“As long as I can remember, ever since I was a kid, I always wanted to be my own boss,” was the remark made by new business owner Dallas Griswold when asked what had made him decide to buy his own business. Nothing can better define the entrepreneurial spirit than that simple response, which really tells the whole story. Dallas, age 31, purchased Berney’s Tire Service in Albany, GA, earlier this year. The accompanying photo portraying the pure joy of Dallas, his wife Allison, and their daughter Jaylee was posted on the company’s Facebook page the day of the closing.
Dallas saw the online business listing for Berney’s Tire Service on BizBuySell, which is the Internet’s largest business-for-sale marketplace.
Young Entrepreneur Wants Exit from Corporate Culture
“I had been seriously looking for a business opportunity for about a year and a half,” Dallas recalled. “I had looked closely at three businesses, but was not satisfied with what I saw in their financials. After I received my college degree in business, I had gone to work in the manufacturing sector and had worked my way up into a supervisory position of about a hundred production workers, but I found that corporate climate to be unfulfilling. My strong desire to control my own destiny drove me to keep looking. Berney’s Tire Service, in addition to being geographically convenient, was able to show me the key financial indicators I was seeking. The business was turning a profit and providing a cash flow upon which I could support my family. The auto service industry interested me … my grandfather owned a shop and I grew up with a lifelong love of cars and racing.”
Berney’s Tire Service is a well-established independent tire and automotive service center owned and operated by Robert and Brenda Galloway since its founding in 1985. The well-maintained and state-of-the-art shop is 7,160 square feet with 10 service bays and five lifts. Its reputation for honesty and efficient customer service for three decades has resulted in a loyal consumer base and consistently solid financials. The Galloways were proud to serve the Albany community for nearly 30 years and, in seeking retirement, sought an energetic entrepreneur who wanted to continue the tradition of quality customer service and reap the rewards from the further growth of the business.
“Upon meeting Bob and Brenda Galloway, I realized that we shared common values on how business should be conducted. Over the years, they have made a name for themselves being the best in town. They have always gone the extra mile past their competition to ensure their customers are satisfied. That was very important to me, and it’s a legacy I want to continue,” Dallas said.
In addition to its online marketplace, BizBuySell also publishes an Insight Report, a nationally recognized economic indicator that tracks the health of the U.S. small-business economy. Each quarter, BizBuySell analyzes sales and listing prices of small businesses across the U.S. based on approximately 45,000 businesses for sale and those that recently sold. BizBuySell’s Fourth Quarter 2015 Insight Report shows that while the number of businesses that changed hands decreased slightly, key financial indicators reached all-time highs, indicating a healthy, more balanced market.
The Insight Report also concluded that part of the reason transaction activity stabilized in 2015 may be that small businesses continue to grow financially healthier, allowing owners to ask for more money, creating a more balanced market.
Closing the Deal
Once Dallas had found a business upon which he wanted to make an offer, the next step was acquiring the necessary funding. “Allison and I were able to work with Wells Fargo Bank to approve a SBA-guaranteed loan for the purchase,” Dallas said. “Although that required a seemingly unending stream of paperwork, obtaining that loan was worth the effort.” Guardian Properties, a licensed broker based in Atlanta, represented Robert and Brenda Galloway in the real estate and business asset sale.
In order to provide a smooth transition to Dallas, the Galloways have provided ongoing training and support, which Dallas has noted has been pivotal in his education
“They are just great people, and I can’t think of a better way to describe them,” Dallas said. “I fully understand their emotional attachment to a thriving business which they owned for nearly 30 years and their desire to ensure it continues successfully. The Good Lord willing, by hard work and staying focused, I will be able to follow in their footsteps.”
The Insight Report forecasts that as baby boomers continue to reach retirement age in significant numbers, and more owners notice the higher sales prices their peers are receiving, the more likely it is that the supply of business listings will stay strong in 2016. In fact, the number of businesses listed in Q4 2015 also rose 3% over the prior year, compared to 1% growth in Q4 2014. At the same time, buyers are finding increased financing opportunities and will be more eager to purchase a business with consistently increasing financials. In fact, of businesses listed for sale in Q4 2015, both median revenue and cash flow improved compared to the same period the year before.
This is important to note for sellers as well because, not surprisingly, 2015 data shows that the higher financial performance an owner could demonstrate, the higher the value they could receive upon exit. Businesses with a cash flow under $100,000, for example, received a sale price multiple of cash flow around 1.97, while those in the $100,000 to $300,000 range received 2.28 times cash flow. Moreover, businesses showing between $300,000 and $500,000 received a 2.81 multiple. This emphasizes how important it is for small-business owners to improve profitability as they move closer to listing their businesses for sale.