Cory Prott, an ETA searcher who acquired and became CEO of HRtoGo, had to engineer a cultural overhaul after discovering he inherited a workforce that had an antagonistic view of their employer. This was one of numerous challenges he faced that an advanced degree in accounting did not prepare himself for, he details in this episode of Search Party.
Joined by Dustin Sellers of NCL Partners and Burton Francis of ECA Partners, the conversation also covers the white-glove service model Prott is building to differentiate HRtoGo in a market crowded with big-box PEOs and self-service tech platforms. The experts describe the importance of self-awareness — knowing what you can and can't do, and hiring accordingly.
Among the key takeaways of this Search Party episode:
Beware of risks the selling owner didn't tell you about - From employee misclassification to undisclosed balance sheet issues, the risks that can make or break a small business acquisition are often things the selling owner knows about and has no obligation to disclose unless directly asked.
Beware of 'over-diligencing' during search - Sellers cautions that a strong M&A or private equity background can actually work against a searcher if it comes at the expense of the fundamentals — cash management, revenue cycles, sales motion and margin — that core accounting teaches and that SME operating reality demands.
ETA searchers need 'lower middle market scrapiness' - Francis describes the defining trait his firm looks for in executives placed into ETA-backed companies as a "no project is beneath me, no ask is beneath me" mentality — an attitude that doesn't show up on a resume but tends to show up in people who grew up around small businesses.
Many entrepreneurs come from entrepreneurial families - Sellers observes that a disproportionate share of the searchers NCL backs were exposed to the SME world through a family member — an early embedding of awareness that no amount of business school coursework fully replicates.
Access a full transcript and searchable content archive on the Search Party Substack.
Lead Sponsor:
NCL Partners https://www.nclpartners.com/
Sponsors:
Boulay https://boulaygroup.com/services/search-funds/
Kilpatrick https://ktslaw.com/
Oberle https://oberle-risk.com/landing-page/search-party/
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