Quote:
Originally Posted by dnc19694339
Im looking for opinions on the sale of part of my business. Here it is-
I currently own a Landscaping business / Garden Center.
I operated for about 8 years as a landscaping business providing lawn maintenance, landscaping and brick paver installations. I worked out of a couple locations during this time. I have now been in business 13 years.
5 years ago i purchased a house on 3 acres on a highly traveled road in my area and opened up a Garden Center selling mulch, stone, topsoil, and nursery stock. Business has been OK with the Garden Center doing $220K to $280k each year since opening not counting my landscaping work.
The problem is, I do not want the retail Garden Center anymore. I have realized the retail part of the business is not for me.
I would like to sell the garden center and just go back to the landscaping only. I have another property I can run that out of. Selling it as a stand alone business i think would be the most profitable for me but I am having trouble because i can not let them continue to use my Company name and phone number.
Any ideas of how to do this? Is it possible or am I stuck just selling the Real estate and get nothing for the business I have built up?
I thought about putting out a new sign with new name and phone number for the rest of this season and selling it like that? Not sure if that would work, might be confusing to people?
Let me know what you think?
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This would be incredibly unwise. The value of your business isn't in the real estate, the structure, and the inventory. The value is in the brand, the goodwill and reputation you've accrued. Changing the name is essentially erasing all that value in a single stroke. Instead, you're far better off changing the name of your landscaping business, chiefly because you are dealing with a much smaller universe of potential customers, so it's easier to make the transition.
You'll hear a dozen different theories on how to do this.
Here's my ideal scenario: If you have a really reliable employee who is financially stable, sell the business to him or her -- or them. They'll know the business already, the customer will have continuity, and you'll be able to put it into the hands of someone you trust.
The second scenario means selling it to someone. If that's the case, I'd plan on a six-month transition while they learn everything and get to know customers. And, after that, be available to answer their questions, whether on a paid basis or not.
The third and most dangerous scenario is selling to your competition. Just make sure you're covered with a sheaf of non-disclosure agreements before you begin dickering.
Whichever option you choose, I would recommend that you get all your money at the time of the transaction, NOT some scheme where you're essentially acting as their bank. That may prove unrealistic, but it should be the ideal. I've known way too many people who sold their business for a nominal sum in the expectation of future revenue, only to watch helplessly as the new owners drove the business into the ground. They never saw another dime.
If you do have to have a scheme where some of your payment is deferred, then I would insist on absolute transparency in EVERYTHING they do with the money. You will want to know what they're paying themselves. You will want to know their margins, and everything else. And I would make your feelings known if they start doing dicey things.
Further, do not even begin to put your company up on the block without a clear valuation in mind, a price developed with the help of a good CPA who understands business sales. Then have a really good attorney draft the paperwork, eliminating every possible chance to get screwed.
I sold my biz to a core group of employees and it went pretty smoothly. First, I hired good people to begin with. Second, I had given them decision-making power years before I was ready to sell. Third, I was transparent with them at all times, so that company leadership wasn't some kind of arcane mystery. Fourth, I developed a plan for selling, complete with valuation. So they hired their attorney and CPA, we dickered back and forth for a couple of months, and came to an agreement. I also agreed to stay on for a year part-time on salary as part of the arrangement in order to make the transition easy. The last six months of that engagement, I felt I was practically taking their money because they were doing such a good job.
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