Article in KC Starless about selling small businesses.

I would not have bothered posting except the one of the business mentioned was a roofing buisness.

http://www.kansascity.com/business/story/766230.html

“Business owners thinking about selling should begin preparing two or three years before they actually hope to close a deal. Ideally, processes, key personnel and consistent operating results should all be in place before the “for sale†sign goes out.

That may be even more important in the current down economy, when many businesses are seeing revenues slip and credit is harder to come by. Potential buyers want businesses that have all their ducks in a row.”

“One of the biggest issues Jeff Olsen, owner of Pass the Torch Inc., sees with small businesses is an owner who is the business. No one wants to buy Joe’s Plumbing if Joe is no longer there and there aren’t other employees or even very many assets.

Owners wanting to one day sell should be putting in place key employees so eventually they become the CEO, said Olsen, whose Kansas City company advises owners.

“That’s the heart of exit planning,†he said.”

“Trozzolo Communications Group acquired McNamara’s Overland Park advertising firm at the end of July. But in many ways, McNamara had his eye on this kind of exit strategy years earlier.

At the end of 2006, when he hired Business Transition Specialists, a Leawood-based broker, he had his books in perfect order. He had procedure manuals and written plans, all things that must be in place for a successful sale.”

“Larry Hanks, 63, sold his salvage business at Rainbow and Southwest boulevards four years ago. Then within months the company, Surplus Liquidators, went under.

“When you own a business, to keep it in business, it’s more work than most people believe,†said Hanks, who ran the company with his wife, Mary.

The story illustrates why sellers should think hard before they agree to help finance a sale, something many brokers say is becoming more common in this down economy. If Hanks had done that, he said, he’d be out the money.

Of course, he was sorry to see the business’s demise, but he got six figures for the sale, which included the building and a prime piece of land. But he tries to keep the whole thing in perspective. After all, it was just a business.”

“For Mesler, selling was without a doubt right.

“The business had become more than I could manage myself, and finding additional key people was really beyond my patience,†he said. “I felt like there was probably someone out there who could do more with what we’d already started. I just wasn’t willing to take it to the next step.â€

On top of that, 2003 and 2004 were dismal for business. Mesler Roofing, which specializes in high-end roofs, often atop multimillion-dollar homes, was in a slump.

“I was getting tired of going through these tough times,†Mesler said. But he knew he shouldn’t sell when business was down. So he waited, running things until it turned around.

From his broker, Allied Business Brokers Inc. of Leawood, he got pointers about how to make the company attractive. Then he kept on waiting and working.

By 2006, business had turned around, and it continued to improve all through 2007. With annual sales around $2 million, business was at a high and Mesler knew it was time to sell.

After interviewing numerous potential buyers, Mesler found Gregg Davidson, a Dallas businessman who was looking to leave a corporate career to run his own business.

Davidson didn’t have a roofing background, Mesler said, but he had good intentions and shared “the same moral ethics.â€

As part of the deal, Mesler stayed on with the company for 90 days to show Davidson the ropes.”