Keith Knohl always dreamed of owning a business. He tried to start a few ventures during his long and successful corporate career, but like the vast majority of all startups, he could never quite get it off the ground. He decided that buying an existing business that already had ongoing revenues, profits, clients, trained employees, and a foundation was a much smarter and safer path to business ownership. On today’s show, Keith joins Domenic Rinaldi to share his journey of buying a business, which included retaining a buy-side broker to help him through all phases of the process. If you’ve never acquired a business before, there are many key takeaways in this episode that can help you plan for and execute your own business ownership process.

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Keith Knohl: The Business Ownership Process

In this episode, you are going to read about Keith Knohl, who always dreamed of owning his own business. He tried to start a few ventures during his long and successful corporate career, but like the vast majority of all startups, he could never quite get it off the ground. Keith decided that buying an existing business that already had ongoing revenues, profits, clients, trained employees and a foundation was a much smarter and safer path to business ownership. Prior to successfully acquiring Technical Doctor, an IT services firm, Keith was a 25-year veteran in the information technology industry. Most notably, he was the Chief Information Officer of a primary care practice with locations in 23 states and he was a VP of IT services for the nation’s largest nonprofit hospice provider. Keith was confident he could transfer his years of IT and management experience to the right business and then take it to the next level.

Keith shares his journey of buying a business, which included retaining a buy-side broker to help him through all phases of the process since he had never acquired a business before. There are many key takeaways in this episode, which can help you plan for and execute your own business ownership process. Before we get into the episode, if you want to avoid common deal pitfalls and the risk of losing substantial dollars, you need to know how ready you are to buy a business. I believe proper preparation is so critical to deal success. We have published several free resources to help you be better prepared. You can access these resources on our website at Being prepared is critical to ensuring that you maximize returns and minimize risks. Thank you for being here and I hope you enjoy this episode.

Keith, welcome to the show. It’s such a pleasure to have you here.

Thank you very much for having me.

I’m excited about this interview because you are like many of our other clients who have long and successful corporate careers, but somewhere along the way, they’re thinking, “Maybe I could do this for myself. Maybe there’s a path to building wealth for myself.” I’m excited to have you share your journey with everybody about how you got here because you closed on your first business not too long ago. We’re going to dive into that, but before we do, if you could give everybody a quick backgrounder on what you’ve done and then we’ll dive into to your path to owning a business.

A quick summary of me. I went to college with a Business Administration degree. I got out of college and I wasn’t sure what I wanted to do. I got into banking and then while in my first job, I found out that I loved technology, computers and software a lot more than operations per se. I quickly got into IT and worked my way through the IT landscape from tech support, network administration, security programming and project management. I did a couple of years in each realm and then decided that I wanted to be a leader in IT. I got a Master’s Degree and then became a leader at some smaller firms. I was a Manager and Director. I worked on a couple of startups. I had an idea that I wanted to own my own business.

I started a couple of startups that went very poorly. It’s hard to get a startup off the ground. The product, the company, the process and the people are unknown. You’re building from scratch a full running organization. After I worked for a couple of startups and tried to start a couple of businesses, I got back into corporate life and eventually was the CIO of a large national primary care practice. I’ve been the HIPAA security officer for a number of healthcare organizations. I decided it was time to get back into looking at running my own business again.

This time, instead of starting it from scratch, I wanted to buy one that was already in place. One that already had healthcare customers, already had employees and processes, already had a known name in the market so that I didn’t have to go through those early growing pains of a startup again. I could go right out of the gate and start working on operational efficiencies, customer service, improving technology for people who need it in the healthcare industry in particular and generally in small to medium-sized businesses.

You don’t know this, but you’re a great straight man because we’re dropping an episode that is solely focused on buy versus start. One of the things that I talk about is that 50% of startups fail inside of three years. The vast majority don’t get to five years and over 95% never turn a profit. When you think about the odds of starting a business and having it be successful, they’re very small compared to you buy an existing business that has all of those elements already in place, revenues, clients, processes and brand. All of those things, if it’s the right business for you, you can easily take it to the next level. Thanks for that episode preamble for us. Maybe talk a little bit about your decision to go after an existing business and how you started that journey.

I decided to go after an existing business because as an IT leader within a medium-sized organization, I ran an organization. I ran a business within a business. I had profit and loss responsibility for the budget that they had given me to run under. I had learned how to reduce costs within that organization, within other organizations that I’ve been with in the past. I viewed it as the other departments were my customers, and this was my business, and my employees were my team members. I took that model and said, “If I can do this and be successful with my department leaders as my customers, my team members as my employees, I should be able to do this the same way with a company that does this for others.”

MAU 75 | Business Ownership Process

Business Ownership Process: There are business websites that post offers from companies that are interested in selling.


What I did is I started looking. I went to a lot of the websites that produce ads or leads like a job board or a dating website necessarily. There are business websites that post offers that other companies are proposing that they are interested to sell. I found a couple but I wasn’t finding an IT organization. I wasn’t finding one that matched my background. I was finding wholesale distributors. I talked to a funeral wholesale distributor, a lot of liquor stores and gas stations. I found a lot of random businesses, but the technology ones that I found were very niche, very specific and not doing what I’ve done for my career, which was managing IT organizations for other departments. At that point, I turned to Sun Acquisitions as a buyer’s broker and asked them to help me find a business that better fit my background and my needs because I didn’t find that in the marketplace.

How long had you been looking before you arrived at the decision to maybe engage a buy-side broker?

I had been looking for about 6 to 8 months. My wife was encouraging me to find something else because I had started down the road on a wholesale distributor and on a food distributor. She said, “You’re not going to be happy there. You’re trying to find something to find something as opposed to trying to find something that’s going to be a good answer in the long run.”

You gave the audience a key nugget here, which is in my experience doing this for decades now, a lot of folks focus on cashflow and geography, and not so much on, is it a good strategic fit for me in the long run? Is this a business I’m going to be excited about running every day? Not only excited about running, but can you take it to the next level? Do you have the skillset to take it forward? In that regard, it’s so important that before you even launch a search, build a strategic plan around what you’re trying to accomplish. What are the types of businesses you’re interested in and all the other things that go into that? Geography, do you want a management team? Do you not want a management team? All the things that make for a good acquisition for yourself. It sounds like your wife is very smart and in tune with you very well.

She knows what’s going to drive me, where I’m going to find value, and where I won’t lose interest in 6 to 9 months.

It sounds like you have a good partner there. That’s very important. You decided, “I’m going to engage a buy-side broker and see if I can go after this another way.” Talk to us about your experience there. What surprised you about that process? Did it go the way you had expected? Talk about the journey overall.

I didn’t know what to expect. I bought some houses in the past, so I knew that there are transactions that are managed by both buyer and seller brokers. I kept coming back to the model of a home transaction, where I have my buyer’s broker and the seller has the seller’s broker, and the brokers help us figure this out. What I found was that the M&A industry focuses on the seller’s broker. Most of the time, there is no buyer’s broker. The seller’s broker is supposed to be the broker for both sides, but they have an interest in closing the deal. They have an interest in selling because that’s where they get their commission. That’s where they produce their value. I was happily surprised that having a buyer’s broker provided more advice, more direction, and more guidance on the project than having a seller’s broker. During the initial process, we searched the zip codes that I knew about that I was interested in for companies that were within the geography and within the types of businesses I was looking for.

What was fascinating is that I ultimately found the posting on a website. I continued to look, even working with the buyer’s broker and I ended up finding the lead on my own. What was fabulous about having the buyer’s broker there is that they walked me through the entire process. They helped me negotiate the price. They helped me find an attorney and an accountant to help. They gave me advice along the way when we came into hiccups on what is an SBA loan and what’s reasonable. They provided an extra point of reference for the seller’s brokers who were out of state and who may not have had as much expertise in a small business transaction as they could have had. It worked out very well for me and for the transaction as a whole.

I want to wind back a little bit here. You referenced first having a buyer’s broker and a seller’s broker. For the audience, just so we can distinguish it, you never want to get into a situation as a buyer where you’re working with a broker where they’re getting paid by both parties. A broker should have a fiduciary to one party or the other. It’s very difficult to straddle that fence when you’re getting paid by both parties. You want to steer clear of any situation like that, but you’re right. Most of the transactions that happen in the lower middle market, there’s a sell-side agent that’s representing the seller and they work with buyers, but they’re trying to get them interested in the deal. They really represent the seller.

In this case, you hired somebody that’s looking after your interests. You’re paying their fee separate from the seller’s agent. You talked about the first step, which was when you engage a buyer’s broker, one of the big values there and you were hinting to it is they developed a list of all of the targets in an industry that you’re interested in. In your case, it was IT and the team put together a list of targets that generally fit your acquisition criteria. There’s a tremendous amount of hidden value in doing a search that way because you’re going after people that are not actively on the market. Maybe they’ve thought about selling, but they’re not actively selling. It gives you as a buyer an opportunity to have a one-on-one conversation. We always tell clients that while we’re off doing that work for them and trying to find owners of businesses that want to sell, you should still be looking because you never know what pops up. In your case, it happened to work out that way. You found the business by continuing the look and it hit all of your criteria.

It's hard to get a startup off the ground. With the product and processes, you're building from scratch a full running organization. Click To Tweet

It was interesting. I was looking in certain geographies for an IT services organization and one popped up. I brought it to the buyer’s broker and we talked about it. He helped me craft a letter of introduction and some of the initial conversations. It turned out that it worked out that way. It could have gone either way. I was glad to walk in through the process of looking at different businesses and it helped me narrow down what my interests were ultimately.

If you wind back to what you said earlier, you were already looking for 6 to 8 months and nothing popped up that hit your criteria. It takes a long time. That’s the other reason you engage a buy-side broker. It condenses that 6 to 8 month period to probably 2 to 3 months looking process. You find the target and now you begin what I call the dance. Now you’re trying to get to know the business, get the owner, understand if this business is right for you. Talk a little bit about that phase. What was that like going through and learning about the business and whether or not it was a good fit?

The process involves a bunch of documentation that the seller’s broker puts together and you get to dig through that in my mind was boring. It’s a lot of background and a lot of numbers but also, it’s important to read through it and understand it because this is the basis of the organization, and this is how they’re selling it. I also looked at their website. I met with the seller. I met with him in person before COVID broke out. We met, we had coffee, we sat down and we talked. We got to know each other a little bit better and understand where we were coming from. I was able to explain my background and what I was looking to do with the organization that I wanted to engage. I wanted to improve their processes. I wanted to maintain all of their employees if possible. We shared our common background since he had come out of IT and was running an IT organization. I came out of IT and wanted to run an IT organization. There was some synergies and some perception that the organization would continue on past his tenure.

It sounds like a bonding. You guys had common ground to talk about.

It was a great opportunity. We kept coming back to that initial meeting several times during the rest of the conversation. It was very helpful to say that during that initial call, we had this relationship and we wanted the employees, the customers, everybody else to continue on and continue to be well-served into the future.

I have to say that initial meeting is so important. People sometimes take too casual of an approach to that first meeting. The reason I say it’s so important is if you build rapport, and it sounds like you did, and you found some way to bond with each other, your IT background and the fact that you wanted to take the business to the next level, it gives you the foundation of rapport because it’s a long process. Things happen and it gets sometimes contentious. If you build that foundation early on in that rapport, it’s much easier to get through those hiccups later on down the road. Whereas if you take a more casual cavalier approach to that first meeting and don’t take the time to build a rapport, if something happens later on down the road, you might not be able to get over the speed bump.

Things do happen down the road. There are bumps, there are hiccups. There are misunderstandings. The purchase or the sale process is not one that’s quick. It’s a lot longer than buying a car, which is slow.

I want you to talk a bit about that. I’m going to make a point, but I want you to talk a bit about that. I’m going to tell you, after decades of doing this, 100% of the time something comes up. It’s so important to have that rapport right upfront because when it does, you have the ability to get past it. Please share if you’ve got 1 or 2 stories or you want to keep it at a high level, but talk about now the process. You met the owner. You decided to make an offer. What happens from there?

The first thing that you do is you provide a letter of intent. It’s not binding, but it’s a letter that signifies or encapsulates what you’re willing to do. It’s essentially your starting offer. I added to the beginning of my letter of intent after talking to my buyer’s broker about strategy and how to position it and where to go with it. At the very beginning, I reiterated the value of the organization, the history of the prior owner, the value of where he was coming from and what he was doing, and some of the decision-making that he had made to continue to sell him on my value.

A lot of companies receive multiple letters of intent. It’s like a resume or a cover letter in the sense that this is your chance to sell and to continue to sell the idea that this is what you want to do. That letter of intent is your start. You then discuss it with the seller. I don’t know something may have happened behind the scenes, but at some point, the seller decides to accept your letter of intent or not. If they accept it, that’s the start of the negotiation where you’re going to start to figure out where he’s going to push, where you’re going to push, and how that dance is going to continue.

MAU 75 | Business Ownership Process

Business Ownership Process: The seller’s broker is supposed to be the broker for both sides, but clearly, they are interested in selling because that’s where they get their commission.


You got to the point where you got an accepted LOI and now you head into diligence. Talk a bit about your experience in due diligence. Were there any hiccups or anything that surprised you?

There’s a lot to dig into and due diligence. We had a document library created where the seller would upload documents and I would read them. It was a lot. There is a lot of information to dig through. You’re always afraid that you’re going to miss something. In many cases, you’re probably going to miss a lot of things because you’re reading hundreds of pages of contracts and financial statements. We engaged an accountant to help me dig through the financial statements. They did an assessment going back twelve months and they also did an assessment for the prior year-end to make sure that that all of the financials lined up and were similar to what the seller had presented. While I don’t think they ever lined up 100%, they were within a margin of error. They were plus or minus 5%, maybe even 6%, 7%. Nothing huge.

My perception was always looking forward. Would any of these things negatively impact me going forward? It turned out that no in that case. I also had engaged an attorney to help me start writing the asset purchase agreement and to review some of the contracts to make sure that the contracts were binding. I had some transition opportunities before customers bailed. My fear was that at the transition, that’s a great opportunity for customers to re-evaluate their relationship with the company. I wanted to make sure that the contracts were enforced so that they didn’t have the ability to wholesale up and leave because to a large extent, that’s what I was buying. It was those customers and their ongoing relationship with the company.

Your advisers were M&A advisers, people who had done transactions. You had a high level of confidence that they knew what they were doing and could provide you good advice.

They were recommended by my broker. They had done several transactions for them in the past. I knew they knew what they were doing. I had to rely on somebody. I had to assume somebody on my team was good and accurate. That was one of the reasons why I chose the broker’s recommendations. They gave me 3 or 4 call. I called 3 or 4 and I picked one. At the end of the day, I need people on my team that knew what they were doing because to a large extent, I didn’t know what I was doing.

This is where it’s so key to make sure that you have advisers who have mergers and acquisitions experience. You don’t want necessarily an estate attorney doing your M&A deal, unless they have a lot of M&A experience, but you need experts here that understand this process.

In some cases, the seller’s brokers didn’t understand the SBA process. My transaction happened to fall under the small business administration, the SBA. I don’t know if it’s a 7(a) loan or something like that. There are some regulations and there are some things that are specific to that transaction. How long can the sellers stay on board after the sale closes? What do you need upfront? What kind of timing is going to be impacted by the bank coming in? The seller’s attorneys or the seller’s brokers didn’t know. They didn’t have a lot of impact or a lot of experience with the SBA. My broker having experience with the SBA helped a lot.

How did you find that process with the SBA going through that loan process? Was it easy? Things that you think the audience would appreciate knowing.

It was easy but long. It’s like a long mortgage application process. They asked for a ton of information. They want to appraise the business. They want to review the financials of the business. They want you to have life insurance to cover the loan if something were to happen to you. It was very structured. That may have something to do with the closer that I was working with and the bank that I was working with. My experience was very structured, but they gave me a checklist upfront and said, “You check all these things off and we close.” My job was to check off every single one of those things and we closed.

Was it about 90 days roughly maybe to go through the loan process?

The sale process is not one that's quick. There are bumps, hiccups, and misunderstandings. Click To Tweet

I think so. From the time my letter of intent was signed to closing, it was 110 days. Part of that was we wanted to get it close at end of the month. Part of it was the life insurance process is long and stressful in some cases because we were running up against a deadline where we needed it assigned a policy number. I don’t know that I got it started soon enough, but ultimately it all came together.

There are lots of parallel processing when you’re in diligence. You’re doing diligence. You’re going in a bank. You’re doing the bank’s checklist. There are lots of parallel processing. If you have a full-time job while you’re doing this, it’s a lot.

You’re doing two different things in due diligence, which I found was fascinating. One is that you’re working through the checklist of the bank, and the other is you’re starting your company from scratch, which I wasn’t necessarily ready for, although I should have been. You got to think about these things. You have to register with the federal government. You have to register with the state government. You’ve got to register with the city. You’ve got to get a bank account. You’ve got to get a credit card. All the things that you need to do in order to have a running business you need to do while you’re in due diligence and before you close. In some cases, these things are happening before I was ready for them to happen. I wasn’t convinced that our deal was going to close at some point. It is a cycle. You go through some questioning and there’s some pushback. When you’re questioning whether or not the deal is going to close, you wonder if your credit card application was timely.

You referenced something about going back to the bank, that the bank is going to do an appraisal. I want to make a note here for everybody that as part of an SBA loan, the bank is required to send the file to a third party to have it independently appraised. Even though the buyer and the seller may have agreed to a price, it still has to pass the sniff test of a third-party that does nothing but value small, privately held companies. That’s a big deal because if it doesn’t pass that, it comes back to the parties to either renegotiate the deal or figure out something else, but it has to pass that step. That step alone takes a couple of weeks.

Thankfully I didn’t have to renegotiate. I don’t know what happens if it doesn’t pass. I draw the parallel to a mortgage. Even after you discuss a price, then a third party comes in and does an appraisal on the house.

It’s not a happy day when it doesn’t come back. That’s a very difficult process. I also want to give you the opportunity to talk about your new company because now you’re offering a service that can help people who are in M&A deals. Before we do that, if you were taking a step up at the 50,000-foot level, anything overall, any advice that you would offer to buyers out there who are going down this path?

I found that the buyer’s broker to be very handy and helpful. It was not cheap. In the grand scheme of things, it was probably minuscule compared to the size of the deal but still, it’s an expense. Between the help with the negotiation, the process, the general advice and the handholding through the process, when you go through an M&A deal, there are a lot of ups and downs. For people like me who don’t do this every day, I’m not a private equity firm, I’m an individual, I don’t buy and sell companies every day. There are a lot of unknowns and hiccups that happen. I found that process to be very helpful.

It’s not like buying a house. The process of buying a business is very complex with lots of nuances, little things that you would never even think of. That’s a point well-taken. Fast forward to now, you closed on your IT business. How are things going? Can you talk a little bit about this new service that you’re offering that can help people who are in mergers and acquisitions look at their IT part of their business?

My company’s name is Technical Doctor. It does IT managed services for small to medium-sized companies. We manage computers, workstations, servers, hosting, do risk assessments, do security assessments, manage people’s security. Anything an IT organization would be doing for you at a company, we will do for smaller entities. The types of services we have are almost anything IT related we can help you with. What you’re referring to is when you’re buying a small company, one of your assets is your IT infrastructure that the prior owner had built and managed over a period of time.

In many cases, that may be old. That may not manage your organization going forward. We’ve put together an offering where we can offer to small business buyers, a service to assess somebody’s IT infrastructure. Do they have old licenses? Are they overpaying? Should they look at the cloud in the future? Are some of the computers obsolete and should be replaced? What kind of software licenses do you have and whether or not they’re relevant to the organization going forward? Are they something that they bought in the past and shouldn’t continue with for whatever reason?

MAU 75 | Business Ownership Process

Business Ownership Process: Once the seller decides to accept your letter of intent, that’s the start of the negotiation.


There are things that people overlook about the post-closing in IT and HR, unfortunately. Those are two of the biggest things people overlook. They don’t plan for it ahead of time. That’s a great service. Speaking about transition, how was the transition into the business? How did your first 30, 60 days go, and any advice there for folks as they take over a new business?

It has been a load of fun. One of the challenges was moving over all of the accounts. Finding all of the passwords and figuring out all of the different places where services were being provided by some third-party, a web version of something and didn’t know what the password was. We had to track it down and figure out who the vendor was. We had to transition the credit card payment from the seller to myself. That took a long time. It took longer than I thought it might. That might have something to do with our industry. We have a lot of third-parties that come together and build our service.

The employees were great. They were looking for a different leadership style, maybe a lot more engaged. I’m a lot more excited about where we are because I made a new business and he was in an old business that he was looking to leave. The employees were good and are moving forward. The customers are fun. Customer service is always a dance. You never do everything 100% right. You’ve got to recover and then figure out a way to not do that again. We’re working through a lot of different things with customers and making sure that they’re happy, and we understand their needs going forward. We’re finding our path forward.

I’m glad to hear you say you’re having so much fun. That’s one of the big things. People are looking for financial and personal freedom, and some self-fulfillment. It’s great when that happens. Keith, I appreciate you taking some time to come and visit with us and share your journey. If folks wanted to reach you in regards to this new service that you’ve got where you can do an IT audit during a merger and acquisition, how could they get in touch with you?

You find us at That’s our website address. You can email me at [email protected]. Our website does need a refresh. That’s on the list. It needs to come up to speed, but at least that’s where you can find us.

Thanks for being here. I appreciate it.

Thank you, Domenic. I appreciate it.

Take care.

I hope you enjoyed this episode. If you enjoy our content, please remember to subscribe and review our podcast. I look forward to seeing you again on the next episode. Until then, please remember that scaling, acquiring or selling a business takes time, preparation and the proper knowledge.

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About Keith Knohl

MAU 75 | Business Ownership ProcessBusiness/Finance/Operations minded with Technology focus/background – driving profit growth by streamlining processes, adding measurable cost controls and improving health outcomes by delivering user-focused, I.T. products / systems applications / processes.

Resourceful and creative with broad technical knowledge and diverse business expertise to design processes and products that capitalize on emerging technologies. Proven success leading and managing cross functional teams including business-development, marketing, sales, operations teams with positive customer relationship management.

Principled work ethic with strong and effective people leadership, communications and interpersonal skills. Applied training, mentoring, and motivational skills – influencing clients, teams & individuals with aggressive and innovative processes, technologies, and plans in cost-sensitive, highly competitive, national/multi-state, health-care landscapes.

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