Company growth is the fuel for all businesses. JC Maldonado and BizGro Partners take a unique approach to helping their clients grow. For some companies that growth means more sales, for others firms it can mean the acquisition of company, or a merger. In every situation, JC and his partner commit to their clients fully, often investing their own capital or resources in the companies. I sat down with JC to learn more about BizGro Partner’s compelling approach.
Jane Tabachnick: What is BizGro Partners?
JC Maldonado: BizGro is a business development and investment firm. Our concentration is helping companies doing two to twenty million dollars of revenue, to grow and expand. Typically, we work with businesses that are in the business to business selling arena. Mainly, manufacturers, distributors, import/export companies, telecommunication warehousing, and some healthcare companies that sell business to business. Business services type organizations like IT companies and telecom companies, etc.
What we do with these businesses is we help them grow. We have two methods in which we grow them. One, have a sales organization in which businesses outsource sales functions to us. We serve as a selling agent on behalf of our client, as an alternative to them hiring in-house sales people. We basically sell for them. We target business accounts for them and bring in new clients. That’s one way in which we grow them.
The other method in which we achieve growth for our clients is through business acquisitions. Instead of going after business accounts, some of our clients request us to go after business acquisition opportunities. There we represent our client in the transaction. We put the deal together, and help negotiate the terms of the deal. Then we put the funding together or raise the money. Or, in some cases, invest money in the deal ourselves. These are two methods of growth, either more clients or help them buy other companies.
Jane Tabachnick: Great. Can you be more specific about the kind people or companies that you work with?
JC Maldonado: I work with overall business to businesses. Again, all of them are businesses that sell to other commercial entities. I’m making the distinction between a business to business and a consumer related business, in which you’re going after the end user consumer. The businesses we typically work with are in the manufacturing arena; they are wholesale distributors. They’re transportation warehousing companies. Sometimes they’re in healthcare. The one commonality between all of them is that they sell to another commercial entity. They sell to other businesses. They sell to corporate entities. They sell to nonprofits. They sell to some sort of commercial entities.
Jane Tabachnick: Got it. Can you tell us how BizGro Partners got started?
I started the company fifteen years ago. Then my brother pretty much came on board during that time, and became a partner within the first year that we were in business. It was just me and my brother. Basically, we were in the same age bracket. We started as more of a boutique investment banking firm that focused on small companies, buying and selling and raising money for small companies.
We worked with businesses that wanted to sell, wanted to sell their company, wanted to buy another business or wanted to raise money. That’s kind of where it started off. Over the years, we developed a marketing and selling service that would help these same clients grow their client base. Then the whole idea of helping them sell their businesses, so we focused on helping entrepreneurs grow their companies. The two methods in which we do it is either we help them get more clients or we help them buy a company. So we maintained the initial investment-banking component while adding this marketing service.
Jane Tabachnick: Interesting. You offer a lot of outsource services that a lot of companies do in-house. Why out source it?
JC Maldonado: I don’t really look at it as an outsource. I kind of look at us as growth partners for our clients. Hence the term, BizGro Partners. Outsource almost entails that you’re outsourcing some administrative part of your business that you’re better off having someone else do for you to save you time so you can focus on growing your company, like, HR, bookkeeping, or payroll, etc. I don’t really look at us as an outsource service, per say. I look us more like a company that partners up with a client so that we can go and grow the company. Grow their business. I kind of look at us as growth partners. The owner is focused on running their business and managing it, while we’re actually executing specific growth for them.
The way we have our fee structure set up is a lot of it is based on a profit share, on business that we bring in. A little different than outsourcing, in my mind.
Jane Tabachnick: Okay. Great. Thank you for clarifying that. What kind of companies benefit the most from the services and aligning or setting up the structure that way as a partnership?
JC Maldonado: It’s usually businesses that are, I’d say, between two and twenty million dollar revenue. Maybe they have ten to one hundred employees. The owners are really looking to grow the business to the next level. They’re looking to take the business from two to five million. They’re looking to take the business from five to ten million. They’re looking to take the business from ten to twenty. Maybe from twenty to fifty.
They understand that they just can’t do it on their own. They’re better off trying to partner with an outward entity to help them achieve growth. Usually, it’s an entrepreneur or set of entrepreneurs or family that really sees potential in their business and they want to take it to the next level. They want to grow.
Jane Tabachnick: How about what is your secret sauce? You just spoke about how companies can’t or haven’t done it on their own. What is the secret sauce that you bring that really helps them get to that level of success that they’re looking for?
JC Maldonado: We’re a two trick pony, right? We either help them increase their sales or we help them buy the company. On the buy side front, the whole concept of that is acquiring other companies. Most business owners don’t have the background to do it. They don’t understand how business acquisition works. Even if they do, there’s a lot of misconceptions that they have regarding business acquisition. That’s one of our expertise is to come in and really identify the right kinds of acquisition targets and actually completing the deal. Putting the deal together and raising the money.
Most owners, when they think of acquisitions, they think in terms of, “Oh, I need money to acquire a company.” Where with us, we get them to realize that you don’t need any money to acquire a company. You need a good deal and then you raise the money to do the deal. That’s one of the advantages of being an existing entity. And that’s one of the advantages of buying an existing entity that’s already producing sales and profits and has customers. That’s one of the secrets. Getting owners to realize that you don’t need money to acquire a company. You just need skill and creativity. That’s one part.
The second secret part is … In most business to business companies, you need to have some sort of outbound selling and marketing process. In today’s world, the world has changed a little bit about how you go about prospecting for business accounts. We have a system that taps into all the modern day methods in which you do that. Ranging from personalized emails to automated emails to Linkedin outreach combined with modern day telephone, telemarketing approaches. Combining all these methods of prospecting enables us to create a methodology for our client in which they can generate ongoing leads for new business accounts.
Jane Tabachnick: Super. Is there anything that I haven’t asked you that I should have asked that you want to add?
JC Maldonado: We have fifty clients. Thirty-five of them are in the marketing selling side. Fifteen of them are companies that we help through acquisitions. In addition to that, we have three clients in which we actually take an ownership position in the businesses. We’ve bartered our labor or invested or own capital to take significant ownership in those companies. We do the same things that we do for our fifty clients for these three companies but our compensation for the three companies in which we have ownership are based on profits. Then, of course, we have ownership positions for when the company gets sold, we would be one of the owners, so we would take the compensation.
Jane Tabachnick: JC it’s been very, very enlightening. Thank you so much.