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
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 email@example.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
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
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.