By Tom Ballard, Director of Innovation and Entrepreneurial Initiatives, Pershing Yoakley & Associates, P.C.
In the space of five years starting in 2000, Ed MacFawn was hired to help three companies raise capital and grow. In the end, he helped sell the enterprises, a process that honed his business skills but left him questioning if this was the right long-term career path.
After all, every exit meant he was once again unemployed. “Doing my job is losing my job,” MacFawn says.
He also saw a lifestyle that was not the right fit.
“I saw VCs swing for the fences,” MacFawn said of the experience. “I wanted something that was not all or nothing.”
He and his wife also wanted to move back east to a lifestyle they knew from their earlier years. MacFawn grew-up in Northern Virginia, while she was raised in Memphis.
As he searched for the right opportunity, he found a small company in Knoxville and the family got excited about relocating to East Tennessee. Over the course of his due diligence, MacFawn decided against that acquisition, but the family proceeded with the move to Knoxville anyway. Soon after, he discovered an opportunity in a small company in SW Virginia named BiT Marine Software.
“It was a small business run by a programmer who had passed away a few months earlier,” MacFawn recalls.
He acquired the software business that had no employees and relied on independent sales representatives.
“Our customers knew far more about the software than any of us,” MacFawn readily admits. That reality changed as he used his previous experience as a business executive to understand the software and the sector it served.
“Things were really picking-up in 2007 and 2008,” MacFawn says. He was traveling continuously, selling and installing the software. All of that momentum changed when the boating business tanked in 2009.
“We did not lose a lot of existing customers, but new ones coming in the door dropped significantly,” he says.
Out of adversity also comes opportunity. In the case of BiT, the anemic new sales numbers allowed MacFawn to focus a portion of the time of his one technical support staffer to converting the initial software to a browser-based application.
It was a wise decision. Now, the company not only focuses on the original marine sector, but has moved into power sports – motorcycles, ATVs, PWCs, and golf carts. The software includes inventory/point of sale, service work orders, unit sales, slips/storage/rental management, and accounting modules.
“We are incredibly busy with businesses that want to use our software,” MacFawn says. From a company with no employees in 2005, BiT Dealership Software, Inc. has four employees and is looking for a fifth.
The revenue model has also changed from a straight software purchase to a subscription approach, commonly referred to as Software as a Service (SaaS).
For MacFawn, the resurgence of the marine sector and the expansion into power sports have allowed him to exit a mergers and acquisition (M&A) practice that he and a former colleague launched in San Diego in 2012.
“I wanted to get more involved in the Knoxville scene,” he says of the decision he made about a year ago.
With his experience selling businesses, advising on M&A transactions, and restarting a local company, MacFawn can clearly offer useful advice to the region’s entrepreneurs.