magine taking the reins of your family’s century-old business, only to realize that it's in decline.

How do you right the ship?

Ben Grossman and brother & co-president David found themselves in just such a position in the mid-2000’s.

Grossman Marketing Group of Somerville, Massachusetts, was founded in 1910 by their great-grandfather as an envelope printing company.

Grossman work from an earlier era

Nearly 100 years later, printing was still the company’s primary business.

The pivotal moment arrived when Ben’s father, who was running the firm, ran for public office as state treasurer of Massachusetts.

When it looked like he would win, he handed the reins of Grossman Marketing to his sons.

The brothers knew that printing wasn’t going to carry the business for another generation.

Ben, leaning on his MBA from Columbia, saw the situation as a classic business school case study.

“You use your cash cow business, your mature business, that has either plateaued or is potentially declining, and reinvest proceeds from that into areas of the business that can see growth.”

The strategy of acquisition emerged as an effective way to use those proceeds.

“We decided that we wanted to grow through acquisition and start with tuck-in, bolt-on deals where we could leverage our existing infrastructure.”

Flash forward to 2021, and by all accounts that strategy has worked.

Thanks to 7 acquisitions since 2013, Grossman Marketing diversified away from printing and into promotional products (aka swag).

Promotional products by Grossman Marketing

They also offer e-commerce services & fulfillment, creative services, and still some printing, but the revenue distribution has flipped.

“We were already in the branded merchandise space, but it was a small piece of our business at the time. It was probably 10-15% of our sales,” recounts Ben.

“Now it’s the overwhelming majority of our sales.”

There’s a lot to learn from the Grossman acquisition strategy.

Following are 3 takeaways from our conversation with Ben Grossman.

Picking is one of the e-commerce services now offered by Grossman Marketing

How to Treat Sellers Right

Something Ben learned from their very first deal back in 2013 has stayed with him until today:

Empathy for the seller of the business they’re looking to acquire.

“What we learned from that deal is the importance of looking the seller in the eye, and trying to understand what is driving them,” recounts Ben. “And trying to figure out a way to structure a deal that addresses their concerns and their priorities, while also making financial sense to us and our organization.”

Treating sellers well isn’t just the right thing to do, it also helps future deals come to fruition.

When negotiating with prospective sellers now, Ben has a long list of references of happy past sellers he can point to.

“What I’m most proud of in all of the deals that we’ve done, is that whenever I talk to a new prospective seller, and they’re gauging us and trying to size us up, I say to them, ‘Hey, I’m happy to give you a list of every deal that we’ve ever done and any owner that you want to speak with from any deal that you choose.’”

“I’m very confident that those conversations will be positive ones,” he says.

Grossman Marketing team at work

Treating sellers right extends beyond making the deal.

Grossman structures deals often with only a portion of the deal value up front.

Ben cited an example where his firm paid one-third of the purchase price at closing.

That means that fully 2/3 of the deal value is paid as a 3-year earn-out based on retained gross profit.

Such terms require a lot of trust.

The seller needs to believe that Grossman will be honest about the revenues and expenses of their sold company for 3 years — a long time.

Ben uses radical transparency to address this concern.

“With the owners that we transact with, they get the same data that I get. They get the raw data output from our ERP,” explains Ben.

“So they see every order that we do, they see the cost, the sell, the gross profit, any ancillary costs or fees or sources of income that could benefit them or that would take away from that earn-out.”

Suppliers as a Source of Deals

Sourcing companies to buy is always a challenge.

In addition to automated outreach and working with brokers (more on that below), Ben leans on suppliers for help here.

“Suppliers are actually a great source of business intelligence because they have very transparent conversations with business owners, the folks who are buying from these suppliers,” he explains.

“Whenever I have the opportunity to talk to a supplier-partner of ours, I don’t let those conversations go without asking, ‘Hey, have you heard of anyone that might be interested in either exiting their business, retiring, bringing on a partner?’”

“Those conversations are very fruitful.”

As with sellers, treating suppliers well is paramount.

“We try to treat our suppliers like gold,” says Ben.

“We pay them quickly. We try to treat them with respect. We don’t fire-drill them unless it actually is a fire. So these suppliers like to do business with us.”

With treatment like that, Ben’s suppliers are comfortable making introductions to their own customers who might be interested in selling to Ben.

“Although it’s a great thing for them to make introductions, they’re not going too far out on a limb because they know we’re never going to make them look bad.”

Ben and David Grossman of Grossman Marketing Group

How to Use Business Brokers Effectively

Business brokers get a bad rap — often deserved.

“Some of them are more fantastic than others,” jokes Ben.

But the best business brokers are worth their fees and then some.

Ben offers three recommendations to effectively work with brokers:

  1. Define very clearly the types of opportunities you’re interested in.

    You don’t want to be sent a bunch of deals that you’d never consider doing. That wastes your time and the broker’s.

    “When we clearly articulate to them what our industry focus is, they then will follow up with opportunities,” he says.

    “In fact, one of the two most recent deals we did, came from a broker that we have a relationship with.”
  2. Position yourself as a viable and capable buyer.

    “We have credibility with them,” Ben says about the brokers that Grossman Marketing works with.

    “When we indicate interest in a potential opportunity that they have, they know that we’re a real buyer. That we have the ability to close. That we have the capital behind us to make a reasonable and fair offer, and that there’s no kind of risk of not being able to close on that transaction.”
  3. Work with brokers who specialize in your target industry and price range.

    “There are industry-specific niche business brokers, and they’re very helpful. They know a lot of the players. They’re in touch with the sellers, they’re in touch with buyers over a course of many years.”

    Deal size specialization matters just as much.

    “You want to make sure that they focus on businesses the kind of size that you’re looking to transact around.”

    Some brokers focus on smaller Main Street-sized businesses.

    Others focus on much larger deals, above $100m.

    Ben works with brokers who play more in the middle. “For us, our sweet spot of business size is between $1.5m and $5m in revenue.”

    So make sure you identify brokers whose sweet spot is the same as your own.

How to Reach Ben

Follow Ben on Twitter at @bigrossman.

He also maintains a personal website that lists all of Grossman Marketing Group's acquisitions at bengrossman.info.

Lastly, check out Grossman Marketing Group and SwagCycle, a sustainability venture Ben started to recycle swag for companies that rebrand or are acquired.