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Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
44,576 posts, read 81,167,557 times
Reputation: 57808
I didn't sell, it was too late. More than 95% of my business was with other businesses, mostly commercial real estate, parking management companies, and home builders. i could have gotten a good price for it in 2005-6, but by mid 2007 many of my customers had gone out of business, and the others just stopped spending money. I have a real job now with great pay and benefits but I still operate out of my home for a half-dozen or so good customers that managed to make it through, good for maybe $20k/year vacation money. I was lucky that my 5 year lease ended in early 2007 and I saw enough of the handwriting on the wall to not renew, and moved it to my home.
Had a retail business, sold it after seven years. Just not enough income for the time/effort we were expending. We had figured on launching 2-3 satellite locations within first five years, but we hurt ourselves by overspending the first three years, then bumped into the recession. We were lucky to sell at all. Made 3x earnings due to our brand recognition while every other competitor was picked apart for pennies on the dollar for their equipment.
Thankfully back to work after two years of looking.
I didn't sell, it was too late. More than 95% of my business was with other businesses, mostly commercial real estate, parking management companies, and home builders. i could have gotten a good price for it in 2005-6, but by mid 2007 many of my customers had gone out of business, and the others just stopped spending money. I have a real job now with great pay and benefits but I still operate out of my home for a half-dozen or so good customers that managed to make it through, good for maybe $20k/year vacation money. I was lucky that my 5 year lease ended in early 2007 and I saw enough of the handwriting on the wall to not renew, and moved it to my home.
Thanks for sharing.
Sounds like you're in a good place now. Good job and extra cashflow.
Rocco,
I was in business for 13 years. Retail food take out business.
We had bought the building the business operated out of, which ended
up being the absolute right thing to do.
When you won a business, you really do keep track of the economy.
Directly or indirectly, you know how the economy is doing.
I think it was the beginning of 2006, we noticed a sharp down turn in
sales. That is when our antenna went up, and we followed the economy
for the remaining of the year.
In 2007, we listed the business and building, had a horrible realtor, didn't
sell it.
In 2008, we sold the business and the building, very cheaply, knowing
all bets were off, something terrible was about to happen.
You see, when your in business that long, and watch the business channels
you can see the writing on the wall. It's pretty plain.
We sold our jobs.
Let me tell you this, I don't care what you hear on TV in regards to the
economy.
This country has never been the same since the crash.
There are alot of people who were forced out of work, lost their homes,
all due to bank fraud, and they never recovered.
You see, the financial rules are all to protect the banks and fianncial
sector, but nothing to protect the real job creators, the consumer, so
the jobs aren't there.
Shame, really. Times are tougher than ever, and everyone just puts on the
TV and believes what they hear, til it hits them.
The previous poster has it right. You need to follow carefully changes in the marketplace. This is the same advice for Ebay. The whole business can change in a heartbeat. Know your sales, location, listen to customers and be able to unemotionally change your plans.
I'm just starting to consider liquidating because I am just simply tired of it and tired of dealing with the people. New laws keep getting passed that make my business more difficult.
I enjoyed starting something and growing it. What I hated was dealing with all the stuff that comes along when you have the mature business. Like the copier salesmen pestering you. Or a critical employee quitting and moving out of town when she broke up with her boyfriend. Or firing an employee because he lied to me.
Mind you, my business was profitable. But I was finding myself dealing more and more with the operations of things rather than the stuff I enjoyed the most.
So I sold to three key employees and hung around for six months.
I sold my part of our construction company to my partner. We weren't on the same page is terms of work ethic. My partner wanted to go home early everyday. Instead of arguing with him and being angry everyday I asked him to buy me out. It was the best thing to do. I took my proceeds of my part of the business and invested in real estate and stocks.
When you decided to sell your business, was there one nagging issue that caused you to to say: "Okay, that's it, it's time to sell?"
I work with a lot of business owners and I'm curious to see if any of your reasons line up with many of the owners that I've worked with.
In 2000, several things all came together:
I owned a custom golf club shop. Me full time and three part timers. My wife had an upper management job with the state. I was her dependent for health care. A major issue for small businesses.
My wife and I had always said that we wanted retire and move south. We had forecasted doing it in 2004.
The Internet was killing my business as people were fast learning what things cost and how to do things. I had talked to many other shop owners and they were experiencing the same thing. It was not a local trend, but a national trend. I knew I could modify my business plan and hold on for a few years but overall my business model was dying.
Then the icing on the cake came about in 1999. My wife was offered an attractive retirement package from the state government. She was also offered a one year, 3 day a week contract to stay in her job at her then yearly salary. Meaning she collected retirement plus the same yearly salary on a 1099 for the year. That was gravy and gave us time to take action.
I sold cheap as the above all came together. I can critique how the buyer ran the business but the bottom line is it was closed 3 years late more the result of changing times more then them screwing it up.
Selling a business that is and can continue to operate is one issue. There are many formulas and a history. Comparables analysis is comparing the business to other similar businesses that have sold to arrive at a sales price. Adding factors like is the person the real business versus the business, when it is in a dying/changing business, when property is attached, etc. make it all very, very, very tricky.
Easy to say well it should sell for so and so % of its annual sales/income, etc. Anyone that says that off the bat, does not know what they are talking about.
Sorry. No black and white answers.
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