Over the past 25 years John Howman has founded, purchased and sold several companies.
After he and his business partner sold Raffel Comfort Sciences LLC in July, Howman became a group chairman for The Executive Committee (TEC) and has brought his business expertise, including experience in mergers and acquisitions, to the group of business owners and CEOs.
“I’ve envisioned becoming a TEC chair since the mid-1990s,” Howman said. “When I sold Raffel in July, I did some soul searching and thought, ‘Why not get involved now?'”
TEC, which was founded as The Executive Committee, is active in Wisconsin and Michigan, but is affiliated with Vistage International. Both groups are privately held and operate as sister organizations. TEC has about 650 members in Wisconsin who are members of 53 groups around the state. Howman is now the chairman of one of the 53 groups.
Howman founded Allied Computer Group Inc. in 1983, growing the business from a one-man operation into a $55 million, 350-employee computer sales and service firm. While he owned the firm, he made several add-on acquisitions, before he sold it in 2003.
In 2004, Howman and a business partner acquired Raffel Comfort Sciences, a Cedarburg-based company that designs and manufactures components for furniture that use electronic controls. During Howman’s tenure with Raffel Comfort Sciences, he outsourced many of its operations – eliminating positions such as human resources, accounting, warehousing and distribution, and IT.
When the company’s relationship with its Chinese supplier soured, Howman and his business partner decided to sell the company rather than find a new manufacturer. Raffel Comfort Sciences was sold to a Milwaukee-area investor for an undisclosed sum.
“We weren’t making the kinds of profits we hoped to,” Howman said. “And the company that bought it has a focus on furniture and a higher degree of expertise. It was easier for them to rebuild the manufacturing end.”
Most TEC groups have 10 to 16 members. Each member agrees to keep matters discussed in the group confidential, allowing the members to be candid about the issues they face in their companies or personal lives.
Howman believes the lessons he learned in both Allied Computer Systems and Raffel Comfort Sciences will be useful in his new position as a TEC chair, because of the organization’s mission to enhance the lives of CEOs and the owners of privately held businesses.
“The value of TEC is the value that the members of the group bring to each other,” Howman said. “It’s important to be able to go to a place where you can feel safe, where you can speak freely whether it’s about your personal or business life. That’s one of the things that makes TEC work.”
Howman routinely meets one-on-one with his group members to best understand their businesses and issues they may be facing, so that those issues can be expressed to the group if necessary.
While he is quick to say that he is not an expert in mergers and acquisitions, Howman acknowledges that his experiences will be useful for the members of his TEC group, especially if they are going through a company sale for the first time.
“For closely or privately held businesses, it can be an emotional process,” Howman said. “If you are moving from a family business to one that may be sold, helping prepare for that process can be a very big deal.”
Some business owners may think that timing the market to receive the highest possible multiple and therefore the highest possible price for their business, is the most important part of a potential sale, Howman said. However, they might be missing one of the most important deal fundamentals.
“What is important is the condition of the business, is it ready to sell?” Howman said. “A lot of times a business owner becomes very focused on the multiple or price, and there are a lot of other things they should be thinking about.”