By: Carl Grimes CBI Founder/Chairman
When Kendrick Steele and I walked into the building, it was obvious it was not well kept up. We were greeted by the office manager, who made us wait for the owner to come from the back. She was friendly but a bit suspicious, as is usually the case when two strangers show up and ask to speak to the owner.
When the owner came from the back, he moved slowly, carrying a portable oxygen tank with a tube from it to his nose. He obviously wasn’t a well man.
Kendrick, having set up the meeting, greeted him and introduced me. The business owner told us that he had recently blacked out, awakened in the hospital and been told he has COPD and must be on oxygen constantly. He is 84 years old. He was concerned that day because a winter storm was moving into the area and he needed to be assured his oxygen wouldn’t be cut off due to a power failure.
We toured the facility, which was over 25,000 square feet under roof, in an industrial section of the city. About eight men were busily working at projects on some of the equipment that was placed strategically around the building. It was obvious they were busy.
Serving the needs of a major industry in the area, the owner told us he has no marketing campaign, never has had one, because the work comes in by word of mouth. With the dynamic growth of the industry his business serves, the business is positioned to continue growing in the foreseeable future.
As the tour concluded, he said he has no exit plan, no family members to whom he could hand off the business. None of his employees has the money or skill set to run the business, which he had acquired over 40 years ago when he was an employee of the former owner.
When asked the FMV (Fair Market Value) of his equipment, he said he had no idea. Kendrick, who has a solid background in selling machine shops, estimated it at over $500,000.
When asked about the amount of inventory on hand, the owner replied, again, that he had no idea. The inventory we could see was scattered over the area with no obvious order to help track it. The product the business uses is increasing in value even more than the high rate of inflation because of scarcity.
We have no idea what the value is of the inventory, something we must know to help prospective buyers analyze the business.
Kendrick gave him the CBI Seller Checklist and went over each item and why it was necessary to have it to prepare the business for sale.
Will the owner be able to gather the information needed? Does he have time and the resources to pull it together so we can help him sell his business, make money and pass along the legacy of a lifetime of hard work?
I don’t know but I do know time is not on his side. He should have begun this process at least two years ago.
How about you, dear business owner? Have you been procrastinating, letting an opportunity devolve into an upcoming disaster?
If you want to sell your business in the next couple of years then the time is NOW to get started.
Take the assessment here and see where your business is being prepared to sell.
Don’t hesitate and wait and lose.