Several years ago, one of my colleagues listed a very successful retail business in Sedona. As soon as I saw it, I knew I had the perfect buyer. I had sold a business to this couple several years prior and they contacted me to let me know they were ready to expand. The business that was for sale was a perfect complement to the business they already owned and gave them the diversification they needed to even out the seasonality of their existing business. The buyer and seller hit it off immediately. They agreed upon the terms of the sale and with my help, obtained the financing they needed to make the purchase, negotiated a lease extension for the business premises with terms that allowed the business to thrive and tied up the rest of the details for a successful closing and transaction for all concerned.
Dominic Femia is an independent agent with WCI Brokers. He can be reached at 928-300-6075 or Dominic@wcibusinessbrokers.com
Building Supply Business with Real Estate
By Jerry Crandall
A seller of a profitable building supply business wanted to sell his business and real property to invest in a real estate project using a Section 1031 exchange. My initial financial, operational and tax analyses revealed the facts to the seller. The seller’s earnings of $170,000 a year were simply not enough to justify his asking price of $750,000 for the business, let alone the real property at another large sum. Unfortunately, the gap between the seller’s perception of value and how much a buyer would pay was far too large. Through coaching, recommendations and periodic business reviews over two years, I helped the seller prepare the business for sale while he focused on increasing revenues and profitability. We then sold the business and real property together for more than the seller’s target price of $1,350,000. We worked with the bank to get the Buyer an SBA loan, and the seller was able to make the Section 1031 tax-advantaged exchange he hoped.
Jerry Crandall is an independent agent with WCI Brokers. He can be reached at 928-301-3730 or Jerry@wcibusinessbrokers.com
Start Your Engines
By Peggy Marsh
The sellers of an auto repair facility, like many success stories, started out working together and decided they could open their own shop. In eight years, their sales grew to $1.5 million but the partnership was not working for either of them. The company was well run and the financials were good. After analyzing the seller’s numbers, I knew the business would qualify for an SBA loan. The buyer had 12 years of experience as a manager at a franchise auto repair facility. I helped him secure an SBA 7(a) loan with 10-year terms to buy the business. He sold his home to generate the 10 percent down payment the lender required. The lender also provided the buyer with the operating capital he would need. The SBA loan made it possible for this buyer to pay his monthly debt service, support his family and be his own boss.
Peggy Marsh is an independent agent with WCI Brokers. She can be reached at 928-699-1350 or Peggy@wcibusinessbrokers.com
Firearm Accessory Company
By Steve Berry
I recently closed the sale of a firearm accessory manufacturing company in Northern Arizona with somewhat unusual circumstances. The owner was manufacturing several different product lines; however, he only wanted to sell one of the product lines. To achieve his goal, I had to break out the single product line’s income and expenses from the gross revenues, expenses and net profit of the entire company. This was not a simple task, but ultimately, by working closely with the seller, I was able to justify an asking price that was supported by the business and attractive to the seller. Utilizing an extensive marketing program, I was able to attract multiple potential buyers. While working with the prospective buyers to help them understand the manufacturing processes and financials, one stood out as the perfect buyer. He purchased the business and relocated it out of state where he and his family reside.
Steve Berry is an independent agent with WCI Brokers. He can be reached at 928-814-8135 or Steve@wcibusinessbrokers.com
Working Through Tough Issues
By Matt Uhler
One of my colleagues and I were contacted to work with a recently divorced couple that owned a large service business. The relationship was cordial, but they wanted to go their separate ways, so we started marketing the business for sale. We attracted several qualified buyers but none of them were quite right. We discovered that one of the partners still loved the business and didn’t really want to sell. I suggested that we help him buy out his partner but, for various reasons, he didn’t think he would qualify for a loan. We knew there were several issues that would make financing very tough, and then we found out about some other serious issues that made it even tougher. After nearly 16 months, we were able to arrange the financing and close the deal.
Matt Uhler is the principal of WCI Brokers. He can be reached at 928-301-1505 or Matt@wcibusinessbrokers.com. QCBN
As a business intermediary, WCI Brokers has facilitated more than 500 business acquisitions in Northern Arizona in the past 15 years. The following short case studies are examples of some of the transactions.
WCI Brokers is the largest full service business brokerage firm in Northern Arizona. For more information and a complimentary, confidential interview call WCI Brokers at 928-445-1144. Learn more on their website at www.wcibusinessbrokers.com.