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Hawaiian flower farm
Issue: May 1991
Price: $1.2 million; inquiries: 30
Status: Still for sale
Inquiries have come mostly from mainlanders who say they'll have a look when they're on the island. Nothing sounds serious yet.
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Idaho up-country ranch
Issue: June 1991
Price: $2.5 million; inquiries: 10
Status: Still for sale
The most avid inquiry so far came from a woman looking for a site for an Arabian-horse-breeding farm. She visited the ranch but thought it a little too rugged. She has an aversion to heights, says the owner, and found some of the trails too steep and narrow. But she did fall in love with the property; had it been a little flatter, she'd have bought it. Inquiries keep coming in, nine months after publication.
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Small-town weekly
Issue: July 1991
Price: $950,000; inquiries: 30
Status: Pulled off market
The broker has received calls from several types of parties: other brokers (which doesn't thrill him); a few individuals who wanted to purchase the paper and return it to the employees through an employee stock ownership plan (the owner isn't interested in that); and a few legitimate candidates. The problem, according to the broker, is that the seller is sticking to his price -- which is too high, given the current sour newspaper climate. The poor economy puts the paper in a catch-22: potential buyers want to pay rock-bottom prices (and cite credit tightening and falling ads as justification), while the seller, remembering the newspaper boom days of yore, thinks his paper will fetch more. Newspapers aren't the only businesses that aren't moving: this broker currently has an all-time career high of listings on the market.
Seattle bookstore
Issue: August 1991
Price: $62,000; inquiries: 30
Status: Still for sale
Inc.'s page generated several visits to the store by prospective buyers. Not one response, though, came from someone with bookstore experience -- inquiries were all made by entrepreneurs and managers who tended to get scared when they saw what this business is really all about. "That's what's dangerous about a dream business," says owner John Marshall. "The emphasis is always on the dream." The word is out in the trade, and Marshall thinks that's the way his store will ultimately sell. He'll hang in there until that happens. A father-son duo are strongly interested; they originally called and said they'd take it in three days, then disappeared for a few months (doing industry research, presumably). They now say they're still considering it. Wealthy father would be buying it for his son; son has "the right instincts," but virtually no experience. "At this point it would be difficult for someone with no experience to step in and expect to improve the business," Marshall says.
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Family-run child-care center
Issue: September 1991
Price: $940,000; inquiries: 0
Status: Still for sale
Not one inquiry! That may be attributable in part to the fact that the owners listed a post-office box in lieu of a phone number for contact. They even sent letters to themselves to make sure their box was in working order. Alas, it was.
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Maine model-ship maker
Issue: October 1991
Price: $365,000; inquiries: More than 200
Status: Sold
"To say the response [to Inc.'s page] has been overwhelming is an understatement," wrote broker Don Giancola last December. "We received our earliest responses from the Chicago area. Maybe there are a lot of landlocked sailors in the Midwest. You might also be interested in the diversity of the people who responded. In addition to the typical potential buyer, we received serious inquiries from presidents of two publicly traded companies and from William Seidman, former head of the FDIC. We now have multiple offers to purchase the company. A very highly qualified buyer (and Inc. reader) will be closing on the transaction December 31, 1991." The sale did close (for slightly less than the asking price), with the company going to a woman who aims to bring more sophisticated marketing to the business by capitalizing on her background as a strategic planner. Her husband, head of human resources worldwide for Motorola, wants to take early retirement and was anxious to move to the Maine coast.
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Arizona AM radio station
Issue: November 1991
Price: $650,000; inquiries: 100
Status: Still for sale
Responses came from all over the country, says the broker, as well as from Nova Scotia. He's optimistic that one of the inquiries will turn into an offer. A reli-gious-radio-station group, based in Santa Ana, Calif., with stations nationwide, was very interested but wasn't satisfied with the signal at night. Two lawyers, one from Chicago, one from New York City, are seriously considering purchase.
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New Hampshire country store
Issue: December 1991
Price: $325,000; inquiries: 30
Status: Sold
"Readers all over the country have called to inquire about the store," wrote broker Gerry Sears shortly after the article appeared. "There are a considerable number of dreamers out there, and the talks with the people who have called have been very productive. To date, I have sent out 22 initial packets and have received several secondary responses." By this past February, Sears had a buyer.
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Minor-league baseball franchise
Issue: January 1992
Price: $2.5 million to $3 million; inquiries: 60
Status: Sale pending
Early response was vigorous. Also, several other deals by this broker (sales of other teams) have been initiated, thanks to the article.
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SAME OLD STORY
An open letter to businessowners -- and would-be sellers -- everywhere
Editor's note: Among the most articulate commentators on Business for Sale results was Susan Pravda, a mergers-and-acquisitions specialist with the Boston law firm of Varet Marcus & Fink. Here's what she wrote when we asked, Why haven't more of these companies been sold?
1. Bad timing. The market window this update deals with -- from late 1990 through early 1992 -- was probably the worst period in the past two decades for buying and selling small businesses. After the overheated mergers-and-acquisitions climate of the late 1980s, the market came to a jolting halt.
On the sellers' side, owners were still living in the high-priced days of the '80s, thinking that if their country-club friends were able to get eight times earnings for their companies, why couldn't they? On the buyers' side, prospective purchasers were paralyzed by a combination of fear about the economy and the unavailability of financing. (Many banks stopped lending to finance the working capital of existing businesses and were certainly not interested in financing acquisitions.) Prospective buyers also were spooked by the number of failing deals and bankruptcies.
