The November article " For Sale: The American Dream" explored a pattern of customer complaints racked up by Great Western Business Services, a company that markets for-sale businesses, based in Dallas. A surefire conversation starter, the investigative piece, written by senior editor Joseph Rosenbloom, pushed the buttons of entrepreneurs who have had similarly unhappy experiences.
Another Dissatisfied Customer
Whenever Joseph Rosenbloom writes an article on the alleged malfeasance of a company that sells a service to small businesses, other entrepreneurs pop out of the woodwork, claiming that they too were victims of the article's subject. The Great Western Business Services investigative piece proves no exception to that rule.
It was great to see your article on Great Western Business Services and their slick-talking sales staff. I was once a client of theirs, too. I was told that Great Western would advertise my business until it sold because they really didn't make any money until they found a buyer, as all the deposit money I paid them -- more than $7,000 -- was absorbed by their advertising costs. Great Western did send me a few leads on potential buyers, but some of them were impossible to reach and others were simply not interested in my deal. Imagine my surprise a couple years ago when I received another postcard in the mail from Great Western, again asking if I wanted to have my business evaluated. Not only couldn't they find a buyer for my business, but they couldn't even keep their database sorted out to know they had already milked me! I sent them a strong letter reminding them they were supposed to be finding me a buyer and, since they obviously weren't, asking them to refund the money I had originally paid them. I never heard back from them. I hope your article saves others from making the same expensive mistake I did.
MHRV Show Association Inc.
Another reader seconds that motion.
In reading the stories of the two companies profiled in Rosenbloom's article, I experienced dÃ‰jÃ vu. I contracted with Great Western Business Services the day before Thanksgiving 1999, albeit with misgivings, to "generically advertise" for the sale of my remotely located small business. I wanted out and didn't know how to effectively put the company on the market or what price to ask. The business evaluation I received was worthless (and at first incorrect -- the figures used in the report were not what I had submitted), and the "potential buyers" sent to me monthly were either unreachable or uninterested.
In disgust, I terminated my contract 11 months later. I asked for a full refund of my $3,575 deposit, claiming that Great Western's matching process was inadequate and its database inaccurate. In addition, I noted that I hadn't received anywhere near $3,575 worth of service.
Their reply was courteous and slick. "We are disappointed not one of the 54 individuals responding to our advertising was interested in your specific business," they wrote. I filed a complaint with the Better Business Bureau of Metropolitan Dallas and soon after received another letter from Great Western stating that the company had fulfilled its contractual obligations and, therefore, a refund would not be forthcoming.
Early in 2001, I sold my business to a local couple at a price less than half what the field representative had calculated and a mere third of the evaluation's bottom line. I hope your article saves at least one small-business owner from wasting a chunk of hard-earned money contracting with Great Western.
Fort Jones, Calif.
Great Western responds: Next to the start-up period, the time in which decisions are made about selling an enterprise is perhaps the most difficult period in the life cycle of business ownership. Owners generally have deep personal and emotional stakes in their businesses, along with very strong expectations as to the business's attractiveness and worth. As reported in the article, our job is to match business sellers with potential buyers. We cannot and do not guarantee how attractive any given seller's business may be to buyers in our database. Likewise, because we provide marketing support and not business brokerage services, we do not participate in the actual sales process. As a result, we have no control over how the business is presented, beyond the tools we furnish. The type of business, price, and geographic location initially drive buyer interest. More complex factors, such as the chemistry between the seller and the prospective buyer, affect whether a sale actually occurs. As with any company, we continually are seeking to improve the quality of our services.
Umbrellas of Shared Work
Julie Bick's November cover story, " The New Face of Self-Employment," profiled a collection of maverick soloists clustering together to form a powerful entrepreneurial engine sans the organizational burdens of an outright company. It is a trend that's here to stay, according to this devotee of the idea.
Full Circle Management, founded in 1999, has an approach that's similar to Indigo Partners'. We develop growth plans for organizations and are involved from conceptual development to execution. To implement plans we team up with several organizations -- from telemarketing and software businesses to marketing companies -- but never lose control of the relationship. Our clients appreciate our agility and benefit financially from our lean structure. With today's technological tools, creating a brick-and-mortar structure for every business simply doesn't make sense.
Full Circle Management
Touched by an Angel Story
One investment-hungry entrepreneur found encouragement in Paul B. Brown's " Seven Steps to Heaven" (October), which picked the brain of angel investor and author David Amis for secrets to getting financing when the economy sputters.
Many thanks for the wonderful advice proffered by David Amis in Paul Brown's article. It was the best insight anyone has ever provided into the world of angel investors. My only frustration is that I have learned the hard way that angels have what I call a comfort zone, which means that there are certain markets they are familiar with and that's it. We've met a guy who does only restaurants; another who does only car washes; still another who's comfortable only with women's perfume. So here we sit with prototypes, a patent, and market validation, but we still need to find a needle in a haystack -- that is, an angel who understands and loves our market.
Tread Pad Partners LLC
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Near Harlem's storied 125th Street, small businesses are in danger of failing. But they're not down for the count just yet.
" Who Owns Harlem?" asked a headline in the August 2000 issue of Inc. At the time that article ran, an influx of development capital from both government and private sources had sparked a stunning commercial revival in the Upper Manhattan neighborhood, an iconic center of African American culture that had become equally notorious for urban blight. To the dismay of many local entrepreneurs, retailers like the Disney Store and Old Navy seemed to be benefiting from Harlem's revival more than homegrown businesses. For African American entrepreneurs who had held their ground through the neighborhood's worst times, that was simply galling.
More than a year later, the worst fears of Harlem's veteran small-business owners have been realized. "Just now it doesn't seem like there is much of any black-owned business left here in the block where I am, which is the pinnacle of 125th Street," says Sikhulu Shange, owner of the Record Shack, a shop that grosses $500,000 a year. For Shange's business, the big new competitor is HMV, which opened a store a few blocks away. And vying for customers is only one of the Record Shack's problems. In August the shop's landlord announced plans to raise the rent from less than $3,000 to $6,000 a month. Shange is trying to negotiate. If that effort fails, he says, he'll have to either move -- a risky proposition for a merchant whose sales depend on walk-in traffic -- or close. "I've been in this spot 27 years," Shange says ruefully. "My store has been here more than 50 years."
If Shange is the old face of Harlem small business, now threatened with extinction, Susan Van Brackle is the new one. Where he is entrenched, she is opportunistic. It took nearly two long years for Van Brackle, whose cosmetics store, Miksu, opened in September, to obtain a loan from the Upper Manhattan Empowerment Zone, which has been notoriously slow to lend to small businesses in Harlem. But in the end Van Brackle secured a $100,000 loan. She first wanted to put her store in the brand-new Harlem USA shopping center, a cornerstone of the neighborhood's economic revival that's located near Shange's Record Shack, but that deal fell through. "The developer was not in love with the idea of doing business with a small retailer," says Van Brackle. Still, in a neighborhood that covers about four square miles, there was more than enough Harlem to go around. Van Brackle found a storefront half a mile away in the still-depressed east side of Harlem, where she's thrilled to be paying less than $2,000 a month in rent instead of the $5,000 that she would have paid in the shopping center.
Decorated in sleek blond wood and black trim, Van Brackle's store is a tiny bit of downtown chic transported to a gritty street corner where her neighbors include a bodega and a somewhat battered liquor store. That nod toward style is turning out to be a competitive advantage. The store is drawing plenty of local customers, who formerly had to trek downtown for high-end cosmetics, says Van Brackle. "People are walking by and driving by and going, 'Whoa!" she says. "Harlem is changing. It's on the verge." --Emily Barker