These founders sold their business, then bought it back. Here’s what they learnt

Only a small percentage of business owners are foolish or brave enough to buy back their business after a successful exit.

Wine deals site Vinomofo was acquired by Catch Group, then its founders, Andre Eikemeir and Justin Dry, bought it back just one year later.

Locomote, a travel tech startup, was sold and then bought back from the NYSE-listed Travelport by its co-founders and cousins David and Ross Fastuca after four years.

Bag brand Crumpler was sold to private equity, then saved from administration by its original co-founder Dave Roper and his daughter Virginia Martin, seven years later.

In 2021 I joined this unique club of foolish/brave entrepreneurs. My husband, Jeff Bonnes, and I bought back the assets of Find A Babysitter from Fairfax/Nine, after 12 years.

Selling your startup can be one of the hardest decisions you make as a founder. After years of stress, uncertainty and risk-taking, cashing in your chips can seem like a very attractive proposition. You’ve put in the hard yards, disrupted an industry, created a valuable business and you can exit on your own terms. It’s often considered the holy grail for small business owners.

But sometimes, for some entrepreneurs, selling the business is not the end of the story. Walking away from a successful business can leave a huge gap. Suddenly you need to figure out your ‘job’ without the business or brand. The dream of sitting on a beach drinking daiquiris doesn’t last long. Founders are not usually the type of people to sit still — they need new problems to solve and actions to take!

Some founders are motivated to buy back their former business after helplessly watching its demise. This wasn’t the case for us, but it’s understandable when former owners are driven to rescue or regain control of a business they created.

For us, we were motivated to keep alive and thriving a business that was providing a valued service to Australian parents.

If you are going to join this hardy (or foolhardy!) club of founders who buy back their businesses, here are some lessons we learnt along the way.

Lessons learnt from buying back a business

1. Use your head not your heart

   Make sure you do your due diligence. Many owners are closely connected to their past businesses. For us, it was like our third child! We started the site from scratch when our two children were under two, when we desperately needed babysitters. We were the first to bring the concept to Australia.

   Find A Babysitter grew rapidly from the outset, disrupted an industry, became the market leader and won several awards. We poured our hearts and souls into it. It was our very first tech startup and it was a great success. It would have been easy to take a leap of faith in buying back the business, without due diligence. Instead, we took time to study the site again, research the market, assess the site’s online presence, evaluate the competitive landscape, gather financial data and talk to customers. There were limits to the due diligence we could do. Buying a business always carries some risk, but you can mitigate risk with some data-driven research.

2. Understand how the market has changed

   Whether it’s been two years or 10 years, things change. Technology moves fast. Mobile phones become supercomputers that fit in your back pocket. Pandemics happen. When you buy back a business you need to review the market to understand its current state. You can’t make assumptions based on the past.

   When we launched Find A Babysitter we understood the parent market intimately. We were the market. We felt what they felt. In 2005 Facebook was brand new and it was considered cutting edge to send a text using multi-tap on your Nokia. In 2022 Facebook is outdated and your iPhone recognises your face! In our market, we’ve learnt that there is more diversity in families today. There’s a mix of family structures with blended families, single parents, same-sex couples and more mature-age parents.  Mums continue to be the key decision-makers, but dads and kids are also involved. Dads are organising the babysitting more often than they were a decade ago. We know that parents are very tech-savvy, to keep up with their children!  The babysitters and nannies are digital natives, multi-screening, consuming and creating media effortlessly.  When buying back your business you need to re-assess the market and understand how it has changed to ensure you can continue to delight your customers as you rebuild.

3. Be prepared to modernise

   Be aware that the previous owners of the business may not have kept up with the rate of change and learning required for the best possible customer experience.  During due diligence be sure to look critically at the product, staff, systems and processes. There may be some necessary changes that will add time or cost to your relaunch. Since we only bought the assets of findababysitter.com.au, we had to rebuild the entire website and back-office technology from scratch.

   That gave us the chance to free ourselves from the old technology the site was built on but was a significant amount to be added to the acquisition cost. We are also in the process of building and launching an app as our customers (especially babysitters) expect all communications via messaging on their phones. You may have to invest to upgrade every part of the business to 2022 standards.

4. Expect the unexpected

   It’s impossible to rule out all of the potential risks. Be prepared for some surprises. Weeks before we closed the deal with Fairfax/Nine, they were hit by a cyber attack. This took down all of their television and digital networks for a full day. Nine chose to keep some sites offline to protect them, including Find A Babysitter.

   Crucially this meant that Nine wouldn’t put Find A Babysitter back online until we bought the assets and rebuilt and relaunched the site. Thousands of customers were left without a service. Years of SEO were slowly slipping away. We couldn’t code fast enough. Our team worked non-stop under an impossibly tight deadline.

   Our home office was covered in post-it notes and burn-down charts.  We celebrated hourly as the post-it notes moved from ‘doing’ to ‘done’.  Within one week of closing the sale, we launched a fully functional ‘new’ Find A Babysitter. It’s likely that buying back a business won’t be smooth sailing. Be prepared to embrace challenges.

5. Back yourself

   Finally, back yourself!  It can be daunting to relaunch a business a decade on. Young entrepreneurs often make front-page news.  As SmartCompany reported though, older age is linked with higher entrepreneurial success.

   Age usually brings hard-won wisdom and perspective. More mature business owners possess more business experience, life experience and skills. They commonly have more social networks and better financial resources to handle challenges. During our 12 years without Find A Babysitter we were busy starting and selling several other businesses. Some successes and a few failures. We learnt a lot more from our failures than our successes in this time.

   We’re grateful for the opportunity to relaunch a business that we previously owned. We value the customers and getting to know them.  We appreciate the business and enjoy our work, building something we love. Again.