The views expressed in Guest Opinions represent only those of the author and are in no way endorsed by Richmond BizSense or any BizSense staff member.
I have recently found myself thinking about how my business – Midas of Richmond – will continue without me at the helm. Unfortunately, I have no children to carry on our efforts, so the choice becomes one of accepting the highest bid or creating an alternative that might be better for all parties concerned.
Don’t get me wrong: I don’t plan on going anywhere soon. I am 47, and I easily see another 10 years of managing the day to day, just like I do now. But I do believe in the need to plan, and lately I’ve realized how much more there is to plan than just the transaction.
Let me tell you about an alternative that seems like a win-win-win: A win that maintains the legacy of support we are creating for the Central Virginia Foodbank, the Virginia Blood Service and various other community groups. A win for the folks who would assume ownership of the stores, my employees, for it might be the only way they could get an opportunity like this. And, lastly, a win for the communities that have taken such good care of us over the years, as we would continue to give back like we always have.
My best option is to sell the company to four employees.
Nothing else really makes to me. These are folks who have chosen to be a part of what we do. They have spent years growing into their roles while supporting all of our community programs and initiatives. I can also rest easy knowing, within reason, that these folks should be set for the long term.
Selling the business to my employees will require some foresight. A share of the earnings generated by the stores gets put in to a holding account to be used as the down payment. This allows each of these folks to create their own down payment by simply doing what they already do. It also overcomes one of the biggest hurdles they might face: coming up with $75,000 to $150,000 dollars or more.
Financing for this approach is a challenge and an opportunity. Any commercial lending institution needs to see a personal financial statement that deems these folks credit worthy. Each of these same borrowers has created his or her own success equation with a down payment sufficient to cover 25 of 30 percent of the loan. Although there are still risks here, I think there are also any number of rewards.
So the architecture has been created, the infrastructure built and the plans shared to create group awareness. Out of that awareness comes the support and ultimate engagement that makes any idea a long-term means to an end. My experience has been that people read these things, nod, and say, “I get it.” When this happens, I ask them to explain it to me, in detail, and often we get stuck there.
The onus is, clearly, on me. I need to find four folks who get this to a degree that allows all things Midas of Richmond — the blood drives, the food bank support, the delivery of backpacks — to continue. Therein lies the importance of not only understanding a business’s state of affairs, but also believing in it as the absolute means to an end.
The views expressed in Guest Opinions represent only those of the author and are in no way endorsed by Richmond BizSense or any BizSense staff member.
I have recently found myself thinking about how my business – Midas of Richmond – will continue without me at the helm. Unfortunately, I have no children to carry on our efforts, so the choice becomes one of accepting the highest bid or creating an alternative that might be better for all parties concerned.
Don’t get me wrong: I don’t plan on going anywhere soon. I am 47, and I easily see another 10 years of managing the day to day, just like I do now. But I do believe in the need to plan, and lately I’ve realized how much more there is to plan than just the transaction.
Let me tell you about an alternative that seems like a win-win-win: A win that maintains the legacy of support we are creating for the Central Virginia Foodbank, the Virginia Blood Service and various other community groups. A win for the folks who would assume ownership of the stores, my employees, for it might be the only way they could get an opportunity like this. And, lastly, a win for the communities that have taken such good care of us over the years, as we would continue to give back like we always have.
My best option is to sell the company to four employees.
Nothing else really makes to me. These are folks who have chosen to be a part of what we do. They have spent years growing into their roles while supporting all of our community programs and initiatives. I can also rest easy knowing, within reason, that these folks should be set for the long term.
Selling the business to my employees will require some foresight. A share of the earnings generated by the stores gets put in to a holding account to be used as the down payment. This allows each of these folks to create their own down payment by simply doing what they already do. It also overcomes one of the biggest hurdles they might face: coming up with $75,000 to $150,000 dollars or more.
Financing for this approach is a challenge and an opportunity. Any commercial lending institution needs to see a personal financial statement that deems these folks credit worthy. Each of these same borrowers has created his or her own success equation with a down payment sufficient to cover 25 of 30 percent of the loan. Although there are still risks here, I think there are also any number of rewards.
So the architecture has been created, the infrastructure built and the plans shared to create group awareness. Out of that awareness comes the support and ultimate engagement that makes any idea a long-term means to an end. My experience has been that people read these things, nod, and say, “I get it.” When this happens, I ask them to explain it to me, in detail, and often we get stuck there.
The onus is, clearly, on me. I need to find four folks who get this to a degree that allows all things Midas of Richmond — the blood drives, the food bank support, the delivery of backpacks — to continue. Therein lies the importance of not only understanding a business’s state of affairs, but also believing in it as the absolute means to an end.
I like to patronize businesses with these values. Thank you for the inspiration Mr. Smith.
I like Mark’s concept. My only question, and one that only Mark is capable of answering, is whether or not the business can support four owners.
Maybe I’m just terribly cynical, but this seems too close to a promotional piece to pass as sound journalism.
Thanks, Cindy — btw, it’s Mark if you don’t mind.
Brian — great point
It has been my experience that owning a single franchise of anything can easily become a scenario within which one has bought her/himself a job. That being said a large volume unit can provide a reasonably attractive income.
The key point I had hoped to make was that 25 year old kids today, do not, in my opnion, have long term career opportunities that I did. Non-traditional planning has to come into the mix.
I can be reached at [email protected], if you have any more thoughts.
I applaud Mark’s instincts and insights – what he’s offering his employees is an opportunity to widen their economic prospects far beyond an annual raise, or a promotion. He needs to make sure that the four employees he’s planning to sell to get outside some good business & financial management education to ensure that they can take full advantage of their transition to entrepreneurship. I’ve been saying for close to a decade that we’re in a post-job economy: goodbye “job”, hello “daily value delivery”. This may sound simplistic, but it takes a pretty big mentality shift to recognize that you,… Read more »
Mr. Smith, I am happy to see a leader with your values and hope that you have an opportunity to follow through with this plan. However, I hope that you enlist a few people you trust to help advise your employees in the intricacies of owning and running a business and consider putting your business in a trust during the transition period. Sudden ownership shared by a group of people can result in discord that, while acceptable among employees, is not a tolerable partnership arrangement. A transition can allow for adjustment to this ownership and the ability to learn on… Read more »
Mark, We’ve applied a similar succession plan for 3 of our Apple Door stores around the state with much success. All were long term, well deserving employees with entrepreneurial spirits. It’s been 10 years since we sold the first store and it has been a win-win. All three stores have carried on with the culture they “grew up with” here in Richmond in my store. At some point we’ll follow the same plan here in Richmond. Of course I’m still around whenever they need help or guidance but as time has passed they need that less and less. I am… Read more »