After 45 years in the bus business, second-generation co-owner, Butch Klug, was ready to retire. He sighs a long sigh, “I just didn’t have it anymore. I had lost the drive.” Butch was due for a break. He’d been a big part of the family business since he graduated from Xavier University in 1972. That’s after years of working part time in high school. “Now that’s paying your dues,” he laughs. And indeed, he did.
After he and his sister, Mary Jo, bought the company from his parents in the early eighties, they worked hard with their complementary skill sets to build up the Western Hills business. Eventually, it’d run 35 school buses, 17 motor coaches and three mini buses.
And while the company had come so far, Butch and Mary Jo began to run low on gas. “Things had changed. The rules and regulations. The environment. It started to feel like I was in the way of progress,” says Butch, “the business eventually became 24-7 and I think that’s what eventually just beat us up.”
The thing was, in 2014, when Butch began looking into retirement, he wasn’t sure how to go about it. He knew how to run a bus company, but wasn’t quite sure what it was worth, or how to sell it. And since it wasn’t going to be passed on to another generation, he wanted to make sure that Klug Buses would land in the right set of hands.
Researching Right
When Butch and Mary Jo mentioned retirement to their UBS financial advisor, he told them he had the name of a guy they should contact. Butch didn’t give it much thought and soon after, lost the number. But retirement kept calling and a few months later, he got more serious about his research.
Butch connected with a few resources who assigned a rough value to his business. He considered business brokers. But how did he know if they were trustworthy? How did he know they understood enough about his business? Would they sell it for what it’s really worth? Would they have the Klugs’ best interest in mind?
Finally, Butch remembered that his financial advisor had recommended another option. He recalls following up with his advisor again, asking again for the name, “Well, that guy ended up to be Dino.”
Working with Dino
Dino Lucarelli is not a business broker, but rather a consultant who partners with companies on financial and organizational matters in a variety of roles, including valuations and divestitures.
Butch respected Dino’s expertise, “He had a background as a CPA. Unlike a business broker – you don’t know how much background they have. He is more than a salesman. He puts the numbers together.”
Dino is definitely more than a salesman. He has expansive financial knowledge, including decades of experience as a CPA, serving as a CFO for multiple organizations and teaches as an adjunct professor in Xavier University’s MBA program courses like “Private Company Sale and Valuation.”
When Butch and his sister first met with Dino, they liked his approach, “Mary Jo is a good judge of character and she felt comfortable with Dino. He did some projections and left us thinking, really? We didn’t think it was worth that much.”
Finding the Right Fit
Once a business has been valued, it needs a buyer. Aside from Dino’s finance knowledge, he also has connections with clients who are looking to buy businesses. In this case, it was Aaron Haid who made a match.
Butch agreed on the fit. He recalls his first impression of the future buyer, “Dino put us together. He knew Aaron was looking for a business. He’s young, he’s got that entrepreneurial spirit. He’s worked for fortune 500 companies. That’s what you need in today’s world.
The Deal
Once both parties agreed to move forward, Dino got to work on all the details of the agreement. In the end, the Klugs got more than twice what others had estimated they’d receive in the sale, thanks to Dino’s valuation and strategies for negotiating. They also got the peace of mind that their buyer was the right one.
“We got to know Aaron. He came to work for us. He had a good business head on his shoulders, and so even though he didn’t know about transportation, we could teach him – and that’s what we did. He worked with us for several months and got to know our people. That way, when we made the announcement, it wasn’t a bomb dropping on everybody. They knew him.”
Even when things go smoothly, selling a business the right way just takes a while. Regardless, Butch was happy with the process, “From the time we decided until the time we closed the deal, it took a little over a year. When we signed those papers, and Dino was so instrumental in that, it was like this great weight was taken off my shoulders. It was wonderful. Wonderful.”
The Bus Business Today
Aaron Haid has his own chapter in this success story. He has more than doubled sales since he took over the business less than three years ago. He has merged the company’s Klug Bus Service and Charter Bus Service units into one single transportation company, Queen City Transportation. “He has done the things that my sister and I needed to do to grow the business but we just didn’t have it anymore,” says Butch of his successor.
Butch Klug Today
A few years into retirement, Butch is having a great time, “I think this is what it’s all about. ‘Life after.’ That’s the most wonderful thing, is on Sunday night when you realize – oh yeah, I get to do coffee and the paper tomorrow. I don’t have to go to work.”
Instead, he spends time with his daughters and grandkids, goes to lunch weekly with his fellow retired XU grads and reconditions classic cars. Motioning at his ’81 corvette he says, “This is like my golf.”
His first project? A ‘57 Chevy he acquired about 30 years ago. He also picked up where his late father left off on a ‘37 Packard. His work in process is a dreamy red, yesteryear Mercury. And his latest addition to the collection is a beautiful, 2017 Corvette.
It’s been a long road since Butch’s father bought the family’s first bus in 1958. He’s certainly thankful for the way the business provided, “Those buses put food on the table for a long time.” But Butch Klug looks forward to life after Klug Buses, “This is what its all about, right? I worked all this time to have the resources to do this.” Butch did more than that. He worked hard, he saved smart, and he sold right. He’s set to cruise – now all he has to do is relax and enjoy the ride.