marketing strategies.
At this point, Vomela underwent a dramatic shift in branding. We were previously known as manufacturers and industrial leaders, but now we gained recognition in the sales and marketing fronts, just like 3M.
With the proper gears in place, our wheels began to turn. We were more professional, strategic and organized than we’d ever been. For me, it was the perfect time to purchase the business outright...or so I thought.
A harsh reality set in when I realized I didn’t have the capital to buy Vomela on my own. If I wanted the company, I’d need a business partner. Tom Auth, a financial expert who’d already bought more than 30 successful companies, became the man.
With him by my side, my father agreed to sell the company in a 40-60 split favoring Tom. I wasn’t the majority owner, but I’d have to deal with it.
For three years after officially purchasing the company, Vomela continued to flourish. Sales and margins were at an all-time high, and our investments were booming. While Tom controlled our finances, I ran day-to-day operations believing I was just part of the package.
Then, in 1993, everything changed when Tom asked me to sell him my percentage of the company.
Chapter Three: If I Need to Sell, I’m Going to Get My Share
I had no interest in selling the company. Vomela had been my life for 17 years, for crying out loud! But if I was going to sell my share, I was going to at least get my piece of the pie.
I’d learned from my father and was no longer a rookie in the selling process. I knew that strategy would be key to receiving the best deal. Here’s what I did:
Hired independent expertise – As partners, Tom and I had previously shared the same consultants – lawyers, accountants and the like. Now, I needed to hire my own.
Few owners in my position spend their money on top advisers. They simply don’t understand the return on investment. However, if you want to avoid being out-maneuvered, mediocrity isn’t going to cut it.
Tom had top-notch advisers, so I needed matching intellect. I immediately contacted accountants, bankers and lawyers, who helped me draft a contract and provided invaluable guidance.
Sought emotional guidance – This was uncharted territory for me, and I was scared. Hiring a personal coach for emotional guidance afforded me some direction through the selling process and my post-close transitional period.
Solicited a valuation – Finally, I ordered a valuation, which paid off two-fold: First, it told me what the company was worth. Second, it presented benchmarks indicating where Vomela needed improvement.
Drawing on the appraisal’s findings and my freshly-hired experts, I grew the business considerably over the next 19 months. Then, when I returned to the negotiation table with Tom, I knew my stuff! The payoff? I quintupled his original offer.
Watching my father own and sell Vomela – and going through the motions myself – opened my eyes to what it truly takes to succeed as a business owner. It isn’t always fun, it certainly isn’t easy, but if you’re willing to learn, adapt and accept help, you’ll be handsomely rewarded.
Rock LaManna, President and CEO of LaManna Alliance, helps printing owners and CEOs use their company financials to prioritize and choose the proper strategic path. He can be reached at Rock@RockLaManna.com.
Vomela will always have a special place in my heart. I began working there for my father in 1975 and knew virtually nothing about the print, label and converting business.
However, in almost storybook fashion, the chapters of my life at Vomela taught countless life lessons about owning a company and creating a vision to successfully sell it.
Chapter One: My Father’s Decision to Sell Vomela Company
While the prologue probably begins somewhere before my dad, Carlo LaManna, decided to sell the company he worked so hard to help build, I think it’s a good place for page one.
omela began exploding in the years preceding my dad’s tenure as its president and continued under his leadership in the 1980’s. The company that once employed 32 workers now hired more than 100, grossing upwards of $8 million in contract business with gross margins of over 80%.
Six years later, after 40 years of employment for Vomela, my father decided it was time to hang up the hat.
His reasoning? First, he found the technological shift toward digital printing intimidating. That’s understandable for a 40-year veteran of an industry that was on the brink of sweeping changes.
However, his subsequent rationale was refreshingly simple: He was satisfied with his career. With his clients happy and having provided well for his employees and family, retirement was a natural and desirable choice. He looked forward to the days ahead of throwing horseshoes, spending time with his family and soaking up the Florida sunshine.
Satisfaction in retirement is a rare sentiment among most owners, who can hardly picture a purposeful life beyond work.
Moreover, if they do decide to sell, they’re so focused on meeting financial goals – many of which are unrealistic – that they forget about the truly important aspects of selling their business: More time with family, friends and community.
With my father transitioning out, it was time for someone new to step in. We agreed that I was ready to fill his shoes.
Chapter Two: Restructuring, Repositioning and Rebuilding Vomela
As many highs as Vomela experienced throughout my dad’s presidency, the terrain was nothing short of rocky toward the end.
3M Company, who comprised 90% of our sales, decided to transition its print operations team and converting in-house, effectively phasing us out over the next three years.
When 3M presented us with the opportunity to merge, I had a tough choice to make: Expand on our own or exit, and pass the buck to 3M.
Well, I wasn’t ready to exit. Admittedly naive and ready for a challenge, I chose the more precarious path of independence - and to reshape the company in the wake of our changing landscape. But I couldn’t do it alone.
Fortunately, my father had invested three million dollars in Vomela’s future between 1983 and 1985, a portion of which immediately went toward hiring outside consultants. Although I hadn’t determined our exact direction, I figured at least there was some money and intelligent people backing us.
Having assembled my team of experts, we dug deep and began formulating our vision for a new and more profitable tomorrow. After much brainstorming, we developed a solid three-step, five-year plan:
Rightsizing – With sales strategically planned to decline by 35% annually, I knew we needed a staff restructure. That meant downsizing from 150 employees to 32.
Selective retention was key. We kept skilled workers who could grow with Vomela’s changing platform, and hired new, enthusiastic managers who were eager to earn valuable experience with an innovative company.
As you can imagine, downsizing wasn’t a popular decision among my staff. Their bitterness was compounded by the fact that my father had never laid off a single person – he only understood growth and profit. Now, here I was laying off 30 at a time.
Yet, I took solace in knowing that this was the right move for my company (not to mention my father’s foresight of giving them a strong pension plan).
Strategic Investing - I wanted Vomela’s history of innovation to continue under my tutelage. We relied on extensive market research to understand our industry’s future, something done by far too few businesses.
The only way to safeguard the future is to strategically plan for it, which takes thorough research and action. It may have been the 1980s, but our sights were set well into the 90s!
Drawing on our findings, we invested in cutting-edge, previously unknown CAD-CAM technology worldwide, and divested from yesterday’s machinery. It was out with the old, in with the new.
Suddenly, our new capabilities outmatched our competition, especially for prototypes, short-run orders and quick turns. At that time, most printing and converting companies were structured for large-run orders. By focusing on exceptional quality, speed and short runs, we carved our own niche, rising as industry leaders and setting our own prices.
Perhaps more important than acquiring this new intellectual property was hiding it. We knew the longer we kept our new toys a secret, the longer we’d persist without any competition.
Then, we took it one step further by hiring specialists in protecting our intellectual property. The days where you could depend on a firm handshake and trusted words were over. In this climate, legal protection was a must.
The strategy worked. With our new structure in place, customers began flocking. Even 3M Company returned for a piece of the action.
Diversifying and Partnering – Our ultimate goal was to brand ourselves as the worldwide leader in printing and converting technology. But we couldn’t do it alone. The final piece of the puzzle was developing partnerships to help fill the gaps in our remodeled company.
One of the first places I turned was 3M. We knew they – and their customers – lacked our new technology and updated processes. So, we formed a strategic partnership: They referred their customers to Vomela, and in return, we began joint ventures, sales calls and marketing strategies.
At this point, Vomela underwent a dramatic shift in branding. We were previously known as manufacturers and industrial leaders, but now we gained recognition in the sales and marketing fronts, just like 3M.
With the proper gears in place, our wheels began to turn. We were more professional, strategic and organized than we’d ever been. For me, it was the perfect time to purchase the business outright...or so I thought.
A harsh reality set in when I realized I didn’t have the capital to buy Vomela on my own. If I wanted the company, I’d need a business partner. Tom Auth, a financial expert who’d already bought more than 30 successful companies, became the man.
With him by my side, my father agreed to sell the company in a 40-60 split favoring Tom. I wasn’t the majority owner, but I’d have to deal with it.
For three years after officially purchasing the company, Vomela continued to flourish. Sales and margins were at an all-time high, and our investments were booming. While Tom controlled our finances, I ran day-to-day operations believing I was just part of the package.
Then, in 1993, everything changed when Tom asked me to sell him my percentage of the company.
Chapter Three: If I Need to Sell, I’m Going to Get My Share
I had no interest in selling the company. Vomela had been my life for 17 years, for crying out loud! But if I was going to sell my share, I was going to at least get my piece of the pie.
I’d learned from my father and was no longer a rookie in the selling process. I knew that strategy would be key to receiving the best deal. Here’s what I did:
Hired independent expertise – As partners, Tom and I had previously shared the same consultants – lawyers, accountants and the like. Now, I needed to hire my own.
Few owners in my position spend their money on top advisers. They simply don’t understand the return on investment. However, if you want to avoid being out-maneuvered, mediocrity isn’t going to cut it.
Tom had top-notch advisers, so I needed matching intellect. I immediately contacted accountants, bankers and lawyers, who helped me draft a contract and provided invaluable guidance.
Sought emotional guidance – This was uncharted territory for me, and I was scared. Hiring a personal coach for emotional guidance afforded me some direction through the selling process and my post-close transitional period.
Solicited a valuation – Finally, I ordered a valuation, which paid off two-fold: First, it told me what the company was worth. Second, it presented benchmarks indicating where Vomela needed improvement.
Drawing on the appraisal’s findings and my freshly-hired experts, I grew the business considerably over the next 19 months. Then, when I returned to the negotiation table with Tom, I knew my stuff! The payoff? I quintupled his original offer.
Watching my father own and sell Vomela – and going through the motions myself – opened my eyes to what it truly takes to succeed as a business owner. It isn’t always fun, it certainly isn’t easy, but if you’re willing to learn, adapt and accept help, you’ll be handsomely rewarded.
Rock LaManna, President and CEO of LaManna Alliance, helps printing owners and CEOs use their company financials to prioritize and choose the proper strategic path. He can be reached at Rock@RockLaManna.com.