HOW NOT TO SELL YOUR BUSINESS
By JIM KENDALL
This material originally appeared as one of Jim’s Daily Herald columns
Charles Evans is selling his printing business – for the second time in two years.
He’s also put the building that houses – or, more correctly, housed – the business on the market. As a practical matter, the two transactions aren’t necessarily linked.
Truth is, Evans (a pseudonym I occasionally use to protect a source’s privacy) doesn’t really have a business to sell any more. The initial buyer pretty much ran Evans’ printing business into the ground in the two years before Evans took things back. What’s left is a basically empty building, some equipment, the company truck and some software.
Gone are reputation and customers, the key elements of any business.
What went wrong with the initial sale isn’t that unusual: Dazzled by a $100,000 cash down payment, Evans did virtually no background check on his buyer. After all, Evans says today, the buyer had previous industry experience; had been out of the industry for less than a year, and “I could help a guy buy a job.”
Besides, Evans says, “He kept waving that money in front of my face.”
Evans should have checked.
“(The perfect guy) could have run with the business,” Evans says. “But he didn’t.”
As part of the deal, Evans stayed on for a month, at no salary, to help the new owner get adjusted. He was willing after that to come in on a per diem basis when help was needed.
Help was needed.
The new owner “wasn’t getting projects done on time. He wasn’t a good problem solver. He didn’t want to go to Chamber meetings, which had been a good source of business for me.” Eventually, Evans says, “I started going in for free” in an attempt to right the business.
“I drove past one day on my way to lunch, thought I’d drop in – and the door was locked,” Evans says. “From what I could see, the place had gotten pretty dirty.”
Rent payments – a five-year lease was included in the transaction – started coming late. Customers began calling Evans at his northwest suburban home, asking for help with their projects. “After two years, I repossessed the equipment and the truck,” Evans says.
There is some good news, a heads-up especially for younger professionals: Unlike many older business owners, Evans’ retirement finances don’t depend on the sale of his business. The reason has little to do with the printing business and a lot to do with planning.
As a beginning commission-only salesman who learned early to live on last year’s income, and encouraged by his then employer, Evans started buying savings bonds. Then came a 401(k) retirement program which, Evans says today, “had a big match.
“I knew I would get old and I would need to have something going.” The 401(k) was the something. As a result, “I sleep pretty well,” Evans says.
He still has printing equipment and a building to sell, however. Then he’ll sleep better.
© 2017 Kendall Communications Inc. Follow Jim Kendall on LinkedIn and Twitter. Write him at Jim@kendallcom.com. Listen to Jim’s Business Owners’ Pod Talk at www.kendallcom.com/podcast.