Time to Pick the Fruit
By Bill Sendelback
PHOTOS: ©2020 SANDRA STAMBAUGH PHOTOGRAPHER. WWW.SANDRASTAMBAUGH.COM.
Dick Hoffman began his retail career in Asheville, North Carolina, in 1995; 23 years later, he and his wife Gleyn decided to sell the business.
“We had a strong business, but it was time to slow down and pick the fruit off the vine,” he said. Hoffman knew better than to try to sell the business on his own, so he hired Viking Mergers & Acquisitions, a business resale broker with seven offices in the Carolinas and the Southeast U.S.
Although Hoffman is the current chairman of the HPBA, his move to sell his business was prior to the HPBA developing and offering the services of Sunbelt Re-sales to HPBA members.
Joshua Wagner, the new owner of Firelight Hearth & Patio.
“Past HPBA chairman Joe Burns accurately recognized that too many of our Mom-and-Pop dealers have not planned to exit their businesses,” says Hoffman. “Too many times these stores simply are closed and liquidated. Most dealers have so much to do to run their businesses that they don’t have time to do what a broker can do to sell that business. Our sale was an extremely positive event. We would not have had success if we had tried to sell our business without a broker.”
Hoffman’s broker first visited the Asheville store to see the facilities, discuss the business, its background and financials, and learn what the Hoffmans expected from the sale. “When you sell your business, it’s not just about your inventory. With your financials, including your profit-and-loss statement, it’s about showing the store’s cash flow and showing a prospective buyer the potential of the business and what he can expect as a return on his investment.”
From all this information, Hoffman’s broker evaluated the business and presented a marketing plan and a suggested sales price. “We had an amount in mind, but the broker actually said we could get more.”
While marketing Hoffman’s business and screening prospects, the broker also reached out to potential lenders to pave the way for buyer financing. The entire effort remained anonymous until it was “appropriate” for the seller and buyer to be revealed. In the case of Hoffman’s sales effort, the broker found three persons interested in the business, ironically none from the hearth products industry.
A wicker group next to a linear fireplace.
The sale closed in September, 2019. Hoffman’s buyer had a corporate background in the window and door industry. “He wanted to step away from corporate life and relocate his family to our area,” says Hoffman. “We thought this whole thing might take a year or two, but with our broker, it took only nine months.”
Hoffman says the brokerage fee for the sale was “a significant amount and a little bit of sticker shock, but it was well worth it. We came out much better off than if we had tried to do this ourselves.” Hoffman’s sale was a sale of the assets of the business while he retains his corporation and the property which he is leasing back to the new owner.
While helping to bring the new owner up to speed in the business and working with the HPBA as chairman, Hoffman plans to finish renovating his two sports cars and to travel to see kids and friends. “Now this is almost like a second career. Maybe now we’ll figure out what we want to do when we ‘grow up.’
“If you’re thinking about selling your business, it’s critical to be able to provide financials, a P&L, strong documentation, and a history of the business. So maintain good records.” If you want to talk with Dick Hoffman about his experience selling his business, email him.
Fireplace and mantel displays.