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This will be an interesting thread moving forward......

crane operator

crane operator

Senior Member
Joined
Mar 27, 2009
Messages
10,224
Location
sw missouri
Welder Dave said:
Did she ever consider selling the business with all the equipment and the customer list? Seems like it might have been a good/better option to get more money and keep the customers happy.
Click to expand...
That always sounds good in theory, but rarely works in the real world.

Any buyer/ business that can afford to buy them out, can just buy more equipment and expand in house. The bigger guys don't want the whole thing.

Anyone small can't afford it, so then it's either all borrowed money, or the previous owner has to carry the debt.

Typically the business can't afford to repay interest and principal on the borrowed money, and also turn a profit ( the old owner typically started small and builds over time).

If the old owner has to carry the debt, why sell? You still have all the risk, but now no control.

So I find that it rarely works to sell as a going business. The buyers that have the money, don't really need the business, and the small guys can't afford to buy it.

So sellers/ people wanting to retire - call the auction house and get it gone.

The scenarios that I'm familiar with a buyout that works, are:

a couple employees familiar with the business buy the owner out,

some large companies become "employee owned" which stock transfers, bankers, and typically a board running the company, often with former owners being on the board. Old owners ease themselves out, and can get their equity out of the business.

the owner takes a partner and sells out to the partner over 5 plus years.
 
Vetech63

Vetech63

Senior Member
Joined
Aug 10, 2016
Messages
7,885
Location
Oklahoma
crane operator said:
That always sounds good in theory, but rarely works in the real world.

Any buyer/ business that can afford to buy them out, can just buy more equipment and expand in house. The bigger guys don't want the whole thing.

Anyone small can't afford it, so then it's either all borrowed money, or the previous owner has to carry the debt.

Typically the business can't afford to repay interest and principal on the borrowed money, and also turn a profit ( the old owner typically started small and builds over time).

If the old owner has to carry the debt, why sell? You still have all the risk, but now no control.

So I find that it rarely works to sell as a going business. The buyers that have the money, don't really need the business, and the small guys can't afford to buy it.

So sellers/ people wanting to retire - call the auction house and get it gone.

The scenarios that I'm familiar with a buyout that works, are:

a couple employees familiar with the business buy the owner out,

some large companies become "employee owned" which stock transfers, bankers, and typically a board running the company, often with former owners being on the board. Old owners ease themselves out, and can get their equity out of the business.

the owner takes a partner and sells out to the partner over 5 plus years.
Click to expand...
This exactly
 
JD955SC

JD955SC

Senior Member
Joined
Mar 13, 2011
Messages
1,535
Location
The South
crane operator said:
That always sounds good in theory, but rarely works in the real world.

Any buyer/ business that can afford to buy them out, can just buy more equipment and expand in house. The bigger guys don't want the whole thing.

Anyone small can't afford it, so then it's either all borrowed money, or the previous owner has to carry the debt.

Typically the business can't afford to repay interest and principal on the borrowed money, and also turn a profit ( the old owner typically started small and builds over time).

If the old owner has to carry the debt, why sell? You still have all the risk, but now no control.

So I find that it rarely works to sell as a going business. The buyers that have the money, don't really need the business, and the small guys can't afford to buy it.

So sellers/ people wanting to retire - call the auction house and get it gone.
Click to expand...
Exactly why my dad’s business just died instead of getting sold when he died unexpectedly,
 
Welder Dave

Welder Dave

Senior Member
Joined
Oct 11, 2014
Messages
18,085
Location
Canada
I think it depends on how fast a person wants out. A niche business with rather exclusive customers can be sold if the seller isn't in a particular hurry. Other times the business owner doesn't want the hassle and just wants to retire or move on. There are companies that specialize in marketing businesses for sale.
 
Vetech63

Vetech63

Senior Member
Joined
Aug 10, 2016
Messages
7,885
Location
Oklahoma
She had planned on retiring at 65 for years now. Originally, it was to be handed down to her daughters and their families (not handed down but sold) but since the blow up 2.5 years ago they haven't made amends. The equipment is older equipment; the conventional stuff is quite old and doesn't have much value. The CNCs are old by today's standards but work well. It's a niche market, and even though it has been profitable, the attraction for other companies to buy is just not there. It makes me sick knowing that everything will be sold at .10 on the dollar, but it is what it is.

My business was no different really. The tooling I have is mostly exclusive to the heavy equipment repair business. Unless someone that was in the business wanted the tooling, it has no value to anyone else. Same with my service truck........yeah, it costs $150K to put the same truck together now, but all people see is a 2018 service truck with 182K miles on it.

Don't get me wrong. It's very discouraging but again, it is what it is and that's not going to change.
 
F

f311fr1

Senior Member
Joined
May 11, 2016
Messages
737
Location
Middle TN
I tried to sell my small construction business three years ago through a broker. They had me jumping through hoops and wasted a bunch of my time. Got down to the last go around with a buyer and when it came time to set a closing date he backed out. Fast forward to next week and all my equipment is at Ritchie Brothers in Nashville for sale. 6 excavators, 1 bulldozer, 3 CTL, 1 Tri Axle dump truck, 2 KUV vans, Ram 5500 service truck, 1 telehandler,1 compact artic dump trick, misc trailers. Sold all my inventory to a competitor who also took half of my employees and I found other jobs for the rest of my crew. It is a relief to finally actually retire. Neighbor behind me made me an offer on my farm so we are going to work it out. All my cows went to the sale barn 2 weeks ago. We are down to 2 goats and 2 LSG dogs and one horse. I see a personal property auction in our new future.
 
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Vetech63

Vetech63

Senior Member
Joined
Aug 10, 2016
Messages
7,885
Location
Oklahoma
I've spent the last few days unloading the tooling off my truck. I have both of these toolboxes loaded with everything that would fit in them and the stuff on top is there because I couldn't fit it in the drawers. 90 % of this tooling is used of course, 10% still new and never used. I didn't bother to clean up the tooling, straight from the truck to the box.

I figure, if bought new, all this stuff would be over $40K spent. I'm thinking about just including it in the wife's auction. It's unlikely to bring much I know, but it would be done and over with and I can move past it. Trying to EBAY this stuff would take way too much of my time and could take forever if I'm lucky.

Apparently, this auction is online only, which we didn't know about until this morning. I'm going to call the auction people tomorrow and see if I can add it and whether it would have a reserve I could set or be absolute.

You can sign up for the auction at www.bidspotter.com. For those of you that are local, you can view everything on site on Monday Oct. 27th from 10AM to 5PM. Look for the K&K sale.

I may include my spare Miller 225 welding machine too. I had it repaired and never used it after the repair; it's been sitting in her shop the last 6 years. Needs a battery and probably some carb work since it's been sitting and fresh gasoline. Ill add a pic of it later.

TB1.jpgTB2.jpg
 
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