How This Enterepreneur Turned an 'Unsexy' Family Business Into a Multimillion Dollar Success From a last-minute deal collapse to revitalizing his father's company, Michael Richman's journey proves that opportunity can be hiding in plain sight.
Key Takeaways
- Richman turned a family's struggling awning business into a multimillion-dollar success through strategic investments and client-focused improvements.
- Post-sale, Richman now coaches other business owners, emphasizing that success lies in everyday products, not the sexy stuff.
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Michael Richman always wanted to own a business. He'd even put an ad in the paper—"almost like a dating ad"—saying he was looking to buy a business.
After passing on a few, including a company that used banana peels to make skincare and a fruit and vegetable distribution business that would have required him to supervise the staff starting at 2 a.m. every morning, he settled on a small sign installation company with two employees whose owner was ready to retire.
Then came the call.
"I'm driving to drop the escrow check off because, in those days, there was no ACH or things like that," Richman recalls. "My cell phone rings and it's the business owner, saying, 'I talked it over with my wife last night, and I changed my mind; I don't want to retire.'"
Richman was in shock. They'd spent a significant amount on legal negotiations, and in a matter of seconds, the deal was over.
Keeping It In the Family
But failure has a way of opening unexpected doors. In the aftermath of the eleventh-hour disappointment, Richman finally saw an opportunity that had been in front of him the whole time: the cabana and awning manufacturing business his dad and a silent partner owned.
"The business was in desperate need of new blood," Richman says. "But I looked at that as a challenge. I thought, 'If I could turn this around, I could make this into a success that will set the foundation for me to have future successes in my life.'"
This was 2008, when the entire country was falling into a recession, so it was not exactly a prime time for new ventures. But Richman saw possibilities, knowing there was a way to create more value for their clients. He not only put together a business plan but also put his money where his motivation was and bought half the business.
Why half? He was conscious of the fact that there were employees who had seen him "as a five-year-old running around in the factory," he says, "I didn't want any of my employees or customers to think, 'Oh, here's generation two of the company, this guy just slid in here and was able to become the owner without putting any sweat or financial equity in.'"
Owning and Empowering Were the Keys to Success
One of Richman's earlier moves was getting the company to go from renting to owning.
"For 20 years, the company was renting space, and so they'd have to move every couple of years," he says. So he bought the factory they were renting at the time and were able to grow and expand, buying new equipment and more than doubling their revenue.
The second move Richman made was empowering his salespeople to be more like consultants. "We showed them that they could say things [to hotel and building owners] like, 'If you have these cabanas, do you know how much more you can charge?'" Richman explains.
Over time, Academy Awning and Cabanas by Academy worked with the biggest businesses in the world—providing products for every Panda Express in the country and every Starbucks on the West Coast, not to mention Four Seasons and Ritz Carlton hotels.
Twelve years after Richman bought half, they sold it at enough of a profit that he could essentially retire (while he's unable to disclose numbers, he admits that they grew their EBITDA by about 70% during his tenure).
Finding fortune in the mundane
Because Richman credits much of his success with the EOS (Entrepreneurial Operating System), he decided that sitting around didn't appeal and became a certified EOS Implementor. He began coaching other business owners pro bono using the EOS system, and almost immediately, his business coaching firm took off. A long-time Entrepreneur Organization member, he's just been elected president of the EO Los Angeles chapter.
Part of Richman's success goes back to the banana peel skincare and sign installation businesses he initially considered buying.
"I have this big belief in unsexy businesses," he says. "My business was unsexy. I'm unsexy. And when I talk to young entrepreneurs, what I always say to them is, 'Somebody became a millionaire because of every single thing in the room—because of the pen that you're writing with, because of the stapler.'"
Richman's belief that emphasizing is more important than ever.
"There's such a focus on AI and all of these sexy businesses that people lose sight of what really makes our economy and our world run," he says. "You don't really need Facebook to live, but people's HVAC systems will break forever. People are going to need to be sitting on a chair forever. You're always going to need great chair companies."
You could say that Richman thrives in the unsexy. "Those are the companies that I love working with, because a lot of times they don't see the growth potential, but I can," he says. "I love to be able to say, 'I wonder where this business can go if we create some discipline and accountability within their organization and help them identify opportunities they may not have considered.'"
