2/14/2010 8:25:00 PM A Conversation With ... Chuck Woolley
Title: Partner and business broker Company: Kingsley Group Business Brokers, 1350 E. Kingsley, Ste. C Education: Bachelor’s degree in biology with a minor in chemistry, Missouri State University; completed executive development courses at University of Illinois From the Windy City to the Ozarks: Woolley, a Springfield native, spent about 28 years working with two large companies in the Chicago area. He was vice president of operations for Kraft Foods and executive vice president of operations for Sara Lee. Contact: chuck@kingsg.com
Tell us about your company. We help small-business owners buy and sell businesses. Everything that we do is confidential. … We provide them with a fair market value of the business, and that’s typically based on cash flow. We also have staff in place (to) assist companies in enhancing their current business performance (and) help with some succession planning. … We have seven brokers on staff, including (co-owners) Gary Rogers and myself. Then we have two full-time administrative staff and two part-time employees who are full-time students.
How do you help business owners determine if selling is the right move? One of the two primary questions we’ll ask the seller is, “Why do you want to sell?” And that can be a handful of reasons – they’re ready to retire, they’re just tired of doing it, there are family issues. The second thing, which is really important, is, if they sell their business, what’s the real expected outcome of the sale? What do they want to accomplish? Sometimes we discourage people from selling their business at the current time. There are many times that we’re not going to be able to sell (businesses), because they’re not profitable enough to find the right kind of buyer.
Has the recession created challenges in terms of buyer financing? The last two years have been a real significant challenge for buyers to be able to obtain financing. It’s been a moving target since October 2008. … Banks want collateral. Small businesses … have a lot of value in goodwill, so unless the buyer has other assets to pledge, it’s sometimes a challenge to be able to get the financing. In today’s environment, it’s even more important that the seller is probably going to have to be willing to provide some of the financing for the transaction. Banks are very reluctant to loan on goodwill – reputation, but no hard assets.
How would you characterize the local business market? The number of businesses for sale is not too different than normal, but it’s an inadequate supply of healthy businesses. We’ve got a lot of qualified buyers, but we’re always looking for some good sellers. … It’s a great time to buy a business. Interest rates are the most favorable they’ve been in years. I think it’s a good time to sell, because there’s an abundance of buyers, if there are good businesses with cash flow adequate to support debt and pay a reasonable salary. … We’ve got lots of buyers for good manufacturing businesses, but it’s amazing how few are available.
Will you approach an unlisted business on behalf of an interested buyer? We have some buyer engagements. We try to understand a number of things about (buyers). What have you done in the past, what do you like to do and do you have sufficient cash to accomplish a transaction of the size you’re talking about? We usually have 40 to 50 businesses listed at one time, and there will be something on that list that probably will be of interest. But we do approach businesses that aren’t on the list if (buyers) are targeted enough … to attempt to find a business that fits their criteria.
Are more owners seeking help to improve their current business performance? There’s an uptick in demand, but there’s a real reluctance on many people’s part to spend the money to get the help. We’ve got one gentleman in our firm who (performance enhancement) is probably half of his responsibilities. He’ll go in and sit down with the business owner and do a full assessment of the business, everything from purchasing to inventory. … Unfortunately, a lot of people wait until they’re in trouble before they ask for that kind of help. If somebody comes to us in preparation for selling a business, we will always make recommendations on things they can do to enhance the value of the business.
