Case Study – Would you Sell My Business
Problem:
In 2002, I was engaged by a client to sell his business. The Company had been in business for 15 years and had three locations as follows:
- Baltimore was 100% owned by client and had sales of $375,000
- Charlotte was 50% owned by client and had sales of $100,000
- Cleveland was 33% owned by client and had sales of $275,000
The other owners of Charlotte & Cleveland had no desire in purchasing our clients share.
The Baltimore & Cleveland locations had a history of making steady profits of 5% – 10%, however the Charlotte operation had never made a profit. As we dug deeper into the issues, it was learned the biggest issue was the client having to deal with day-to-day employee issues.
The Business had two primary operations, providing services to their clients and providing training in a public & private environment. The training division was the real heartbeat of our Client; it is his passion, drive, and comfort zone, but, it accounted for <$100,000 in sales, an amount insufficient to cover our clients take-home salary and operating costs of this division.
The Company in its current financial & operational condition was not an immediate candidate for sale. The Company operates in a highly regulated industry and requires intimate knowledge of the industry. Although, our client possesses the skills to run the Company technically, no one else in the Company possesses this knowledge.