The Firm March/April/May 2017

Practice Makes Perfect

DR. WILSON ACQUIRES CLINIC PG. 8

Corporate Colleagues Join Forces BUSINESS PARTNERS COME IN MANY FORMS PG. 13

Omaha’s Networking Queen SCHRAGE SHARES GOOD HABITS PG. 6

A Publication of The Firm Business Brokerage

Spring 2017

BUYER POWER EDITION

Business owners, CEOs and company presidents.

You don’t need to lead alone – Join Vistage!

Volume 1 Issue 11 Published by The Firm Business Brokerage President/Editor • Cortney Sells Director/Assistant Editor • Cassandra Powers

Call Omaha Chair Rick Faber at 402-659-3321 or email at rick.faber@vistage.com

www.vistage.com

In-House Legal Counsel • Susanne Miller In-House Accountant • Cassandra Waltrip Brokerage Principal • Rene Rademacher Director of Strategic Development • Liz Jones Research Analyst • Seth Balke Outreach Coordinator • Jordan Burt Outreach Coordinator • Tina McGill Outreach Coordinator • LeAnn Moore Outreach Coordinator • McKenna Thorngren Office Associate • Adam Jaime Portfolio Officer • Maureen Tierney

Design • OBI Creative

Always Local, Always Beautiful

Contributing Writers • Franny Batchelder, Kathy Rygg, Jennifer Ratner, Maureen Tierney, Michelle Schrage Photography by Bill Sitzmann

To Subscribe: The Firm Business Brokerage info@TheFirmB2B.com 210 N. 78 St. Omaha, NE 68114 402.998.5288 Advertising Inquiries: 402.884.2000 todd@omahamagazine.com

2

The Firm Deal Review

Spring 2017

A Publication of The Firm Business Brokerage

The Bottom Line

Practice Makes Perfect Dr. Wilson Acquires Clinic Special Section

Features

7 Take Our Hand

The Firm Business Brokerage has over

Questions Every 4 Four Buyer Should Ask

$90 million in assets under management

of current cash flowing businesses for sale—from contracting companies to professional service businesses, to medical-based practices.

Knowing Why You Want to Own a Business and What to Look for

8 A Dentist’s Dream Come True

Preparing on 11 Networth: the Homefront

Chris and Franny Batchelder Provide

Clean Title & Escrow Becomes Clear

Guiding Clients 14 Negotiated: Through Common Traps

Title & Abstract

Jennifer Rattner Gives Her Insight

Business Partners Come in Many Forms

Maureen Tierney

president/editor

Michelle Schrage Shares “How-To’s”

Dr. Heather Wilson Becomes Owner

Colleagues 13 Corporate Join Forces

by Cortney Sells

You Networking or 6 Are “Notworking”?

12 Keeping it Local

Sells Insights

Columns

What makes a Buyer tick?

T

Tips for Preparation

Impact: Choosing 15 Executive the Right Kind of Broker

h i s i s s u e w e e x p l o r e different stopping point in our lives, the motivation behind busi- and so we must approach our desire ness acquisition. for ownership in different ways. Maybe you are burned out and need a change, Most of us have held a regular 9-toor perhaps you have had enough of 5 job, and, unless you’re kidding being someone’s go-to person. You yourself, you’ve thought at one time want to move on, and you want to do or another, “I can do this better.” so as the boss. Calm your nagging fears Better could mean a myriad of by buying an existing business and things. Perhaps you have a better stamping it with your ideas and vision. take on a process, a better product, or a better way to structure your If you are coming to this decision life. Whatever your reason, “better” with a substantial personal portfolio, nearly always means “more.” ownership is less likely about quitting There is not one universal reason a mind-numbing day job and more to buy a business, just like there is about investing in and planning your no perfect time. Each of us are at a next chapter. Perhaps you would like

to leave something for your children, either as an inheritance or a legacy. Or, perhaps you want to dig your hands into business without the hassle of starting from scratch. You would like a bit of fun during retirement, and you do not want to leave your money to the wishy-washy nature of the stock exchange. Whatever your reason, own it. THE FIRM

Spring 2017

The Firm Deal Review

3

A Publication of The Firm Business Brokerage

Four Questions Every Buyer Should Ask:

Knowing Why You Want to Own a Business and What to Look for written by Maureen Tierney

“I WANT TO BUY WHAT I CAN AFFORD RIGHT NOW AND THEN GROW IT TO STRATEGICALLY BUY A COMPLIMENTARY BUSINESS.” - Jody Baker

N

ot everyone can handle the risk of starting a business, but plenty are able to withstand the hurdles of owning an existing one. Knowing that, below are four great questions that every buyer should ask themselves when looking to purchase a business.

4

The Firm Deal Review

Spring 2017

What’s my motivation?

We’ve all had bad days where we don’t only want to throw in the towel on our jobs, but where we consider the alternatives. The old 9-to-5 just isn’t cutting it anymore, and the looming picture of endless monotony is a heavy stone in the stomach. You look up from your desk and realize that many around you are tackling modern Sisyphean conundrums, so you start searching for better options. Perhaps it comes to a pro-con list outlining the best of what can be and the fall you might take trying to achieve something better.

So, naturally, when the cons outweigh the pros, you give up and convince yourself that an office job isn’t really so bad. That’s a perfectly decent decision, but only if you don’t educate yourself first. Jodi, a buyer working with The Firm, has faced this dilemma herself. She’s spent over a decade working corporate jobs, but felt as if something was lacking. Jodi wanted to make the rules and be her own boss and, frankly, to have something of her own.

Like the example above, she started out by casually hunting for businesses that piqued her interest, but that didn’t work.

“You can’t have one foot on each side of the fence, because then you’re not really looking at a business,” she says. You have to make a conscious effort to move from behind the desk and into the boss’s chair. Simply dabbling in looking at business ownership isn’t enough to motivate you to punch ahead. Having a great idea is nothing until you push the buttons to jump start the future.

What are my limits?

Although Jodi is now serious in finding the ideal business for her needs, she is keenly aware of her financial and personal restrictions. Having spent years in an office environment, she has little to no skill sets when it comes to labor-based industries, but she isn’t letting that limit her options. “Looking at a business in an industry where I have no practical knowledge doesn’t scare me, since I know there will be qualified staff in place to do what I can’t,” says Jodi. What’s more important is how a specific business will fit into her daily life. Will it hinder her time with her family, or will it put too much strain on the checkbook? For Jodi, one important restriction is travelling. “I have a fairly young family, so it’s important for me to be nearby as much as possible. I can’t have a business that will require too much travel time,” she says. Personal limitations aside, Jodi has a targeted salary in mind that has immensely helped her in looking at available businesses. Knowing what The Firm has to offer and learning from her broker at The Firm, she’s educated to the point where she knows exactly what she can afford. “I need to be able to earn $120,000 per year after taxes, and I have a 401K that I can pull $50,000 or $60,000 out of for a 10% down payment. Based on those numbers, I know that I can purchase a business priced as high as $500,000 or $600,000.” Sure, she can take more out of her retirement if need be, but it’s more important for her to weigh long-term risk with the short-term. “I want to buy what I can afford now and then grow it to strategically buy a complimentary business,” says Jodi. Little, if anything, can be gained by overextension, when smaller bites can lead to fuller growth down the road.

A Publication of The Firm Business Brokerage

“WHEN I AM LOOKING AT AN ORGANIZATION, I HAVE TO REALIZE THAT THE STAFF WILL BE MINE ONCE THE SELLER LEAVES.” - Jody Baker

What is a deal breaker for me?

Who is my support structure?

Knowing your financial strength is half the battle. Understanding what you’re looking at will win the war. Many businesses and industries go through waves of growth and decline, and Jodi is perfectly aware of that. She’s not afraid to look into why a business may be down one year. “I’ve looked at some ag-based companies and I understand that 2016 numbers are down for most in the ag industry. It was a bad year, so as long as I know the reason behind lower numbers, I’m ok with taking a peek.”

While it’s important to have those around you providing encouragement along this path to ownership, it’s equally important to know who truly supports the business.

Employees are key during transition, as not only do they most likely know more than you about the company or industry, but they will have skill sets you don’t to keep. For Jodi, the staff is almost as important as the numbers. “When I’m looking at an organization, I have to realize that the staff will be mine once the seller leaves. I need them to be well-trained and invested in success,” she says. A company that is too reliant on the owner is dead in the water. You can’t step into someone else’s shoes and expect the same results.

Spend your time and effort on a business where you can lace yourself into it and not have to lace up in your predecessor’s old sneakers.

The other end of the spectrum isn’t always so rosy, either. Some companies see huge growth year after year, but knowing if that growth is simply a bubble is key. “I wouldn’t want to buy a business that keeps growing and seems promising but then fizzles out.” Looking beyond the numbers and learning why they may be up or down can really tell you about a particular industry or company. For Jodi, if the numbers are inconsistent and it’s not clear why, then a business must have a consistent bottom line or the risk is just too high.

Arming yourself with these four questions of knowing why you want to own a business and what could help or hinder that possibility makes searching for a company to own far easier. It will also help alleviate your fears, but it won’t eliminate your risk.

You simply have to decide if the risk of doing the same thing until retirement is better and more satisfying than doing what you want and dream to do. The choice is yours.

THE FIRM

Spring 2017

The Firm Deal Review

5

A Publication of The Firm Business Brokerage

Are You Networking or “Notworking”?

Michelle Schrage Shares “How-To’s”

written by Michelle Schrage

you are prepared with well-thoughtout questions and you ask them with a genuine curiosity to learn about the other person. Try to avoid “yes” or “no” questions, but rather, ask open-ended questions that elicit a thoughtful and personal response.

O

ftentimes I meet two types of people when it comes to “networking” and business—one type says, “Part of my job is that I HAVE to go meet people” and the other type says, “Part of my job is that I GET to go meet people.” Which type are you? Do you genuinely enjoy meeting people, or do you simply recognize its importance and muster through it?

Both types are absolutely okay—but the way we “network” varies based on the way we approach it.

Interacting with other people does not have to be seen as a chore or an unfortunate side effect of entering into a business development role. But it also cannot be seen as simply a fun escape from the workplace. Whether you are an entrepreneur or in a sales role, relationships are what makes things happen. And relationships can only start when we put ourselves out there to meet others.

Knowing people is undoubtedly a valuable commodity—and being known by people is arguably more valuable. So, how does one raise their social capital?

And, more importantly, how does one capitalize on it?

A quote that resonates with me is from Woody Allen, “Eighty percent of life is just showing up.” And that certainly applies when it comes to networking.

Those who can take it to the next level not only show up, but become engaged and are engaging.

I have planned well over 100 networking events over the years, and I have attended twice as many. I have won awards for being involved in the community, and was the 2015 recipient of the Strictly Business Community Distinction Award for Networker of the Year. That makes me wonder—what does it mean to be an effective networker? Is it a natural skill, or is it one that can be coached?

6

The Firm Deal Review

Spring 2017

“IF YOU ARE ENGAGING IN A CONVERSATION, BE PRESENT, ATTENTIVE, AND RESPECTFUL.” -Michelle Schrage Here are some of my keys to effective networking: • Pay attention to your body language.

Smile. Even if you have to force it a little. One of the most effective ways to become approachable to is to have a pleasant look on your face and a welcoming glint in your eye. Keep your shoulders open, your arms separated, and don’t be afraid to lightly touch someone on the elbow or back. Appropriate physical touch can often go a long way in building positive rapport.

• Make eye contact. Even in a busy room, it is imperative to show interest and respect to the person with whom you are speaking. It is easy to get distracted or feel tempted to scan the room in the middle of a conversation, but that is a surefire way to make the other person feel that you are disinterested. If you are engaging in a conversation, be present, attentive, and respectful.

• Ask questions. You should never have to fear an awkward silence if

• Prepare and know what you need to accomplish. The term “networking” can be deemed “notworking” if you are not making progress. Think about a few objectives beforehand: To deepen relationships with people you already know, personally and professionally, to get introduced to people you have not yet met, to find people you can help, to find people who can help you, etc.

Also, attendee lists are often published ahead of time, so do your research.

Decide who you want to meet and plan out how the conversation will go. What action items do you want to propose at the end of your conversation?

• Follow up soon after—connect on LinkedIn and include a personalized message or send an email with your company signature line. One of the most effective strategies for building relationships is to set up a coffee or lunch meeting soon after to get to know one another better and see what assistance you can provide.

• Be genuinely helpful. When others start receiving helpful connections from you, you are positioning yourself as someone worth knowing. That will then help perpetuate additional introductions from your network.

• Go with a wingman. I have accompanied many people to networking events as a source of comfort and support—and quite frankly, sometimes it’s easier to meet people that way. But don’t get stuck in your comfort zone.

We live in an amazing city, and we are surrounded by wonderful, helpful people. I hope you get as excited as I do to go out and meet as many people as you can each and every day! THE FIRM

A Publication of The Firm Business Brokerage

Take Our Hand:

Featured Opportunities for Sale 2-Location Barbecue Franchise with Massive Growth Options PRICE $371,000 OWNER PROFIT $154,385 59 percent growth YOY in a hot new franchise category! This exciting and popular franchise is well supported and growing quickly, with over 500 locations across the U.S. and counting. These two locations are so new that the paint is still drying on the walls, and one of them is in a major shopping area that is still undergoing construction.

Midwest Rigging Contractor Assisting Clients with Machinery Installment, Removal, and Relocation PRICE $ 3,146,000 OWNER PROFIT $843,289 A heavy lifting company serving manufacturing, utility, and machinery industries. This rigging business provides the lifting power necessary to move manufacturing equipment, turbines, printing presses, and much more! With seven different lifts, this company is able to take on a wide range of jobs.

Trendy Bicycle Retail in Council Bluffs with Over $350,000 in Sales PRICE $190,000 OWNER PROFIT $118,068 Perfect location, great sales, and superior bikes. For the past 16 years, Council Bluffs has been lucky to have this bicycle retail and maintenance business, but retirement calls, and more than $350,000 in sales could be yours! The only location in western Iowa selling and servicing a major brand, this company also specializes in boutique selections to guarantee the best style and price for all.

Popular Fitness Franchise in Premium Location PRICE $214,000 OWNER PROFIT $77,949 In business for more than 8 years, this innovative fitness franchise keeps customers coming back by constantly refining its business model and targeting a broad audience in order to make fitness appealing and accessible. Equipped with premium facilities that include a variety of fitness gear, tanning gear, and locker rooms with showers, customers have a wide range of choices about how they desire to include fitness into their lifestyles.

Corporate Sales Training & Consulting

Successful Childcare with Enrichment Focus

PRICE $380,000 SALES $158,781

PRICE $660,000 OWNER PROFIT $195,487

A company that implements corporate sales training programs with a 40 percent profit margin. This well-known company provides sales training primarily to larger, corporate clients, specializing in the senior living industry with a focus on increasing their gross sales.

New and Gently-Used Children’s Resale PRICE $280,000 OWNER PROFIT $132,801 Offering convenient buying and selling options to customers, this reseller of new and gently used children’s items is in a prime location allowing them to buy and sell clothing every day. This location has contributed to over a million dollars in sales year-over-year. This store is currently doing 5 percent new clothing and 95 percent resale.

With increasing gross sales and high profit margin year over year, this stand-alone child care facility serves children from 6 weeks to 12 years old. With an all-inclusive enrichment focus, children are exposed to a variety of available activities including dance, music, art, and off-site field trips. State-approved curriculum is in place.

**Counseling & Residential Re-entry with Federal Grant through June 2018 PRICE $805,000 OWNER PROFIT $230,204 Well-run programs and credentialed staff complement this southeastern Nebraska residential re-entry company showing consistent, seven-figure gross sales. Recently gaining a new $70,000 monthly contract as well as a large federal grant, this business offers 80 percent residential rehabilitation and 20 percent clinical therapy, with clients referred by the State of Nebraska, Federal Bureau of Prisons, and U.S. Pretrial Services.

** Broker’s Choice | 110+ Available Business Opportunities For Sale. Please visit TheFirmBusinessBrokerage.com for details Spring 2017

The Firm Deal Review

7

8

The Firm Deal Review

Spring 2017

A Publication of The Firm Business Brokerage

Practice Makes Perfect

“ALMOST 100 PERCENT OF THE PATIENT BASE HAS REMAINED.” -Dr. Heather Wilson

Dentist Designs Her Ideal Clinic and Fills In Her Future written by Kathy Rygg | photography by Bill Sitzmann

However, owning a dental practice was not something she considered. Instead, after graduating from dental school, Wilson moved to Omaha, and, over the next decade, worked for different group practices.

“I was happy where I was and hadn’t been looking to make a change,” she says.

the patients was smooth, too. Almost 100 percent of the patient base has remained.”

Although Wilson says she initially went into exploring the option to purchase with some skepticism, she says there were many signs showing her to go for it. “It was a leap of faith, but it’s paying off,” she added.

ven at a young age, dentist Dr. Heather Wilson knew she wanted to be in the health care industry someday. As is often the case, her journey along the way was varied. The Kansas native’s fascination with helping others led to health care experiences as early as high school. She worked as a nursing assistant at the county hospital and was able to shadow physicians. While in college at the University of Nebraska-Lincoln, she completed internships with an anesthesiologist, a family physician, and a surgeon, but none of it was as hands-on as she had hoped. Her college counselor suggested she look into dentistry, and after her first time shadowing a dentist, she knew she had finally found the perfect fit.

Sometimes the best opportunities present themselves when we least expect it.

Wilson was approached by The Firm about a dental practice in Millard that was for sale.

She and one of her partners at her existing dental group discussed the possibility of purchasing it together, but it was not the right fit for both. Instead, with the encouragement of her colleague, Wilson decided to purchase the practice on her own. “It seemed like a really good fit for me,” she says. The dentist selling the practice was a woman about Wilson’s age, so the demographics of the patients fit, and it was an ideal size for an individual doctor. It also helped that the Millard location was surrounded by neighborhoods with lots of young families, and the doctor selling the practice was looking to spend more time with her own young children.

That payoff hasn’t been without its struggles. When she first purchased the Walnut Grove practice there was a lot of drive-by traffic due to the office’s location next to a grocery store. Unfortunately, when the store closed three months later, the amount of drive-by traffic drastically dropped. “We felt the impact, and it’s been a struggle because the office isn’t easily visible just from the street,” Wilson says. Since most families use a dentist in their area, Wilson has made sure her office is included on all major insurance provider lists, which has been a primary patient source.

In addition to her interest in health care, Wilson was also a talented artist and had been offered scholarships to attend art school. Working with her hands was something she wanted to continue to do, and “dentistry was a good combination of health care and hands-on work,” she says. “It incorporates all of my loves and everything I’m good at.”

The actual sale of the practice took place quickly, about four months from start to finish. Wilson says The Firm was exceptionally insightful in coordinating all the pieces, and even helped her find a banker for financing.

“The Firm is really organized, to the point where all I had to do was sign the paperwork,” she says. “It was a smooth process, and the transition of being accepted by

The Firm Deal Review Seller’s Representative: McGrath North, Tom Worthington Buyer’s Representative: Jeff Cremers Years in Business: 11+ Patient Base: Over 3,900 Lender: Wells Fargo, Katie Todd

E

She also thought that the office’s digital X-ray system and computer network needed to be updated and replaced. “I wasn’t happy with the quality of images, so I bought the best system available,” she says. A new network was installed, as were new work stations. “Even though it was a big expense, I don’t regret it because I’m able to provide better service and care to my patients.” Wilson also put her artistic talent to good use by redesigning and redecorating the office, making it her own.

Spring 2017

The Firm Deal Review

9

A Publication of The Firm Business Brokerage

Another challenge with purchasing her own practice was that she now had to be in charge of human resource decisions and needed to hire the right team. She found that not everyone was the ideal fit. “Terminating employees is uncomfortable, and I didn’t enjoy doing it, but it taught me a lot about hiring the right people so that you don’t have to go through those changes again down the road,” Wilson says. She now has the right team in place and can focus on growing the practice and dedicating her time to the areas she deems most important.

The first of those areas fall within her immediate goal for 2017: to increase the number of patients she is able to serve.

Her focus will be on internal marketing and encouraging patients to refer family and friends. “We have referral gifts and bonuses, and emphasize how important office visit reviews are for us,” she says. Social media will be another focus for the year. And even though the grocery store closing created a slow-down in business, she says it has been picking back up since the beginning of the year.

Wilson’s five-year plan includes growing the practice to the point where she has enough patients to expand the office.

The location has two unfinished treatment rooms, so there is physical room to grow.

She would like to finish those rooms and bring in another hygienist or associate dentist, but she needs to wait for the numbers to make sense. In the meantime, Wilson is working hard but enjoying her new venture, with no regrets about making the move.

“There’s something really great about owning your own business,” she says. “It’s not always profitable right away, but you have the autonomy to make your own decisions, and it’s such a boost to your self-esteem to see it grow. The most rewarding part is that pride in ownership.”

THE FIRM

10

The Firm Deal Review

Spring 2017

A Publication of The Firm Business Brokerage

Networth: Preparation on the Homefront

Chris and Franny Batchhelder Provide Tips for Preparation written by Franny Batchelder

For most people, their home is their biggest asset. When it comes to buying or selling a business, you need to know your net worth, and that includes knowing the value of your home. Below are some excellent tips for improvements that will make sure your home is top notch, whether you are selling your home or not.

It is beneficial to have knowledge of what it will take, especially when considering one’s entrepreneurial success in looking to upgrade to that dream home.

How important is it to prep your home for sale?

Prepping your home for the market can make the difference between receiving an offer in a day or having your home sit on the market for months. My husband, Chris, and I are a unique team—we not only evaluate the inside of your home, but the outside, too.

Curb appeal – You either have it or you don’t Curb appeal can either make or break someone from entering your home. When driving by, it is the buyer’s first impression of your home. Chris has owned Precise Lawn and Snow, Inc. for nearly 20 years. He has an impeccable eye for what improvements can increase curb appeal and potentially net someone more for his/her home. He has worked with everyone from residential home owners to larger clients in the financial sectors, apartment communities, medical buildings, and food establishments. Our daughter, who has grown up watching her dad interact with clients, has given him the title of “The Nicest Guy On The Planet,” and says, “he never stops smiling.”

Tips for improving exteriors: • Remove chipped paint from garage doors • Switch out house numbers • Freshen mulch • Edge the lawn • Trim and shape hedges • Polish kick plates and door knobs • Rid front porch of any spider webs or bird droppings • Add colorful flower pots to your front porch Can buyers see themselves inside?

Declutter! You’ve heard it time and time again, and it works. We want buyers to be able to see themselves in a potential

home. Therefore, make as much space as possible in which they can do so. Along with removing clutter, de-personalize the space. Remove any personal photos or items specific to you that could prevent buyers from seeing themselves in your home. Other top deterrents are the smell of animals or smoke. These can turn off buyers before they even set both feet inside.

An updated, clean, freshly scented home already places that one ahead of the rest.

The smallest attention to detail can end up netting you more than you anticipated.

Tips for improving interiors: • Make minor repairs • Touch up paint • Make sure all light bulbs are working • Buy a new entry rug • Brighten up all rooms with light • Get a storage unit and clear out unnecessary item Working with a boutique team We have a diverse team of six agents at Elliott Co. Group and 34 percent of our team’s sales are from outside of our team.

In 2016, the team’s production totaled 63.6 million in sales with 170 transactions. Our percentage of sale price to list price was 98.

Since 92 percent of homebuyers start their search by viewing photos of houses online, our team has a professional photographer produce at least 35 high-resolution photos of the interior and exterior of our listings. Our sellers also have the option of a professionally shot and edited video, using drone footage, to assist in our team’s unique marketing efforts.

If you are interested in receiving a complimentary market analysis or more tips for listing your home, you may contact us at: Franny Batchelder franny.batchelder@ elliottomaha.com or 402-980-5568 Chris Batchelder chris.batchelder@ elliottomaha.com or 402-980-5567 THE FIRM Spring 2017

The Firm Deal Review

11

A Publication of The Firm Business Brokerage

The Choice is Clear: Clean Title & Escrow is Now Clear Title & Abstract, LLC Keeping it Locally-Owned and Operated for a Smooth Transition written by Kathy Rygg

E

very piece of land, every business, and every home has a record. It sounds vague, ominous, and a bit like something we should all know about. That might be right, but that knowledge leads to a whole chunk of data and jargon that can make your head spin. Oddly enough, that dizzying drop of documentation is referred to as a title, but it is a vital mix of information disclosing any restrictions or encumbrances on a real estate parcel, and it is a safety net for anyone buying property. Perhaps the house you are looking at has a lien on it from a contractor who was never fully paid for a remodel or addition. Maybe the previous owner of a business has back taxes, or maybe that perfect acre of land is under a legal dispute undisclosed by the seller.

Whatever pertinent information you need to know before closing day is available, but only if you know where to look.

There is an entire industry dedicated to fulfilling the grueling task of searching and compiling title information, and Clear Title & Abstract is one such nugget in the title insurance game. Co-owner Doug Goodman, who purchased Clear Title from Patricia Crabb in October 2016, is a veteran of the lending community. He understands the benefit of buyers having everything at hand, and long gone are the days of handwritten records. Goodman is dedicated to “sustaining existing client relationships in Nebraska and Iowa,” a value shared by Crabb, who began the business in 2002 as Clean Title & Escrow. Goodman is also adding an Omaha office located on P Street.

Crabb has quite a history in the industry.

She began Clean Title as a way of keeping title searches and title insurance services

12

The Firm Deal Review

Spring 2017

local. “Our services are for our customers,” she says, as “there are no affiliations” with larger title companies. Therefore, customer service is imperative, and she and her staff have gone above and beyond to get and keep clients. It is this same work ethic she saw in Goodman and his partner, stating that, “Clean Title and Clear Title were an excellent fit, and I am delighted both will be able to continue to grow and prosper.”

Not just anyone could buy her business and client base, but Goodman and his coowner more than fit the bill, as they have also worked in the title industry for years.

Clear Title & Abstract, whose main office is on West Broadway in Council Bluffs, has records dating back to 1853, making it the oldest and most complete set of records in Iowa. Serving not only Pottawattamie County, but most of southwest Iowa, Goodman and his co-owner can now add Omaha and surrounding communities to its roster. The advantage of acquiring an established title company is the existing staff and their experiences in the community.

Crabb’s staff of four is licensed and trained in writing insurance policies and assisting with escrow closings and refinancing. It was important to Crabb that her crew be able to stay on after her absence, and Goodman was more than obliged to retain all employees. Goodman eagerly noted that,“staff is well-trained and responsive to customer needs, and will continue to focus on providing excellent customer service.”

Above all else, maintaining employee relationships with clients was most important to Goodman during the transition. It was not so much that he and his partner were acquiring a physical business,

MAINTAINING EMPLOYEE RELATIONSHIPS WITH CLIENTS WAS MOST IMPORTANT TO GOODMAN DURING THE TRANSITION but all the goodwill and satisfied clientele that came with it. Yes, it was a strategic purchase, but kudos really remain with the dedication to keeping excellent customer service, and Crabb left a tall order to fill.

Her enthusiasm for clients is palpable as she explains her favorite part of any customer’s experience. “When people come in to buy their dream house, of any value, they are so excited and they leave with a smile on their face,” she notes.

Goodman, who has a reliable, trained staff that includes licensed attorneys on both sides of the river, is up to the challenge and looking forward to working more closely with customers in the Omaha and Council Bluffs market. Clients can rest assured that any title, escrow, and abstract needs will be well met by Clear Title, and that Crabb’s hope for a client-centered, locally-owned business will continue on. Doug Goodman would not have it any other way. THE FIRM

The Firm Deal Review Seller Representative: Cremers CPA Years in Business: 15 Reason for Sale: Retirement Type of Sale: Assets & Acquisition

A Publication of The Firm Business Brokerage

Frozen Yogurt Flavors a Bold Venture

“WE BOTH HAVE ENTREPRENEURIAL SPIRITS AND ALL FOUR OF US BRING A DIVERSE SET OF SKILLS.” -Mark Covey

Corporate Colleagues Join Forces to Invest in Franchise written by Kathy Rygg

B

usiness partners come in many forms.

Sometimes they are a husband and wife, friends, or people who have worked together previously. For the new owners of the Orange Leaf frozen yogurt franchises in Omaha, it is all the above. Mark and Shirley Covey, together with Babu and Neelima Inti, purchased four Orange Leaf locations— three in Omaha and one in Council Bluffs.

Not only are they family friends, but Mark and Babu have a long work history as corporate colleagues.

Mark and Babu met while working within the Information Technology group for Avaya in Omaha. Babu was a business analyst and Mark a software developer; together they developed software programs for all of the company’s business systems. During their 11 years at Avaya, they often talked about going into business together.

“We both have entrepreneurial spirits and all four of us bring a diverse set of skills,” Mark says. His wife, Shirley, has a business background in sales, and Babu’s wife, Neelima, is skilled in project management.

Although they no longer work for the same company, Mark and Babu intend to keep their current corporate positions. When considering business opportunities, they liked the advantages that an existing franchise offers. “We wanted to buy an existing business that was successfully growing,”

Mark says. “We wanted to be involved but have it be a streamlined business where we could monitor progress, improve efficiencies, and have it run smoothly.”

When the franchise first came up for sale, Mark and Babu looked into it but felt the sale price was higher than they were prepared to pay. Six months later, it listed with The Firm at a lower price, and Mark and Babu decided to seriously explore the opportunity. “We had a good understanding of the business from when we had first looked at it,” Mark says. “Both our families liked the product, the locations were good, and it is a market leader for yogurt chains.”

Babu added that they liked the sellers and felt they were selling for the right reasons. “When looking at a business, you look at the people, the product, and the processes,” he explained. “This franchise has good people who’ve been long-term employees, the product is very good, and the processes are all in place—all things that attracted us.” Despite those elements being in place, the purchase process was not without its challenges.

“We’ve never purchased a business before, owned a franchise, or negotiated a lease, so we’ve had, and continue to have, a lot to learn,” Mark says. Purchasing a franchise within the food industry involves additional

knowledge about food preparation and health codes. “Even though you’re diving into things you don’t always know about, you have to be open to new things and can’t be afraid to fail,” he added. The partners plan to spend the first 6 to 12 months working with employees and understanding the various aspects to the business.

Beyond that, much of their longer term goals revolve around creating new opportunities for the business. This includes developing the catering side of Orange Leaf for private events, participating in Taste of Omaha and other public events, and becoming active in local schools, churches, and other organizations. “We’ve both lived in Omaha for a long time and want to be engaged in, and give back to, the community,” Mark says. “Families spend a lot of time in our stores, including our own, so developing a vision that benefits all families is very exciting to us.” THE FIRM

The Firm Deal Review Orange Leaf Lender: First National Bank of Omaha, Jeff Ash Loan Structure: SBA Location: 4 in the Metro Area Offer to Close: 5 months

Spring 2017

The Firm Deal Review

13

Negotiated: Rattner Guides Clients Through Common Traps

Six Common Roadblocks for Unwary Commercial Tenants

written by Jennifer Rattner, partner at Abrahams, Kaslow & Cassman LLP

A

ttorneys play a major part in any business acquisition. A buyer’s counsel will guide them through everything from the purchase agreement to the closing.

Jennifer Rattner of Abrahams, Kaslow & Cassman LLP provides her expert opinion on common traps that she has negotiated on behalf of her clients.

No matter how small a space, or how short a term, a lease can trap even the most seasoned business tenant into unexpected and significant liabilities. Whether you are taking on an existing commercial lease or entering into a new commercial lease, you should be aware of the following common traps when reviewing and negotiating a commercial lease: Maintenance and repair obligations.

Watch out for provisions that impose tenant maintenance and repair obligations that are out of line given the nature of the lease. For example, a three-year tenant should not be obligated to perform maintenance, repair, or replacement of the building’s roof, HVAC, or other systems.

Overly broad indemnity obligations.

Indemnity is an agreement to pay for certain losses and damages suffered by another party. Generally, the tenant’s indemnity obligation should be limited to anything that happens in the premises and anything the tenant and its agents, employees, contractors, and invitees do outside the premises. Make sure that the tenant’s indemnity obligation excludes negligent and willful acts and omissions of the landlord and its agents, employees, other tenants, and contractors.

Re-measurement rights. Landlords often reserve the right to re-measure the premises and/or the building, each of which the tenant should resist. Re-measuring the premises or the building will impact the percentage share of expenses (e.g., common area maintenance fees, taxes, and insurance) the tenant is required to pay each month, since a landlord will only re-measure when it benefits the landlord.

14

The Firm Deal Review

Spring 2017

Subordination without nondisturbance.

Watch out for subordination provisions, which require the tenant to subordinate the lease to an existing or future lender’s lien without a nondisturbance clause. A nondisturbance clause ensures that the lease between the tenant and the landlord will continue under any circumstance (e.g., foreclosure). Unless the lease provides that the tenant’s occupancy will not be disturbed if the landlord’s lender forecloses on the building, the lender will likely have the right to terminate the tenant’s lease. Every tenant should ask for nondisturbance protection.

No or limited cure periods. Default language in a lease may not require the landlord to give notice of a claimed default and may not permit the tenant a period in which to cure the default. A tenant will want both notice and a cure period. For monetary defaults, a reasonable cure period is five

days after notice from the landlord. For non-monetary defaults, the practical ideal is a 30-day cure period after notice from the landlord, with an ability to reasonably extend such period if the tenant is diligently working to cure the default.

Damage penalties. Be careful of overreaching damage penalties. For example, a landlord should not be allowed to recover the full rent, plus a separate amount for any free rent, tenant improvement allowance, or other allowances, all of which are amortized over the lease term and are thus already recovered if the landlord recovers the full rent.

Make sure to hire a knowledgeable attorney to avoid these, and other common traps lurking in commercial leases.

THE FIRM

A Publication of The Firm Business Brokerage

Executive Impact

The Law of Threes—Choosing the Right Kind of Broker written by Maureen Tierney, portfolio officer

W

hen deciding if you want someone who works hard, challenges you, or is the ultimate networker—why not have a hybrid?

It’s easy enough to say, “I want to buy or sell a business.” Just eight simple words, and what seems like the oldest transaction in the world. You have what I want, or I have what you want, so let’s make a deal.

But what comes next is the most important step. The decision to buy or sell is tough enough in itself. After everything is weighed, good against bad, finding the right person to help you achieve your goal is choosing between getting the best price or settling for what comes your way.

When deciding on a broker, you’ll generally come across one of three typical approaches: the “hard worker,” the “challenger,” or the “relationship builder.” All have great qualities, but all are ineffective on their own.

Let’s take a quick look at all three and see which one might be the best to have in your corner, given the option.

“The Hard Worker” We all know the guy or gal who devotes him-or-herself to the sale, doing whatever it is to make you happy and to ensure that a deal is made. The question is, what kind of deal? It’s a matter of knowing how to work smarter instead of harder. His work ethic is an admirable trait, but not always in your best interest. He’s so busy trying to close that he can kill a deal and miss an opportunity by not guiding you to the best choice. Essentially, you’re dealing with a people pleaser. He’ll only present to you what you expect to see, and won’t think beyond that to find a new avenue of business that could perhaps be a more lucrative investment. His goal is persistence even unto the bitter end. He will kick that horse long after it is dead.

“The Challenger” The challenger is the person arm wrestling you and defeating you again and again until you knock his knuckles to the table. He will

push you to your potential and make you use muscles you didn’t know you have. He is the polar opposite of the Hard Worker, thinking and seeing above and beyond what you thought was possible. This guy is the protein powder of the brokerage world, appealing to you with growth but in the end his ideas are overreaching and sometimes overkill. The Challenger may be the ultimate eye-opener, but he is overwhelming and can’t always deliver. In the end, he thrives on the strength of an argument.

The Firm Deal Review Cash Flowing Businesses for Sale: 110 Current Assets Under Management: $94MM 18 Industries Represented

“The Relationship Builder” Here we have the ultimate networker. He or she is going to stick with you through thick and thin. You will be so familiar and so comfortable with them that theirs is the first name that pops into your head. This is a great skill to have and is the bread and butter of business. Connections are what make many deals, but someone focused solely on being a Relationship Builder is not always the best advocate. Someone who is great at making and keeping connections won’t always help at the deal table. A lengthy relationship doesn’t automatically mean you will get your money’s worth. They have the tendency to let the relationship drive a transaction above all else. To them, the dialogue is more important than the strength of the deal.

We have examined each one and found that perhaps none of them are overly satisfactory. On their own they might appeal to polar personalities, but most of us fall in the middle and want more than what each can give. All three have their strengths and weaknesses, leaving you wondering which is the best option. Is it possible to get all three? The simple answer is sure, if you know where to look. The best answer is absolutely, and this is what you will get with The Firm. We bring buyers and sellers to the table, having worked hard to meet their needs and market their business. We challenge them to see the potential in a company they may have overlooked and we coach them until they build their vision.

With each associate at The Firm, you’ll get the ultimate hybrid of these three. If you have ever thought about selling your

business, get it valued sooner rather than later. Knowing your company’s worth is half the battle, and our 20-point system is a proven process to get you your best return on investment. If you’re looking to buy, take advantage of The Firm’s connections in financing and community building. We set you up for success.

Take a breath, pick up the reins, and forge ahead. It is time to make your mark.

Maureen Tierney, portfolio officer and copywriter of Confidential Business Reviews.

THE FIRM

Spring 2017

The Firm Deal Review

15

GOING GREEN

Help Omaha Magazine Fight Deforestation

OMAHA MAGAZINE HAS JOINED AN INNOVATIVE PROGRAM TO COMBAT DEFORESTATION. AND WE NEED YOUR HELP. The initiative, called Print Relief, plants the number of trees equal to our printing needs by calculating the trees consumed by the printing of our magazine. They plant the number of trees equal to our tree usage in endangered forests around the world.

IN THE NEXT YEAR ALONE, THIS INTERNATIONAL PROGRAM WILL ALLOW US TO BE RESPONSIBLE FOR THE PLANTING OF ALMOST 1,500 SAPLINGS IN BIOMES AROUND THE GLOBE THAT HAVE BEEN RAVAGED BY DEFORESTATION.

HERE’S WHERE YOU COME IN: We’d like readers to help

us choose where our trees should go. We will create a survey on our Omaha Magazine Facebook page. You can choose to help reforest Brazil, Mexico, Madagascar, the Dominican Republic, Burkina Faso, or Ethiopia.

We will determine the top vote-getter and pass your wishes on to the folks at PrintReleaf. Then, together, we can help battle one of the greatest threats to the health of this planet.