Track Record

› Tom and Jean Leonard

Kind words or what we learned on the way to the closing!

We met with Joe and Sandy in August of 2006 to discuss working with BizAdvocates to sell our business. We had purchased our business years ago so we quickly realized they had the skills to help us. We decided to invest in a third party appraisal to confirm it was the ‘right time financially’ to place our business on the market. We were pleased to also learn Joe and Sandy relied on the appraisal’s information before they agreed to represent us. By early November, I had completed gathering all the information and financial reports requested by the BizAdvocates staff for the appraisal company.

When the appraisal was completed, Joe and Sandy met with us again explaining the appraisal in detail…over one hundred pages. We were surprised as Norstar’s value exceeded our expectations. Joe explained why industry rules of thumb are not always applicable to every business transfer. Sandy’s understanding of the financial side of our business was impressive. At the conclusion of the appraisal review, Joe and Sandy paused for a bit…they were waiting for Tom and me to invite BizAdvocates to represent us.

Well, we did so then Joe and Sandy moved into what Joe described as their ‘sales mode’. They began explaining how their company functions, the importance of third party lending, how they obtain buyers and the qualities a buyer should have. They taught us their concept of selling ‘up’ which meant the buyer would already have similar industry experience and would be financially qualified for an SBA loan. Joe stressed the proper use of CPA’s and attorneys and the avoidance of an adversarial relationship with the buyer. Joe and Sandy worked as mediators/arbitrators and had the issues resolved before they became real stumbling blocks for us.

Norstar was officially on the market at the end of January 2007. By November 2007, Joe and Sandy with their staff’s help had found and qualified our buyer. While I was surprised at the number of inquiries about our business, Roland, our buyer, was only the second interested party to actually tour our business. Joe and Mona’s written monthly status reports to us had helped us understand and stay current on the transfer progress..

We first met with Roland in December 2007 when he toured the business with Joe and Sandy. A few days later, we received his ‘Outline of Intention’. Roland had returned home to Indiana and Joe had helped him write the ‘Outline’ via email. Our books and records (FODD) meeting took place on January 29, 2008. Both our CPA and Roland’s were present for the daylong meeting. Joe and Sandy then guided Roland through the loan process with predetermined SBA lenders. We closed on March 28, 2008 in the conference room of Banner Bank. A closing attorney, Sandy and the bank’s senior officer worked together to facilitate the closing process.

The one thing that stands out in our minds about this transfer is just how wonderful the BizAdvocates staff was. There was not a question or problem too insignificant for them to respond to. I always knew that I could count on them to advise and help me. Joe and Sandy are able to accomplish so much more because they have a great support staff. Everyone was so professional, yet caring, and I often felt like we were their only clients even though I knew there others just like us out there!

The thing that we liked best about our transaction is that we received the appraisal price. There was no quibbling about price, no offers, no counteroffers (at least, none they we have ever heard about!), and no contracts to carry. Joe had explained to us that this was the way they did business, and that the appraisal price would be the final price. It was!

Our only disappointment was that we wish we could have sold the business sooner, but we realized that it would take a while because of our location and the nature of the business. We are in a rural area, 75 miles from a large city. Even those who were familiar with our town felt it was too far away for comfort. We knew we would have to find someone who wanted to first, ‘live’ in the area and second, understood the value of our business.

The other challenge was that our business is technical, requiring licenses and certifications from the state. It can be daunting to work through the requirements for the State. At the same time, we needed a buyer who was familiar with the industry and was financially qualified.

As to possible advice to for a new buyer, I would say, “slow down”! Listen to the Exiting party, ask questions, and get a grip on the business before making changes. Be patient. You bought the business because it was a good business, and fit with your goals and life’s plan. Learn the business first, and then make the changes that will make the business your own. No matter how much better you may think your way of doing things is, the Exiting owner had many loyal employees and customers who thought he and his ideas were great. In addition, the family commitment is so important in making such a life changing move. Tom and I worked together for 14 years and learned the ‘dance’ of how to make our marriage partnership work with our work partnership. Both martial partners need to fully understand and support the anticipated changes in their lives.

For someone Exiting a business, have a written plan for training the new buyer. Sit down with the Entering party and review the plan; have both parties agree to the plan, and follow it. Set a training / transition exit date, and stick to it. If you have a good plan, and both parties participate, the exit transition will be successful

The whole Exiting process was a very positive experience. My husband had some serious health difficulties during the last quarter of 2007 at the same time Roland was touring our business. That we were able to deal with those issues and work with Joe and Sandy to sell the business at the same time still seems overwhelming to me.

We are very pleased with the transaction and with Joe and Sandy along with the BizAdvocates staff. We feel we ran our business as professionals and exited it in the same way. BizAdvocates’s fees were not an expense; they were a very good investment. We wish all reading this the best as you enter or exit your business ownership. In any case, you are starting a new and exciting chapter in your life! Congratulations!

Tom and Jean Leonard
Norstar Heating and Cooling