Ep. 133 — Troy Berg: 3X in Three Years Through Sales Discipline and Eight Acquisitions

6 min read

Subscribe: Apple Podcasts · Spotify · YouTube · Amazon Music · iHeartRadio · Pandora · RSS

Episode Summary

You’re sitting on a revenue plateau and you can feel both growth levers staring back at you. Hire better sellers and stop bleeding the deals you already have. Or buy a company and bolt on someone else’s revenue. Most owners pick one, do it badly, and end up with neither. Troy Berg ran the table on both. He took Dane Manufacturing from $10M to $32M in three years through a mix of organic sales growth and acquisitions (eight deals total over his career), and he’s not shy about what he learned the hard way. We got into the math behind sales hiring (the 4% of sellers who move 92% of revenue, the OMG test that filters them, and the comp plan that keeps them honest on margin). We got into the M&A reality nobody at the country club tells you: 80% of deals die from ego, capital is everywhere if you know how to ask, and the seller’s CFO can kill the transaction in the last week. Real numbers, real war stories, and the 3X plan he and his president built on a Thursday-morning offsite cadence to actually pull it off.

Watch on YouTube

## Top 10 Takeaways
  1. Four percent of salespeople move 92% of revenue. Hiring a warm body costs you a full year.
  2. To land an A-player, recruit them out of a job they’re already winning at.
  3. Never cap commission. If a top seller makes twice your salary, the business is printing money.
  4. Pay your sellers on Milestone 16 — Target Gross Margins only, and only after the customer actually pays.
  5. Five weaknesses kill sellers: rejection tolerance, money tolerance, need for approval, margin discipline, and self-talk.
  6. Eighty percent of deals die because both sides bring ego to the room instead of listening.
  7. Capital follows belief, not credentials. Shop banks outside your state if yours keeps saying no.
  8. SBA fees feel expensive until you compare them to a 30% return on the business you just bought.
  9. Every seller has hidden influencers in the room. Map the CFO, the banker, and the country club whisperer first.
  10. Three million boomer businesses must transfer in the next eight to ten years. Most won’t unless buyers learn the mechanics.

Sound Bites

“4% of the salespeople in America sell 92% of all goods and services. So according to the IRS, there’s about 25 million people that identify themselves in sales. Of the 25 million salespeople, 24 million confuse the market, and 1 million actually move the needle.” (@TBD) — Troy Berg

“Saying yes is easy. Saying no is hard. Sometimes knowing what not to do is the hardest thing. So you gotta be careful with your yeses.” (@TBD) — Troy Berg

“80% of businesses never sell and 80% of deals just never close because big egos are sitting in the room. Your job is to check your ego at the damn door.” (@TBD) — Troy Berg

“I never had the money for any of my eight transactions. Never had the money when I started to buy the company. I had faith in myself, belief in myself, and belief that I could convince somebody to give me the money. Capital will always find a good home.” (@TBD) — Troy Berg

“Get black or you’re going back. That meant you better get your little startup company profitable or you’re going back to work for the man.” (@TBD) — Troy Berg

About This Episode

Troy Berg is the owner of Dane Manufacturing in Madison, Wisconsin. He bought Dane in 2001 for $1.2M as his first acquisition (his mom funded the down payment) and grew it through eight acquisitions and aggressive organic sales to over $32M in revenue. His most recent deal at the time of recording was Dantherm Cooling in Spartanburg, South Carolina, which closed in June 2018 and took the company from roughly $19M to $32M overnight. Troy is a Vistage member, a longtime student of Darren Hardy’s work, and brings a peer-to-peer perspective on the realities of buying companies, hiring real salespeople, and financing deals when you don’t have the money.

Resources Mentioned

  • Dane Manufacturing — Troy’s company in Madison, WI.
  • Axial.net — Online deal marketplace for buyers and sellers of companies. Where Ryan first read Troy’s three-part article on the 3X growth strategy.
  • Objective Management Group (OMG) — The sales assessment Troy uses to screen candidates. Founded by ex-IBM sales leaders.
  • Vistage — CEO peer group Troy belongs to.
  • The Compound Effect by Darren Hardy — Troy’s CEO coach and author.
  • The Entrepreneur Roller Coaster by Darren Hardy — Troy’s recommended read for owners.
  • The Happiness Advantage by Shawn Achor — Referenced for the 25/75 split between intelligence and belief in success.
  • Harvey Mackay — Sales speaker who shaped Ryan’s early career.
  • SBA (Small Business Administration) — Stands in the risk gap between buyer and bank. Troy has used SBA financing on three of his eight deals.

Connections

Phase + Module:

Milestones:

Concepts referenced:

Graph View