Acquiring Minds: How to Reinvent a $1M Candle Manufacturer Hosted by Will Smith | Release Date: April 14, 2025
Introduction
In this compelling episode of Acquiring Minds, host Will Smith sits down with Adam Goldberg, the owner of Sarakon, to explore the intricate journey of buying and turning around a struggling candle manufacturing business. Adam shares his experiences, the challenges he faced, the mistakes he made, and the strategies he employed to stabilize and grow the business.
Guest Background: Adam Goldberg's Entrepreneurial Journey
Adam Goldberg entered the entrepreneurial world early, influenced by his father, who built a successful retail business in Quebec. Adam's extensive experience includes running two multimillion-dollar businesses before deciding to venture into acquisition entrepreneurship.
Key Points:
- Family Business Foundation: Adam began working in his father's large retail business, BU, started in 1972, which had grown to 80 stores with annual revenues of approximately CAD 75-80 million by 2001. (05:07)
- Early Leadership: By 1995, Adam served as the president of BU until selling his stake to his brother in 2000. (05:55)
- Diversified Ventures: After BU, Adam explored various business opportunities, including a failed jewelry store expansion and a successful wholesale costume jewelry business, which he sold in 2020 for a significant exit.
Notable Quote:
"I've built businesses from the ground up, but even with that experience, buying a small business is a whole different ballgame." — Adam Goldberg (00:53)
The Leap into Acquisition: Purchasing the Struggling Candle Manufacturer
At 59, after a brief retirement in Florida, Adam refocused his entrepreneurial spirit on a nearly shuttered candle manufacturer in Montreal. The business had plummeted from CAD 5 million in sales to just over CAD 1 million.
Key Points:
- Motivation to Re-enter Business: Despite initial attempts at retirement, Adam's passion for entrepreneurship drew him back to the market. (00:38)
- Business Selection Criteria: Adam sought a business that aligned with his retail and wholesale experience, favoring made-in-Canada products amidst rising tariff concerns. (27:08)
- Purchase Details: The business was acquired for CAD 600,000, split between goodwill (CAD 300,000) and working capital (CAD 300,000). (33:07)
Notable Quote:
"Buying a business wasn't part of my original plan, but when the right opportunity came along, I took the plunge." — Adam Goldberg (23:05)
Initial Challenges and Mistakes
Upon acquiring the candle manufacturer, Adam faced immediate hurdles that hindered the business's revival.
Key Points:
- Loss of Major Clients: Shortly after the acquisition, key clients like Staples ended their relationships, reducing revenue drastically. (40:01)
- Overhiring and High Overhead: In an attempt to professionalize, Adam hired a VP and a product development specialist, leading to excessive payroll expenses. (43:08)
- Lack of Due Diligence: Adam underestimated the importance of thoroughly understanding the existing client relationships and the value of inventory, leading to obsolete stock and loss of major accounts. (32:45)
- Operational Inefficiencies: The business operated with outdated systems and manual processes, creating operational bottlenecks. (42:15)
Notable Quotes:
"I didn't do the due diligence I should have, and that was a colossal misstep." — Adam Goldberg (31:59)
"I let everybody go and ran a really tight ship. It was time to take responsibility and listen to my team." — Adam Goldberg (44:24)
Turning the Tide: Strategic Pivot and Business Stabilization
Realizing the initial approach was flawed, Adam implemented significant changes to steer the business towards stability and growth.
Key Points:
- Streamlining Operations: Adam reduced overhead by letting go of the VP, product developer, and other non-essential staff, focusing on core team members essential to the business's operation. (44:32)
- New Partnership: He brought in a new partner with extensive experience in the Quebec retail market, providing strategic direction and additional resources. (45:34)
- Brand Reinvention: Adam and his partner focused on leveraging an iconic, universal image associated with maple syrup to rebrand their candles, creating a unique selling proposition. (58:04)
- Product Diversification: They expanded the product line beyond candles to include general merchandise like mugs, scarves, and hats featuring the licensed artwork, enhancing brand visibility and appeal. (62:05)
Notable Quotes:
"I realized that to turn this business around, I had to fundamentally change how we approached branding and product development." — Adam Goldberg (43:40)
"We doubled down on our unique maple syrup candle, which became the cornerstone of our new brand identity." — Adam Goldberg (59:56)
Lessons Learned and Key Insights
Adam's experience underscores several critical lessons for acquisition entrepreneurs.
Key Points:
- Importance of Due Diligence: Thoroughly understanding existing client relationships, inventory value, and operational processes is crucial before acquisition. (32:45)
- Adaptability and Flexibility: Being willing to pivot strategy based on initial feedback and market conditions can save a struggling business. (58:18)
- Effective Leadership: Transparent communication with remaining employees, taking accountability for mistakes, and fostering a sense of ownership among staff are vital for morale and productivity. (45:33)
- Strategic Branding: Leveraging unique, culturally significant symbols can differentiate a product in a saturated market. (62:05)
Notable Quotes:
"Sales never come easily unless you have a compelling story and a unique product that resonates with customers." — Adam Goldberg (47:37)
"In small businesses, you can't afford to be detached. Every decision impacts real people and their lives." — Adam Goldberg (56:50)
Current Status and Future Directions
Adam has successfully stabilized Sarakon, achieving positive cash flow and beginning to see growth through strategic pivots.
Key Points:
- Financial Health: The business is now cash flow positive, allowing Adam to invest further without the pressure of covering losses. (37:40)
- Product Success: The maple syrup scented candles have gained significant traction, contributing to repeat revenue and stabilizing sales. (80:09)
- Expansion Plans: Adam aims to double the business in the coming year by continuing to innovate and expand the product line, relying on both candle sales and new merchandise. (83:55)
Notable Quotes:
"I'm confident that by focusing on what works and continuing to innovate, we can grow our revenue significantly in the next year." — Adam Goldberg (82:12)
"Seeing the smiles of our loyal employees and knowing we're making a difference keeps me motivated every day." — Adam Goldberg (54:10)
Conclusion
Adam Goldberg's journey with Sarakon illustrates the complexities and challenges of acquisition entrepreneurship. From initial missteps to strategic pivots, Adam's experience offers valuable insights into the importance of due diligence, effective leadership, and adaptable strategies. His story serves as an inspiring example for entrepreneurs looking to acquire and revitalize existing businesses, emphasizing that with resilience and the right approach, success is attainable even in the face of significant adversity.
Notable Quote:
"Even with decades of experience, buying a small business is a challenge. But with passion and commitment, it's possible to turn things around." — Adam Goldberg (84:37)
Key Takeaways:
- Thorough Due Diligence: Essential for understanding the true state and potential of an acquisition target.
- Adaptive Strategies: Be prepared to pivot and innovate based on market feedback and business performance.
- Leadership and Communication: Transparent and accountable leadership fosters a positive work environment and drives business success.
- Unique Branding: Leveraging culturally significant symbols can create a strong brand identity and differentiate products in a competitive market.
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