"There are lots of people out there with money," says Tom Kramer, the president and CEO of Smith Cameron Process Solutions. "They all come with pluses and minuses."
Kramer has experienced both. He bought his current company in 2011 and set it on the path to growth with financing from trusted partners. Smith Cameron, an industrial equipment distributor, has grown to 48 employees from 31. Its current revenue is $21 million.
It was a different story in 2006, when Kramer moved back to Canada after living in the United States for over 20 years to take on the presidency of another company. There was an agreement between him and the three shareholders that when the time came for them to sell, he would be the buyer.
That plan didn't work out so well, however, when the majority shareholder decided to test the market value of the company by shopping it around.
"That's just not the right way for a management buyout to happen," said Kramer. "You can't test the value of the market and execute a management buyout at the same time – they're just inconsistent with each other."
Taking the slow and steady approach when it comes to looking for badly needed funds can be difficult. Kramer credits membership in a CEO forum, in his case Young Presidents' Organization, for helping him develop a longer view.
He's also learned that he needs to take the time to find compatible business partners he can trust.
"If you're in a cage with someone who's not a lot of fun or isn't in alignment with the direction and vision that you have, it's not going to be a very pleasant experience," he said.
"Oftentimes that happens because we're looking for the quick answer."
