Would You Be Thrilled If You Could Sell Your Business

[Nickrosis]

If you could sell your business tomorrow for its fair market value, leaving you with the option to continue to work there or elsewhere in arboriculture in a similar capacity or to take the money and do anything...

Would you sell?

If yes, why? And if yes, why not sell it now? Personally, selling a business is not a desirable prospect since it takes effort and can seem disloyal. If someone walked in the door with a check in hand like my example, it seems like it would make a huge difference.

If not, why? Do you have a particular attachment to your customers and employees or the business itself? Do you feel like there are certain things you want to achieve or finish before you would consider selling? A certain size or value even?

Since I'm asking, it's only fair for me to answer. Ever since I heard the phrase, I've long bought into the principle of "running your business like you're going to sell it tomorrow" since it does discipline you to think outside of yourself, to document what you're doing, and to share your duties and responsiblities with others so that if you were to leave, even if you were to die suddenly, everything you've worked for will continue on. Aside from that, the financial prospect of being able to sell if offered to can be huge since it gives you a bargaining position.

Most owners have considered offers, even if they were just casual. So what makes those different from my example? Even if you don't reply, I think it's a healthy rhetorical question to consider.

 

[a_lopa]

id sell up with no hesitation if the $$were reasonable

 

[jp hallman]

No,

 

[ROLLACOSTA]

I'm with Aussie show me the money and you or anyone can have my business..

 

[ASD]

for the right $$$$$$$$$$ every thing is for sale!!!!!!!!!!!!!

 

[RandyS]

About 16 years ago I bought another mowing business. 15 years ago I sold out. I had had it with the customers not being what I thought they should be. We live about an hour from New York City and we are a big weekend home place. They would bring their attitudes with them.
After 3 years I came back and started over and made several promises. The most important one was to work for a better clientel. That doesn't mean more moneyed, it means nicer. I still hold to that today. We work hard, it might as well be fun.
Long was of saying that no, I probably wouldn't sell today. Having too much fun. That and I need to make sure my young partner will be OK on his own.

 

[rich_h]

I recently sold, or more accurately broke even on my 5 year old commercial tree company. The reasons for selling where many, including:

outrageous workers comp (was in group plan, but still quite high)
unbelievable fuel costs ( good old 8 gallons to the mile lol)
employee issues (finding and keeping quality help)
non level playing field (number one gripe)

The main issue I had was the fact that my small company spent a lot of money and time in training, equipping, and having benfits for my employees. We were a productive, professional, and happy crew. I had no qualms about spending this kind of money as I got great returns in the quality of employees that I could attract and retain. But due to the fact that I spent money on my crew, paid my workers comp, paid my sales tax, had the proper insurance ( $1,000,000.00) , owned newer equipment, and generally spent the time to provide proper tree care...... my prices were quite expensive.

This in its own right would not be a problem, however, as my local authorities would do nothing to help in curbing the uninsured, pay in cash, not always but usually hack companies, it became very difficult to justify the time and money I was putting in run a professional company. Don't get me wrong, we never lacked for work with our higher prices. The quality of our work ensured a ton of repeat business and we continued to grow yearly, but,
the fact that I was paying higher workers comp rates to pay for the injuries suffered by companies that were not insured was really starting to aggravate me. The fact that had I never reported to the sales tax board, they never would have known that I existed and therfore could have avoided paying them entirely (like most cash based companies). Essentially, the fact that I was running a professional, legitimate, and legal business was basically like shooting myself in the foot.

I thoroughly enjoyed owning my company. Putting in half days (just a joke, by half i mean 12 hours at the very least) was a pleasure due to the fact that I was able to control the quality and attitude of the company. I absolutely enjoyed dealing with the clients and all that that entails. The only problem I had was the fact that I was not playing on a level playing field. As I began to realize that this would never change and at any point one accident could basiccally destroy everything that I had worked for (even with being insured to the gills) I decided the risk was no longer worth it.

Often I regret my decision, but for the most part I am glad I got out while I had the chance. I have less stress now, I actually receive a paycheck (man, what a concept), and I am able to pursue many things that I would never have had the time to do before. I just wish that things would have been more equitable. I would gladly have kept the company if I wasnt being penalized for doing things properly and legally.

 

[darkstar]

sob

Im totally in the same place as you were befor you sold and it sux .Several of my main competitors do not withhold or pay WC on their subs , whom by deffination are employees. Im trying to make it and doing ok paying the bills etc. we even purchased out right in cash 49000 last year. Still the underhanded competition is killing me as is the WC bill . NEVER MIND the sales tax, insurance etc. :angry2: Dark

 

[Leaf Man]

Need some advice

Hey everybody,
Stumbeled upon this site and its the first time I've ever posted anything. I recently purchased an existing tree care company and am going it on my own. Trying to be legit is not easy or cheap, but whatever its only money.Hoping my wife will still love me as I am very preoccupied with much. Any helpful tidbits would be appreciated. Look forward to hear from you.

 

[Nickrosis]

Any helpful tidbits would be appreciated. Look forward to hear from you.

Definitely. Welcome to ArboristSite. Read first, then ask lots of questions!

 

[Jumper]

My boss is trying to sell his company for the reasons rich_h stated, plus people in his location just do not want to pay for quality tree care as every country yokel and his second cousin have a chainsaw, and can do it for next to nothing, supposedly. Sad commentary when we can make more money in a couple of days here in Toronto than he makes in a week out there. He keeps asking me if I want it....no thanks.

RandyS, people from NYC with attitudes? Never heard of such a thing, given Toronto is the centre of the universe according to some here!

 

[TreeLady]

This in its own right would not be a problem, however, as my local authorities would do nothing to help in curbing the uninsured, pay in cash, not always but usually hack companies, it became very difficult to justify the time and money I was putting in run a professional company. Don't get me wrong, we never lacked for work with our higher prices. The quality of our work ensured a ton of repeat business and we continued to grow yearly, but,
the fact that I was paying higher workers comp rates to pay for the injuries suffered by companies that were not insured was really starting to aggravate me. The fact that had I never reported to the sales tax board, they never would have known that I existed and therfore could have avoided paying them entirely (like most cash based companies). Essentially, the fact that I was running a professional, legitimate, and legal business was basically like shooting myself in the foot.

You took the words out of my mouth!! The thing that sucks the most about Ohio is no licensing for tree care. You have to have a license to paint some ones nails, but cut down a 75 ft. tree right next to a house...any guy with a truck and a saw can call himself an arborist and put a bid in. There are just tons of doorknockers, toppers, hackers and no name (no PPE) crews out around here right now. On Monday some no name crew dropped a tree on a bystander, it was on the news. I get calls every month from people ripped off by the doorknockers. I want to go to my State Rep and see if they can pass a bill to change the laws and require licensing. This eab thing is only going to make the problem worse.

 

[BlueRidgeMark]

Hmmm. Cross reference this with the "side work" thread. Very interesting.

 

[Steve-Maine]

I recently sold my tree service to a large local company. I don't miss the business. I do miss all the great customers I had. I had been in business for 41 years and was 63 when I sold the business. Now I buy used brush chippers and rebuild and sell them. I do this when i want to not have to.
It seems nice to be able to take time off when you want. With the business it was a 24-7 job.

 

[Nickrosis]

It seems nice to be able to take time off when you want. With the business it was a 24-7 job.

That's a really good point.

I'm on vacation for 8+ weeks a year, so our business has to be structured for me to be gone. Really, it isn't that much time to be gone in hindsight, and I work a lot more when I'm back (yes, 100 hrs/week sometimes). The critical thing is that being an owner or an operator or an owner/operator does not mean you have to be the critical person. In fact, having a or being the critical person is the BIGGEST weakness to have in a business!

It lowers the value of the company if you have to be there to run it. If the company would stop working if you're gone for a while, sooner or later, the company will stop running because you will have to leave. Either transition into a structure that shares the responsibility amongst a number of people, or bite the bullet in value or longevity.

This becomes even more clear in light of succession. Read Good to Great for the best explanation I've ever found. It analyzes companies that were good to begin with, became great, and stayed great. The leaders of these companies weren't Jack Welches where the company revolved around them. They were Corky Walgreenses of the world where the company was successful with them and after them because the success template was written into the company, not the CEOs or owners.

It's a model worth carrying into the tree care business. A successful business is one that goes on without you, a tough pill to swallow for some people. But you can take even more pride in your company when you can walk away for a vacation and come back knowing that it's just a little bit better than before you left. That's where I want to be. That's what I want to be able to say.

 

[TreeLady]

But you can take even more pride in your company when you can walk away for a vacation and come back knowing that it's just a little bit better than before you left. That's where I want to be. That's what I want to be able to say.

I totally agree. We arn't there yet, but are working toward that goal as well. (I have yet to have a vacation during the busy season.) Alot of people start business just tring to give themselves a job. The E-Myth is another great book that explains why this mindset won't work for the long haul.