COMPANY: Illinois Race-Car Safety-Equipment Retailer
FEATURED IN: May 1996
ASKING PRICE: $230,000
# OF INQUIRIES: 1
RESULT: Sold for 95% of asking price in April 1997
COMPANY: Arizona Golf-Club Manufacturer
FEATURED IN: June 1996
ASKING PRICE: $1.1 million
# OF INQUIRIES: "Maybe 300"
RESULT: Pulled off market; owner decided to restructure the business himself, with the help of an overseas investor
COMPANY: Georgia Tennis Club
FEATURED IN: July 1996
ASKING PRICE: $345,000
# OF INQUIRIES: 50 to 60
RESULT: Sold for $325,000 in May 1997
COMPANY: Bakery and Restaurant in New Mexico Ski Region
FEATURED IN: August 1996
ASKING PRICE: $2.4 million
# OF INQUIRIES: 116
RESULT: Pulled off market; owner's children decided to get involved
COMPANY: Hawaiian Kayaking Company
FEATURED IN: September 1996
ASKING PRICE: $169,000
# OF INQUIRIES: 86
RESULT: Sold in October 1996 for $160,000
COMPANY: Regional Collection Agency
FEATURED IN: January 1997
ASKING PRICE: $2 million
# OF INQUIRIES: 25
RESULT: One deal fell through; owner took business off market
COMPANY: Rocky Mountain Video Distributor
FEATURED IN: April 1997
ASKING PRICE: $650,000
# OF INQUIRIES: 50
RESULT: Several strong candidates; owner believes a deal is imminent |
Resources
Selling or buying a private company is hard to do. So don't rely simply on whatever your emotions (or business brokers) tell you. Here are three top-notch books that can quickly boost your expertise:
- How to Buy a Business: Entrepreneurship Through Acquisition, by Richard A. Joseph, Anna M. Nekoranec, and Carl H. Steffens (Dearborn Trade, 800-245-2665, 1993, $19.95), offers a shrewd look at key considerations to keep in mind when purchasing a small business. (Among them: the benefits of broadening your search beyond your fantasies.) It also details how to find and evaluate prospective acquisition candidates. Would-be buyers should find the long chapter on financing the acquisition especially helpful. Don't make an offer without it.
- The Buying and Selling a Company Handbook (Price Waterhouse, 1995, $3) can't be beaten when it comes to explaining the tax and other financial considerations relating to company sales and purchases. True, it's technical and can get so complicated it's off-putting. But if you spend some time working your way through it, your chances of success will inevitably improve. Isn't that worth a migraine? For a copy, call the communications department of your local Price Waterhouse, or call 212-819-5000 and ask for the marketing department. Or write to Douglas Calvin, Price Waterhouse, Middle-Market and Growing Cos. Group, 1251 Ave. of the Americas, New York, NY 10124.
- How to Sell Your Business for More Money in Less Time with Fewer Problems, by C.D. Peterson (McGraw-Hill, 1990), is out of print, but it's worth trying to find it at your local library. What Peterson lacks in style, he more than compensates for by quickly and clearly answering an enormous range of questions a prospective seller might ask. Among the most useful chapters is one that addresses an all-too-typical quandary: "I did everything within legal bounds to keep my reported earnings--and therefore my taxes--as low as possible. How can I show buyers what my business is really worth when my books show such low earnings?" If the work sheets and sections describing the intricacies of business-valuation methods seem too complex, skip them and focus on meatier matters.
If you'd like to read the original Business for Sale columns covered in this story, they appear in the magazine, April 1996 through May 1997. You can also find the stories in our on-line archives; type Business for Sale for keyword search and select Sort by date.
HOULIHAN LOKEY HOWARD & ZUKIN, Scott Adelson, 1930 Century Park West, Los Angeles, CA 90067-6802; 800-455-8871 76
