Summary:
Jim Cumbee and Adah Fitzgerald talk about the very unusual circumstances in which she came about buying Main Street Books. It is a delight to listen to Jim walk Adah through her journey of buying a book store in the heart of one of America’s quaintest towns.
Main Questions Asked:
- Did you ever think that you would be a business owner?
- How long had the business been established?
- How did you find out about the sale of the business?
- Do you know how unusual that is for a business to announce in the newspaper that it is for sale?
- Did the store put a price in the paper?
- When you signed the NDA, did they ask you to present your ability to be able to close?
- How did you think about the price, how did you know it was the right price?
- Banks have a hard time loaning against good will and reputation.
- Were the financial statements in good shape?
- What did you do once you received the financials and the price?
- Were you the only bidder?
- Was the deposit refundable or nonrefundable?
- How much time did it take from when you saw the ad in the newspaper to closing?
- Have you talked about an exit from your business or will you think about that sometime later?
- Every business owner will tell you that planning your exit will let you be open to opportunities?
- Planning your exit in advance goes a long way to making the point of exit not become acrimonious with family and friends involved in the business.
- Is your friend an investor or a partner?
Key Points made:
- My family is full of entrepreneurs. In my adult life we had tossed around this idea of having a main street shop. (2:32)
- The business was established in 1987. (3:39)
- The company posted a news release that they were for sale. (4:26)
- The store did not initially post a price, they just invited people into the store to sign an NDA and talk about the business. (5:50)
- The store had so many inquiries about their sale that they eventually posted the price in the paper. (6:04)
- I signed the agreement and received the information. (7:20)
- It was emotional and irrational. We just felt like it was something that we could probably do, and then began to understand if it was a good value, then we tried to get a sense of the negotiating ability. (8:25)
- The value was in the establishment, not the contents. (8:59)
- Yes, the financials were pretty sound, perhaps it could be have been better, but it was solid. (10:08)
- We signed up for a conference that just happened to be happening close to home. (12:20)
- We received some great advice about to proceed with our negotiations. (13:24)
- We put down a deposit and that allowed us to start seriously discussing the sale of the business with them and their attorney. (14:05)
- The deposit was nonrefundable. (14:32)
- We do not have an exit plan. (17:30)
- We both (Adah and her friend) share the decisions. (20:33)
Resources Mentioned:
www.mainstreetbooksdavidson.com
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Tennessee Valley Group
Jim Cumbee established Tennessee Valley Group to help business owners fulfill their dreams for life after business ownership.
It’s a mission that his 30+ year career history had prepared him well for—in addition to being an attorney, transition mediator and business broker, Jim has been a buyer, seller, and entrepreneur. His broad range of experience gives him unique insight into how business buyers and sellers can achieve their goals.
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