By Associate John Howe, Director of our BTS Division

Through the years I have found golfers to be among my best connections, both personally and professionally. I also believe the game offers insights for business.

A few years ago a fellow member of the local golf league I participate in was diagnosed with a terminal illness. In order to survive, he needed to find a bone marrow donor. A testing drive was launched and held in a local industrial park building. I decided to go since Terry was someone I had always liked. Though competitive during matches, he was quick with a handshake and words of encouragement. He was the kind of guy you didn’t mind losing to, because he treated you like a winner.

I figured I would be all alone, the only one who would be there from the golf league. But when I got to the testing center, everywhere I looked were other members of the same golf league! These were business people from all levels, ranging from executives to production floor workers. It turns out, the league of golfers produced dozens of potential donors. We were all there to support a brother in golf. Respect matters.

Golf has a way of leveling the playing field.

I have played in countless charity scramble events. Teams are often composed of an executive and several lower level employees. Invariably, there is someone who rarely golfs and gets down in the dumps because they aren’t contributing to the team’s success.

That all changes when that same individual makes an important putt or hits one great shot. In other words, everyone contributes. And looking back at the event, those on the team soon realize how much they needed each other.

Golf demands honesty.

I remember playing in an event where I hit a big drive. The ball sailed over the hill, but we never saw it land. When we got to the rise of the hill and looked down, we could see a ball off in the distance.  It was very close to the green, a spectacular shot! Everyone was sure that it was mine. But when we got to it, I could see that it lacked the normal marking I put on my golf balls. Although it would have been tempting to not say anything, I declared that it was not my ball… and to groans and complaints from the team, we went back and played a much shorter shot from the rough.

Later that year I had occasion to be asked a challenging question by one of the golf team members regarding a business matter. The answer I gave was not what he wanted to hear. But he added this comment: “I know from golf that you are true to your word.” Honesty is not optional.

In business, we can learn from golf:

·         Relationships matter.

·         Everyone contributes.

·         Honesty is the best rule.

We have seen a lot of promotional news items and discussions lately telling us it is a great time to buy a business.

For instance, Interest rates are as low as they are ever going to be, banks are starting to lend money, business values are lower and good deals area available.   Sellers are being told they should market their businesses now because of the pent up demand of people out of work looking to “buy a job”.  Also, Capital Gains taxes may go up next year.  These are all valid observations.

However, while these things are all good reasons to buy, buyers right now should have the same concerns they always should have.  The right time to buy is when it makes sense in terms of your current situation.  For sellers the same advice is appropriate.

If a buyer has an appropriate down payment, and finds a business they feel comfortable they can take over and run, and they can see themselves making good money and a return on their investment, then “it is the right time to buy”, whatever other factors are involved.

Likewise, is a seller has reached the point where they have to sell, either for reasons of health, or because it is time to retire, or other circumstances making it appropriate to leave, then the challenge is to arrange a sale, under current conditions, that gets them the best deal they can arrange.

In other words, any time can be the right time to buy or sell, totally depending on the individuals circumstances and whether a deal can be structured for a win-win purchase or sale.

After my note to my Associates yesterday about it being the time to act now one of them, John Howe, wrote the following:

“Are you open to opportunity?

This is a great time to get going on your business dreams, particularly if they involve living in New Hampshire.

Our company president Leon Parker issued a memo with several excellent reasons why buyers should act now.

Opportunities come and go. Some see them and act on them. Others, ignore or miss them. Visible to you or not, the chance to be successful is there.

A few years ago a business man drove along a barren stretch of highway in Tilton, N.H. Off on the side was a little For Sale sign. Across the road was a large line of paving equipment vehicles. Ahead was a simple highway interchange.

Long story shortened, the end result was the first of what would become one of many developments that has turned the Exit 20 area of Interstate 93 into one of the busiest retail and business centers in New Hampshire. I have been told that a gasoline station operated by a large chain in that area consistently reports some of the biggest daily sales in the state from that location.

Someone saw an opportunity, not just open land.

Several recent news developments add fuel to the notion that now is a good time for business, and that New Hampshire is a great place to be. One is the fact New Hampshire remains among the top ten for business tax climates in the nation. The other is the fact housing costs in New Hampshire remain affordable compared to other New England states.

Keep your eyes open. Check out our listings and think what you could do if you were in charge.”

Our Associates are located all over the state (and Maine and Vermont).  Here is a copy of a message I just Emailed to them:

“I was visiting a local banker this week.  He asked me, “When are you going to bring me some good deals to finance?”   I realized this was third banker in as many weeks who asked me the same question.    With the banks saying “bring ‘em on” and the economy on the upswing, could there be a better time to buy a business?  Consider:

ü  Interest rates are as low as you are apt to see them for a long time.

ü  The SBA guarantee fees, which can be substantial, are being waived until the end of the year.

üBusinesses that survived the downturn are the ones you want.

ü  Prices are low but will be rising as the economy improves.

Give this message to all your customers - Want a business with good cash flow?  Here is a partial list of our businesses for sale that have Seller Discretionary Earnings (SDE) of more than $100,000: Ø  North Country feed store, $475,000:  SDE $107,000

Ø  Southern NH auto repair/lube shop, $300,000:  SDE $140,000 Ø  7-11 store, $458,000:  SDE $131,000

Ø  Seacoast c-store, $850,000 including real estate:  SDE $106,000

Ø  Lakes Region inn, $575,000 including real estate:  SDE $116,000

Ø  Southern NH c-store, $949,000 including real estate:  SDE $187,000

Ø  Mass border c-store, $1,375,000 including real estate:  SDE $284,000   My message: “It’s time to act!”  Tell customers to look at all the businesses we have for sale at www.nhbizsales.com. Sincerely,Leon Parker, CBIPrincipal Broker”

By New Hampshire Business Sales Inc. Associate John Howe

Sometimes it is good to be small.

This can be true for business as well, especially as the economy shows signs of improving. Though the big companies deal in larger sums of money and have economies of scale on their side, smaller firms can react more quickly and ramp up more appropriately to take advantage of shifts in the marketplace.

Many larger companies are trying to overhaul their cultures so they can be more nimble. But they are like cargo ships, where it takes a long time for instructions from the wheelhouse to result in a change of direction.

The trick for smaller companies is to find ways to preserve core elements that make their operations successful while being responsive to the needs of customers. They are like powerboats where it takes less effort to adjust direction slightly while still staying on course.

Business giant Wal-Mart has recently launched a new effort away from the cookie cutter approach to adjust stores to local tastes and needs. They are working to be more responsive. They are learning that sometimes the best ideas don’t flow from Bentonville.

Small business should keep this in mind. Being nimble and responsive to customer needs is a path to survival.

An example can be found in a local chain grocery store that offered a handful of pre-made sandwiches. They are quick to pick up, but lack the satisfaction available from the independent sandwich shop down the street that provides a choice of breads, options in meats and wide range of vegetables as toppings. And they can fill your order in minutes.

Which approach do you prefer?

The cause of being nimble is a strategic advantage small business owners should capitalize on. Rather than trying to match the big box stores, they can cater their inventory and services to their core market.

We recently sat at a busy intersection with four lanes of traffic.

Running through the maze of truck tires and speeding traffic was a small squirrel. It darted back and forth, reacting quickly to the movement on the highway. Against all odds, it made the crossing safely and went on with its search for food.

Being small and nimble has its advantages.

As we go thru the second half of the summer, when things are usually pretty slow in our business because it is vacation season, we are pleased with the level of activity we are experiencing.

Customer traffic has picked up.  Sellers are calling to consider listing their businesses for sale, and bankers are courting us again to bring them deals.

If you have been thinking of buying a business, and have some cash to use for a down payment, take a look at the listings on our web site.  Be aware that a lot of the prices on businesses for sale have come down because of the slow last year in most of them.  Also be aware that bankers are going to take a hard look at the deal and will be conservative in what they will finance.

In a lot of cases seller financing assistance is required and sellers are understanding that.

There has been a lot of publicity lately about Small Business Administration loan guarantee programs.  The best news is that they are covering their own financing fees right now, leading to very significant savings in closing fees for loans they guarantee.

On March 26th we put on the first performance of our new seminar about buying and selling businesses.  We developed this one based on several we did last year aimed just at buyers, and we think it is a significant improvement.

We are trying to schedule sessions in concert with lending institutions, hoping some of them will sponsor sessions, but more importantly getting them to participate so that buyers and sellers can get the latest information on the critical subject of financing right from the lenders, not second hand from us.

Our goal is to keep the presentations to an hour so we can have plenty of time for Questions and Answers afterward.

We always hand out critique forms and the ones for the session on the 26th gave us high marks for content, length of session, and our handling of the questions and answer period.

Watch our web site for an announcement of the schedule for the next one.

Following is a recent article based on an International Business Brokers Association Study.  We are more optimistic than the study indicates, because we are better off in NH than the market in a lot of the other states.

Survey: 2009 is Business Buyers’ Market

By Crystal Jarvis
Birmingham Business Journal
While the economy is expected to remain weak throughout 2009, there will continue to be plenty of opportunities for individuals and businesses in a position to buy, according to a recently released survey.

The report, published by the International Business Brokers Association, found that 61 percent of the survey participants believe that more businesses will go up for sale in 2009, while 66 percent of the brokers and intermediaries say they will sell more businesses this year compared to 2008.

“While the economy continues to put a damper on business sales, the continuing trend of baby boomers looking to sell and retire will provide opportunities for potential buyers,” said IBBA Chair Andrew Cagnetta, who is also president of Transworld Business Brokers in Fort Lauderdale, Fla. “The survey of our members indicates that money will continue to be tight and the number of sellers will still easily outpace the number of qualified buyers.”

The survey also found that in a buyer’s market, purchasers are more selective, so it’s important for sellers to make their business more attractive to buyers. Improving cash flow, updating documents and records and determining the company’s actual worth to make the business more attractive to a potential buyer is key to getting the business sold, it said.

The survey of more than 1,750 International Business Brokers Association members showed that more than 37 percent believe the economy will be down significantly this year and another 29 percent believe the economy will be down slightly.

We are really lucky to be in New Hampshire as the economy in the rest of the country continues to unravel!

Our local banks have funds to  finance business purchases.  Unemployment is still at low levels.  While the media frenzy over the problems of the economy has caused a lot of customers to cut back on retail spending, there are still viable businesses available for sale.

Time to Get Going:

Opportunity Knocks!

by Glen Cooper, CBI, CBA, BVAL

Vice President, New Hampshire Business Sales, Inc. & President, Maine Business Brokers

Adapted from the Fall 2008 issue of Business Buying & Selling

The quarterly newsletter of Maine Business Brokers

 Uncertainty creates opportunity. Times like these create tomorrow’s business legends.

      Today’s global changes in telecommunications, science, economics and politics are overwhelming. People around the globe are seeking new ways to cope with these changes. We are right in the middle of the mess that will be tomorrow’s “best thing that could have happened to us.”

      For those of us who are entrepreneurs, these are exciting times.

 And we are in America!

When I really take stock of what I have in life, I remember that I can’t complain – I get to live in America!

      Okay, I’ll admit: we have our problems. Well, actually, I would be bored if we didn’t.

      The United States, however, is still the greatest home for our investments. America is as physically, socially, politically and economically safe as anywhere else on earth. Other places may be shaky, but things still work here. We also have a great lifestyle. Who in the world doesn’t want to have what we have?

      Owning our own small business is also the best kind of investment. First, WE are in control. Second, owning our own business is the single best way to shelter income from excessive taxes, precisely BECAUSE we are in control. Maybe the best thing about owning a small business is that it is an invigorating and growth-producing experience. Yes, small business ownership is hard work. But that’s good. Because it is hard, it makes us tough.

A Once-in-a-Lifetime Market!

It is, in fact, a great time to sell OR buy.

      “How could it possibly be both a great time to sell AND a great time to buy?” you ask. Am I nuts? No, I’m a little creative sometimes, but not nuts. This really is a once-in-a-lifetime business buying and selling market.

      Today’s unique population demographics, fast-paced telecommunications, scientific advances and temporary chaos of world financial markets are all combining at once to create this one-of-a-kind market situation.

      Precisely because most people hesitate to act in a time of uncertainty, it is the ideal time to make our move, to become a leader in our field. People follow leaders. This situation offers a unique opportunity for each of us to lead the way in whatever we do.

       It’s a great time to sell IF it’s our time to do so, or if we need to sell in order to buy something else. It’s a great time to buy IF we can. So, within that context, it’s both a sellers’ and buyers’ market!

  Time to Sell?

      If it’s our time to sell, now is a good time because capital gains tax rates – now and in the near term future – are likely to remain low, or get even lower, for small businesses. They ARE low right now. Both major political parties have also indicated they favor further capital gains tax reductions for small businesses in the future. The definition of a small business differs, but it often is set at “under 50 employees.” That’s about 95% of all businesses in the U.S.

      A second reason it’s a good time to sell is that third party financing (from banks and other lenders) is still available at low interest rates and on pretty creative terms. This unsettled banking environment will bring out more alternatives, not fewer. Just watch and see!

      A third reason it’s a sellers’ market is that the hesitant sellers have withdrawn from the market, lessening the number of competing businesses for sale. Many sellers pull back in times like these, even though there really isn’t a good reason to do so.

      Finally, if our sales are up in this down economy, we will get extra amounts of buyer attention. Most businesses are experiencing a sales downturn, so the ones that are stable or growing are getting second and third “looks” by motivated buyers.

Time to Buy?

      If we are potential business buyers, there are businesses to buy that are bargains right now. It’s a great time to take that second or third “look,” especially at businesses whose sales and profits are temporarily down. Some business owners simply must sell and can’t wait. In that circumstance, most sellers will offer reasonable prices and generous seller financing.

      When available seller financing is combined with still-available loans at still-low lending rates from third parties, the resulting down payment requirement and loan package combination can be quite favorable. Lenders actually get more creative when times are tough, especially for well-qualified buyers.

      Finally, differences in technological and/or business savvy between a seller and a buyer can often create an opportunity for the buyer. Today’s rapid changes and generational differences contribute to this current phenomenon. The seller may not see a particular opportunity at all, or simply may be unwilling to pursue it.

      Many sellers, for example, just don’t want to computerize their businesses or develop a marketing strategy that involves using the Internet in what is being called “social media networking.” There are many businesses that can be re-invented and grown quickly with better use of today’s technology.

We Have More Power Today

When the system is broken, we actually have more power. That doesn’t seem intuitively correct, but it is. Let me explain.

      We are witnessing vast changes in the variables I mentioned in the first paragraph of this article – telecommunications, science, economics and politics. Nothing is likely to stop these changes because they are worldwide, interconnected and growing geometrically.

      These changes are bringing more power to each of us as individuals, no matter what else happens. A single individual can now be heard worldwide. That applies to our businesses as well.

      For the first time in human history, the whole world is linked by instant voice and visual communications. And, the most commonly shared language, lucky for us, is increasingly English! Whew! For example, did you know that there are more people in China who speak English than in the U.S.?

      Think about that for a moment. It’s scary and thrilling at the same time.

      This is just one example – albeit a major one – that predicts major economic change in our favor. From an entrepreneur’s point of view, new markets are forming!

      People from all over the globe – even though there may only be a few in any one physical location – can now get just about anything they want from an entrepreneur willing to supply their unique and special needs. Many small businesses – even very small ones – already serve worldwide specialty markets.

      That’s the power I’m talking about.

A Tipping Point?

Many people have read – or at least heard of – Malcolm Gladwell’s The Tipping Point, a well-reviewed book published in 2000. In it, he defines tipping points as “the levels at which momentum for change becomes unstoppable.” He says it’s a sociological term meaning “the moment of critical mass, the threshold, the boiling point.”

      In so many ways and in so many different fields, the changes we are witnessing are creating multiple and cascading tipping points. This is why it’s time for leaders in every field of endeavor to move forward.

      If it’s our time to sell, we should, by all means, move forward without hesitation. The buyers are there. The financing solutions are still there. The next chapter of our life beckons!

      If it’s our time to buy, the opportunities are everywhere.

      Because we now can talk to each other worldwide, maybe we can forge worldwide solutions that prevent the very large problems we seem to face.

      Because we are making unbelievable advances in biotechnology, maybe we can cure, heal and otherwise fix things we never before thought we could.

      In a world financial crisis, we may find our way to essential reform of the system.

      In our current national election, we may really get some long-needed changes.

      Not all change is good, of course. It never will be. But change is now coming faster and faster worldwide. We don’t have any choice about it.

      In the meantime, let us continue celebrate our American blessings by actively choosing to do something. We need to go ahead and take that next step now. It’s NOT time to hesitate. Opportunity is everywhere you look. It’s time to get going.