Buying a Business

During the next week came my first face-to-face meetings with the brokers. I started with the one offering the hospital transcription service. Like many business brokers, he was a realtor who had kind of backed into selling businesses. He had no formal business or accounting background. He came to our appointment armed with a confidentiality agreement and four typed sheets of paper about the transcription company. The first three showed revenues and expenses for 1986, '87, and '88. The fourth sheet was a projection for 1989. There was no balance sheet. No customer list. No promotional literature. No written summary of the business and its history. He said none of that existed, that he had spent "days" just pulling together what I held in my hand. "You're lucky there's this much," he chuckled. He meant it.

On to the next -- the hard ass. He was located in a tiny, rundown building on a major thoroughfare in Bethesda, Md. He, too, was a realtor. I showed him my bio and my net worth statement. He was unimpressed. Then he noticed that I'd done some consulting and had started a business. "Where'd you get the money to do that?" he wanted to know. I told him my partner and I had raised it. "I need some venture capital," he said. "I happen to be a small investor in a company that's going to make a computer screen that will revolutionize the industry." He told me all about it. For an hour and a half. I asked him if he had any companies for sale that I might be interested in. "Not right now. I'll call you."

And so it went.

The first company I got really excited about was a sailboat dealership in Annapolis. Talk about playing while you make a living! I conjured up an image of going to work each day in khakis, a polo shirt, and Top-Siders, of spending hours each week on the Chesapeake Bay giving demos to prospective customers, of hanging out with the sailing crowd after work. The fact that I knew very little about sailing wasn't a problem, right? And so what if the owners were taking out only $43,000 a year? I could build it up in no time. What I didn't know about sailing I more than compensated for in marketing skills.

Eventually, cooler heads prevailed. The sailboat industry had been in a slump for several years; you started out each fiscal year from scratch (there was absolutely no ongoing cash flow); and I was not exactly an expert in the field. But what really turned the tide was this question from my wife: did I really want to spend my days with the kind of people whose lives revolved around a $250,000 boat? Still, the dream died hard. It was several weeks after deciding not to go any further before I could bring myself to tell the business broker.

As the weeks went by, I was getting discouraged. And I don't care how enlightened we have become as a society -- there is still something very uncomfortable about being a man at home during the week. Everyone in the neighborhood knows you're not working. Your friends know you're not working. People don't quite know what to say to you. It's like you're dying of cancer -- people don't know whether to say they're sorry or pretend the problem doesn't exist.

And then there are the days when the phone doesn't ring once. And nobody you've called is in. And you know you should be doing something, but you've crossed everything off your To Do list. Certainly people who are out of work go through self-doubt and anger and frustration and despair. I'd been through it before, and I remember it all too well. But for me, there was added pressure this time, because I wasn't spending time looking for work -- I was looking for a company to buy. And as each day passed without the perfect company surfacing, I had to ask myself, is this what you should be doing? Your family is counting on you, and you have done absolutely nothing today (or this week or this month) to protect them from the very real possibility that your severance is going to run out and you will have nothing to show for your efforts.

And what if you find something and go ahead and buy it -- what then? You may not even like the business. What if the key employees walk out the door when the owner leaves? What about the big accounts? What if you're being lied to? What if you pay too much? If you lose a job, that's all you've lost. But you're going to have to put up the house, the stocks and bonds, the college money, everything to buy a business. And if you screw up, you're starting over. Not at 24, with your whole life in front of you and no debts and literally nothing to lose. No, you're 37, and you have two kids, another on the way, and two houses and some savings and a lot to lose.

But balancing out the days of anguish was the unequivocal support of my wife -- and the time I got to spend with my daughters. At ages three and a half and one and a half, it didn't matter that their father was a bum -- I was around. They got to see me doing much of the cooking (particularly after daughter number three was born in mid-May) and the grocery shopping. We went out to breakfast together; we played hide-and-go-seek while the rest of the world worked; I got invited to their tea parties; and I would take one or the other on the bicycle to the post office or the bank or just to ride around the Naval Academy.

There was one sparkling, chilly spring day when I announced to my older daughter that we were going on a picnic. I packed lunch for us and off we went on the bike. We ate lunch next to the water, talking about this and that, just chatting away. At one point, I glanced down at her and she gave me a look that parents die for -- a look that said, "I-love-you-so-much-and-this-is-just-the-neatest-thing-I-can-imagine." That took care of me for a week.

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