Dear Stephen,
For many years I've owned a small-sized #HermanMiller dealer in the Southeast. I'm a second-generation owner. Three years ago, I became one of the hundreds of new #MillerKnoll dealers. I tried to better understand our role as a company since we had such a long history with just Herman Miller, even though we were one of their smaller dealers. Like in many geographies throughout the US, the large Herman Miller or large #Knoll dealers who became even more powerful #MillerKnoll dealers scooped up what was left of our market share. Yet we still led with the MillerKnoll name, and it brought great value to my company.
I have been approached by one of my direct competitors to acquire our dealership, lock, stock, and barrel. But it wasn't exactly the offer I was expecting, so I said no. Then, a second offer came my way, this one from one of the real giants on the east coast that's partially owned by private equity. This company made us an offer and it also wasn't what I was expecting, and so once again I turned it down. Long story short, none of the offers were anything I could retire with, and I'd have to continue to work to sell business as an employee of the new company.
I think in the back of my head, I'm expecting someone to come my way and make me an offer I can't refuse. I guess in other words, make me rich or pay me for what I feel the business is valued at, regardless of the EBITDA. Not only has it not happened, but it's now suddenly conceivable that I might even lose the MillerKnoll franchise. I feel like I've lost my chance and I'm not sure what my options are now. What should I do?
Signed,
Penny Wise and Pound Foolish
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Dear Pennywise,
Thank you for your question. I've received many letters like yours, especially from owners of MillerKnoll dealers both big and small. A great portion of our executive recruiting is for contract furniture dealers, so we also hear this same question from every dealer – whether it be a #Steelcase, #Haworth, or #Allsteel dealer, you name it. Dealer owners are often looking for an exit strategy and they're disappointed with what they believe is the real value of their business.
To get to your question, I'll point out that many MillerKnoll dealers, especially in larger metropolitan markets like New York City where a former Knoll or Herman Miller dealer that is not as big as the largest dealers like #EvensonBest or #COR (Creative Office Resources), may have to merge. For instance, #Arenson's merged with COR and then a smaller dealer #DOG merged with COR. Then there are dealers like you, some of the smaller MillerKnoll dealers, who are still there, surviving. Are these smaller dealers still relevant to their customers or to MillerKnoll? Only time can tell.
Instead of understanding the value of a dealership based on the EBITDA, many dealer owners allow the value of their dealership (in their mind) to be informed by their ego. I call that valuation method "Ego vs. EBITDA" – good luck with that!
Here's what's important: Yes, the MillerKnoll name adds cachet to your dealership, but if the customers appreciate the service you and your employees are offering them, then other brands from open-line manufacturers such as #Global, #AIS or #Friant that "mimic the majors" are plentiful, giving you options to survive and thrive.
As far as your specific dealer, since you weren't a big MillerKnoll dealer anyway, concentrate on selling the many open lines that are available to you and continue your business. Or diversify, maybe sell more wall products! Stop fretting about the train that has left the station and just hop on the next one. You may have become irrelevant compared to another MillerKnoll dealer, but you're hopefully not irrelevant to your existing customers! Or, if you're reading this and you work for one of these smaller MillerKnoll dealers and you think your boss is holding out to eventually sell the company, you should be looking for your next job at another MillerKnoll dealer. Start by going to one of your biggest competitors. Or, if you don't know what to do, send your resume to me – The Viscusi Group recruits for dealers across the United States.
However, back to you as a dealer owner, some of the best former MillerKnoll dealers are getting richer (and fast) by becoming some of the best #Global, #AIS, or #Friant dealers in the country… it really doesn't matter, you fill in the name of any open line manufacturer and go sell the hell out of it! After all, you're still selling office furniture.
Signed,
Stephen