Buying a Business

But that wasn't how I was thinking this time around. I was thinking about what I didn't want. I didn't want to risk everything; I didn't want to spend six or nine months or a year and have something not work; I didn't want the emotional commitment a new business demands; I didn't want something that would take me away from my family ("Sorry, dear, Daddy's sleeping at the office -- again").

My wife was seven months pregnant with our third child. She wasn't going to be in a position to bring in a lot of money anytime soon. Besides, I didn't have the "big" idea. No fire in the belly. And on top of that, I definitely didn't want a board or a group of investors looking over my shoulder. I've already read that book, thank you very much. Give me a nice little business that needs some marketing savvy or maybe just some new energy. Nothing wrong with it, of course. Affordable. Maybe even located in town so I can walk to work and come home for lunch. I don't need to build an empire with it (at least not until the kids are a little older), just take out a reasonable salary. Am I asking so much?

The time had come to take on the business brokers. I called the first one and told the secretary: "Hello, my name is Hendrix Niemann. I recently left a job as president of a company in Washington, and I'm now looking for a company to purchase. I would like to speak to someone about my specifications and, in turn, find out what you might have available in your portfolio." (Take that, Donald Trump!)

The broker picked up the phone. He asked a little bit about my background. Then he asked, "Well, Mr. Niemann, what kind of company are you specifically looking for?" I laughed nervously. "I'm not exactly sure. I guess I feel a little like the late Justice Stewart felt about pornography: I can't precisely describe it but I'll know it when I see it." (Did I impress him with my erudition? Or does he think I'm a flake?)

"Uh . . . yes . . . well, what size company did you have in mind?" (I hadn't even thought about this.) "Umm . . . well, I suppose sales between $1 million on the low side to $5 million on the high side." "Those would be pretty good-size businesses. How much money do you have to invest?" (Uh-oh. What do I say now?) "Well, that would depend, of course." (Brilliant answer!) A pause on the other end. "Most deals require from one-third to one-half down. Do you have that kind of capital?" (I wasn't exactly sure what I could afford or how to figure out what I could afford. I wanted to get as broad a range of options as possible and then figure out how to finance the one I wanted.)

"Well, I don't want to suggest that I have a net worth of $1 million or anything like that. But I've done a lot of deals [only a slight exaggeration] and I know how to secure capital when I need to. So I would very much like to find out what you have." (The best defense is a good offense, right?)

"Hold on a minute, would you, Mr. Niemann?" He was back in a few seconds. "It happens, Mr. Niemann, that I do have a couple of things you might be interested in." (I'd made the first cut!) He had three possibles. I was interested in one. It was a company that provided transcription service to hospitals for the records doctors have to keep of surgical procedures. We made an appointment for the following week. A successful start.

The next broker was a man with a very thick accent. I told him who I was, and so on. "I got one I think you might like. It's a company that makes sandwiches, you know, for vending machines." I asked about revenues. What are the owners taking out in terms of salary, profit, etc.? "I don't have all the information right in front of me, but let me tell you, 15,000 is a helluva lot of sandwiches, my friend. That's how many sandwiches these guys make a week. These guys do very well."

The last broker I talked to that day took the hard-ass approach. He wasn't buying my act at all. After my by-now standard line, "I'll know it when I see it," he replied, "Listen, Mr. Niemann, how the hell am I supposed to find you something if you don't know what you're looking for?" Taken aback, I suggested that I was sure a man in his profession faced this situation every day. "Well, what have you done, anyway?" After I described my background, he said, "So, you're a media guy, huh? Why don't you buy a newspaper or a magazine or something like that? How much money have you got, anyway?" I gave him a "couple hundred thou" range. (I'd refined my pitch during the course of the day and was trying out different selling prices, down payments, and what I wanted to take out.) He grunted. Then: "How much you need to live on?" Around a hundred, I said. He snorted. "Listen, pal, if you can find a business that's going to pay you a hundred after debt service, and you can get away with putting only a hundred or two down . . . well, good luck." I suggested that the other brokers I'd spoken to had not dismissed my "strategy" so readily. "Yeah, well, they don't know shit. I do. I'm about to turn the business broker industry in this town on its head. I'm going to have all the best listings. You just wait."

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