Companies We Don’t Represent

My company, Compass Point Capital, sells businesses, and it is always fascinating to talk to business owners and learn about their businesses.  We don’t always end up representing the business owners who call for various reasons – and this post is about some of those companies.

The impetus for this post was a web inquiry I received the other day from a business owner.  It requested the whitepaper I wrote on the secrets of M&A and business brokerage (just email if you want a copy).  The email address was, uh, interesting, so I Googled it and found the same business owner posted an ad on Craig’s list recently:

"Seeking girls 18 to 23 to perform in adult video. Must be comfortable with posing nude and sexual situations. Comfortable and clean work environment. Earn up to $500 per day. Send photos or video to xxx@xxx.com. Must be at least 18 to apply and send photos/video."

I’m sure that the revenue, earnings and assets of the business could be quite attractive, but I think we’ll pass on this.

Often I feel bad given someone bad news.  I was contacted by a book author who wanted to sell his business.  I could see that if his books were already successful that someone could just manage the continued sales.  But that wasn’t the case and it was perplexing trying to figure out what this guy thought he had that could be sold.  I figure it is best someone hears the truth, but it can be hard delivering it.

Another interesting one was the aviation gift shop owner that had a nifty little jet airplane hanging from the roof.  Unfortunately, the airplane was fairly expensive (even though it obviously was airworthy any longer).  If a buyer bought the shop AND the airplane, the price was too high for the revenue the shop pulled in.  If the airplane was sold off separately, the owner was afraid it would irreparably harm the shop since the entire theme and ambiance of the shop was based around the jet.  I didn’t take the assignment, but I know he tried for quite a while with a business brokerage firm to sell them together, and unfortunately could not.

There have been three or four mortgage brokers that have called in the last year.  Hopefully they made plenty of money during the boom times, because I’m not sure they’ll make much selling their businesses.  All three were showing a steep drop.  We generally take assignments for commission only, so we have to be fairly comfortable that a business is priced properly and will sell.    It was hard to imagine a buyer could get excited about the mortgage business right now so we declined to work with them.

Product manufacturers are popular, and I enjoy working with them, so I was excited to get a lead from far up in northern California near the Oregon border.  The company was run by an older gentlemen who also did all the driving of a delivery truck across the west coast.  He called me up a week later and said he was nearby, so I drove down near Interstate 5 in central California and we met at a truck stop.  Why, I asked, did he do all the driving?  It turns out he loves to play poker, and he has a route of poker joints around the west coast.  It also turns out he likes to drink.  On top of all that, he said his “books” are hand-written notebooks which he could let me look at, but couldn’t let me have.  I don’t think I should mention the tax situation.  I knew someone could probably take that company and really do something with it, but I just couldn’t figure out how I could make that work, so I let it go.