Ep 549 How a $105M Appliance Dealer Learned the (Second) Most Important Number on an LOI

**Colin Morgan** (0:08)
Hi there, and welcome back to another edition of Built to Sell Radio, the podcast designed to help you punch above your weight in a negotiation to sell your company. I'm the executive producer Colin Morgan. Now, when Tim Hellebrand and his four brothers took Don's Appliances to market, they had built something remarkable. A 55-year-old family business started by their father in a 600-square-foot shop, grown to 105 million in revenue, 11 locations, and 150 employees across the Pittsburgh region.
Six buyers came to the table. The spread between the lowest and higher offer was 60%.
Same financials, same company. Now, most of that gap had nothing to do with the multiple. It came down to working capital, the second most important number on a letter of intent, and the one Tim wishes he had understood two years before going to market. In a business carrying a mountain of inventory across two distribution centers, every buyer had a different view of how much had to stay locked in the company on closing day. Whatever stayed in was money the brothers did not take home. Here to share with you the full story is Tim Hellebrand. Enjoy.

**John Warrillow** (1:13)
Tim Hellebrand, welcome to Built to Sell Radio.

**Tim Hellebrand** (1:15)
Thanks for having me, John.

**John Warrillow** (1:16)
Tell me about Don's Appliances. What's the origin story here?

**Tim Hellebrand** (1:20)
So we are a 55-year-old business. My dad, Don Hellebrand, started it in 1971 He had been a Maytag repairman, service repairman, and at that point, he had two children and decided that he wanted to start his own business. So he started a small business just south of Pittsburgh and upper St. Clair. And it was very small, it was about 600 square feet. And he serviced during the day and he delivered appliances in the evening. And he had a gentleman that he knew that sold the appliances during the day when he first started.

**John Warrillow** (1:58)
By the bootstraps. I love it. And sort of when did you first come to realize your dad owned a business and that you might have some interest in maybe helping out around the company one day?

**Tim Hellebrand** (2:09)
So I'm the oldest of five was probably, that was the last thing I wanted to do when I went to college was sell washing machines.

**John Warrillow** (2:17)
How big was the business at that stage? When you went off to college, how big was the business at that stage?

**Tim Hellebrand** (2:23)
It was, we were doing about a million, a million two a year with two stores.

**John Warrillow** (2:27)
Revenue?

**Tim Hellebrand** (2:28)
In the early 80s, so I graduated college, and when I came over, we had two stores. I graduated and I started the next day after graduation. And I don't know that I thought it was going to be a long-term job, quite frankly, when I started it. But here I am, you know, almost 40 years later.

**John Warrillow** (2:45)
So I catch you up. But at that time, you were a million or two in revenue, a couple of stores was where you were at that time.

**Tim Hellebrand** (2:52)
Yeah.

**John Warrillow** (2:52)
Got it. And what was your old man's reaction to having his kid join the company? Was this his idea or was it just like, oh man, my kid needs a job? Or what was that like?
So, I mean, we're to pick the story up from there, like, you guys grow this thing pretty significantly. Maybe as you think about that trajectory, are there a couple of major milestones that you hit that it looks like back in now, Yeah, we, like I said, we had two stores at the time.

**Tim Hellebrand** (3:55)
My brother's carrying that, and I had a discussion with them about opening a third store, because my dad did not, he did not want to open a third store, but like I said, there were a possibility of having all five of us in the difference, plus my family's. So to be able to support six families, we just felt we maybe had to do something, so.
So we were kind of competitors. We were different parts of the city. So not crazy, but then we merged the businesses together in 2010 At that point, Don's had opened a third store. So when we got together, we had four stores. But that's really, I think, when the business, having the strength of the location, the geographic locations of Pittsburgh that we had, made us a strong business.
The five of us working together definitely helped the business. And then we just started adding stores from there. What really kicked us off, we built a, so we had had a few small warehouses. And in 2014, we built a 50,000 square foot building that had a 38,000 square foot warehouse with offices and a showroom. And that's really when we took off because we were able to have the inventory. We were able to make good buys. We were together in an office and being able to collaborate. We started to build a team that really made us a successful business. We had been successful before that, but that really catapulted us.