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Selling a Business to Internal Buyers - Interview with Charles Hall

Episode 16: Louisville Certified Financial Planner Jeb Jarrell interviews Charles Hall who is the former president of the Association Services Group. He recently sold his interest in the business and is now semi-retired. They’ll discuss how Charles build the business, his transition out of the business and what life is like after the sale of his business.

Meet Charles Hall

Charles is a University of Georgia alumnus. He focused primarily in agriculture. In 1995, he launched an association management company. It’s a niche industry consisting of roughly 400-500 similar companies. Charles provided professional services to associations and non-profit organizations.

The initial assumptions Charles made about the revenues and spare time proved to be different, but he was blessed with a great staff and the business continued to grow for the next 26 years. The company began servicing one association. At the time he sold the business, they were providing full services to 17 associations and roughly 6 associations that were receiving additional services. The company had grown to 32 employees.

selling a business discussion with certified financial planner Jeb Jarrell

What Types of Associations Were Involved?

Initially the associations were in various agricultural segments. Charles helped them to manage trade shows. Now, approximately 40% of the associations his company managed were agriculturally based.

What Types of Services Did He Provide for the Associations?

A typical association needs a wide variety of professional services including administrative, financial, communications, meeting management, executive director roles, etc. It’s about equipping them to pursue their missions.

The business model Charles developed enabled the associations to use fractional time for the various services, instead of hiring full-time employees to manage the various roles and responsibilities. An association management company can provide functional expertise rather than the association trying to hire 1 person to handle everything, or multiple people to handle activities that might not require full-time effort. It’s definitely a cost-effective alternative.

When Does an Association Typically Decide to Outsource These Activities?

Charles explains that this alternative is generally recognized by associations and non-profits, but it wasn’t always the case in the early days. The fact is, an association management company doesn’t necessarily need to have a background in a specific type of industry segment. The company understands how to effectively and profitably run an association. They don’t have to be subject-matter experts.

When Did Charles Begin Looking for the Next Generation?

The early years were all about growth. They constantly looked for new ways to serve their clients and to add additional value. A single association client engagement required them to double from 4 to 8 employees almost overnight.

Maintaining the Company Culture

Charles admits that it’s a transitional process. Luckily, at the time, some of the association’s team stayed on board and became basically a second office for Charles’ group. Still, it was mix of experience, talent and expectations. He knew he needed to carefully work through the evolution.

When it came to hiring additional staff, Charles evaluated the skills the prospective hire could bring, but also how he/she would fit into the organization. When the company was smaller, they performed group interviews and he relied on consensus in the hiring decision. This approach also generates buy-in from the staff in this important decision. They needed to step up and help the new person acclimate.

Developing New Leaders

Initially, Charles admits he wasn’t looking to hire a crop of new leaders who could become owners. After all, they were just getting started and ramping up. He wanted to develop existing staff in to organizational leaders. There was a need to prepare to provide new executive directors for the client associations.

Over time, several expressed an interest in taking on more of an owner’s role. That’s how the discussion began.

The Transition Process

Charles describes the 2010-2012 time period. He turned 60 in 2010. It was time to begin thinking about retirement. His future compensation was dependent upon the ongoing success of the company.

He was now faced with marketing Association Services Group. In 2014, he hired a financial consultant (Fred) to discuss the plan for succession. It was now time to being working on the company, instead of in the company.

Given that Charles’ children were not interested in taking over the company, he thought he’d need to identify an external buyer from similar business. During the process, Fred was instrumental in helping Charles to focus on several critical factors that would impact the valuation of the company.

In 2016, it still didn’t feel right. They hadn’t found the right buyer for the company. That’s when the idea of selling the company to an internal buyer became an option. Interestingly, the 3 senior managers actually had an interest in a potential buyout. The planning and discussions resulted in the creation of an operating agreement. In January of 2017, each of the 3 partners bought a 7% stake in the company. Charles maintained 79% percent.

There was a plan for the partners to learn more and to eventually buy the remaining stake in 3-5 years. Although, nothing was guaranteed.

In January 2021, Charles knew the time was right. They settled on a purchase price. The 3 partners secure an SBA loan and the company sale was completed on September 30, 2021.

Giving up Control of the Business

Jeb comments on the smart way the sale was planned and executed over time. Now that it was final, Charles had to come to terms with the fact that he no longer controlled the business he founded.

Charles admits that many business struggle with this transition. Nonetheless, he wanted the new owners to be successful. It’s been almost a year. The new owners are doing well. Charles is around to answer questions and offer advice, when asked, but he lets them run the business operations.

Luckily, Charles doesn’t think he’d change how it happened. It was a successful transition. ASG, as a company, is still intact and thriving. Each of the owners brought significant experience with the company to their new roles.

Other Members of the Transition Team

Jeb asks about others who were involved in the planning and preparation. Charles explains that he obviously involved his CPA. In some cases, a selling owner might decide to finance part of the deal, but this buyout was different. It was a complete sale.

Charles discusses some of the company’s long-term clients. ASG is a relationship business. There was a need to have effective communication with these and other clients. This needed to avoid disruptions and effectively preserve those client relationships.

The Retirement Life

As of the recording of this episode, it’s been about 11 months since the sale. Charles discusses what life is like, now. There was a transitional contract in place, so Charles continued to work with a small group of clients until new executive directors could be hired and engaged.

Charles still comes to the office a few days a week to help. He still maintains a role with the Georgia Fruit and Vegetable Association. He assists with grant writing, legislative work and other activities.

Now that Charles has gone from 80 hours a week to 35, he may actually continue to work. He enjoys it and still adds value. It’s what he knows and it gives him a purpose.

Charles mentions a book by Wes Moss, What the Happiest Retirees Know. He highly recommends it. Wes explains that you need at least 3 core interests. Anything less and you’ll get bored and the experience will be less than what you hoped it would be. There are other tips and advice. It’s a great book for anyone considering retirement.

What Was Charles’ Favorite Failure?

Charles admits he failed at a lot of things. However, he views them as setbacks, not failures. He relates his experience with Amway.

What Would He Write on a Billboard?

It would have to be something about going to church, know Jesus and enjoy life. You have to have a moral basis and it has to be more than just about you. How you live your life is important.

I’d like to thank Charles Hall for taking the time to walk us through his journey. When you get the opportunity to learn from someone who created, developed, grew and eventually sold a business, it’s worth the time to benefit from that experience.

At the end of the day, you should sit down with a qualified, investment advisor who can help you to think through your strategies. A good advisor will bring a solid perspective, but also know how to develop and implement your strategy. You can schedule a meeting with Louisville Certified Financial Planner Jeb Jarrell, by clicking this link.

Did You Like What You Heard Today?

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If you’d like more information about Jeb Jarrell and his firm, visit Jeb’s website at You can also follow him on Facebook.

Thanks for listening!


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