Business brokering requires finesse

LOVELAND – In today’s economy both buyers and sellers of businesses must get creative. A few years ago it took 90 to 120 days from the time a business went on the market until it sold, but now such sales are more likely to take 7 to 9 months.

Part of the reason, according to Tom West, owner of Business Brokerage Press, is that buyers have become extremely cautious. “Buyers demand more detailed financial information,” he explained.

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That’s where an experienced business broker can make the difference. Marcie and Ron Woolworth, partners in We R Business Brokers in Loveland, have brokered over 300 deals in Colorado, Wyoming and Western Nebraska markets. The Woolworths think of themselves as matchmakers, pairing up people in the market for a business with available companies that would be a good fit. They keep a database of clients and stay in touch long after the sale is made.

Each year, one out of every five businesses that sell for under $1 million in the “main street” business sector changes hands. For example, Robert and Thelma Jackson purchased R&R Well and Pump in Greeley through We R Business Brokers, then sold it through the Woolworths again five years later.

Marcie Woolworth notes that business brokerage is a specialized field that requires specialized research. Active members of the International Business Brokers Association, the Woolworths contribute to the IBBA’s collaborative database and stay abreast of current industry values.

“Just as realtors use comps (for home valuations), business appraisers use the information in our searchable database to see how similar businesses are priced,´ said Adam Manson, financial analyst for Business Valuation Resources. “There are 88 different fields to determine how similar businesses are. Searches can be narrowed down by industry, size, revenue range, profitability … we always leave confidential information pertaining to the transaction out of the info to maintain confidentiality.”

The Woolworths are also members of the Colorado Association of Business Intermediaries. Marcie Woolworth has received her Certified Business Intermediary designation and was recently named a Fellow of the IBBA. She is also a member of M&A Source, a nonprofit professional organization for middle-market business intermediaries.

“There are so few of us in the state of Colorado,” she said. “We recognize and respect those who have worked hard in our industry to make it better for everyone involved.”

Bank loans still tight

An important aspect of a business broker’s service is helping buyers secure financing. When Gene Prather was looking to buy a business after leaving the world of high tech, he said he looked into 40 different ones. “I did due diligence on five of them before settling on Pro Moving and Storage,” he recalled, adding that securing funding was the most challenging aspect of the transaction.

“Marcie and Ron provided all the data required to secure a small business loan,” he said.

Even though Prather chose alternative financing, the Woolworths helped the rest of the deal move along smoothly.

Although bank loans are presently tight, Marcie Woolworth said she hopes that between Small Business Administration loans and seller carrybacks, financing options will continue to improve.

“Every deal is different,” Ron Woolworth said. “Each has a unique set of details and issues that must be addressed. Between us, we get it done.”

Julie and Lindsay Heyer, owners of Greeley Tent & Awning, had never run a business before they found We R Business Brokers on the Internet.

“We were ready to do something different … decided to go for it,” Julie said.

Although the paperwork was overwhelming at times, Julie gives the Woolworths credit for excellent explanations and clear communication. “They make it personal and they follow through from the first contact until you find something you want,” she said. “They still call to ask how we’re doing.”

One key to the success of We R Business Brokers is the complementary skills of the owners. Ron says Marcie is the detail person and he likes to talk, and he knows sometimes you have to be forward about it or the deal might collapse.

“I am not afraid to ask if the client is ready to make an offer today,” he said. “I just ask if they’ve brought their check.”