September/October/November 2014 The Firm Deal Review

Post Labor Day Boom & ITS EFFECTS ON OMAHA PG. 14

Next Chapter JAYE MCCOY’S RISE TO CEO PG. 8

John Perlebach HOW ONE ENTREPENEUR’S ROOTS LED TO SUCCESS PG. 5

THE FIRM BUSINESS BROKERAGE WARRANTS THE INCLUDED INFORMATION HEREIN TO BE TRUE AND ACCURATE

Fall 2014

EXCLUSIVE LISTING EDITION

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The Bottom Line

Her Own Business Jaye McCoy proves it’s never too late to buy your own business.

pg.8

Special Section

Departments

Columns

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5

4

Negotiated

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Net Worth

Fresh Off The Firm There are 75+ opportunities on the selling portfolio such as specialized medical clinics and ground maintenance.

Setting a Trend Buying Nu Trend Dry Cleaners was the right step for budding entrepreneur.

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A Positive Outcome

13

Motorhead to Company Head Andy Oelkers’ life-long love of cars led him to his dream business.

Some things to consider before buying your first business.

Wendy and Barry Richey realize everything happens for a reason.

Construction is taking off again!

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Executive Impact

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Cash Flow

The Post-Labor Day Boom

The Pros and Cons of SBA Lending

Sells Insights

Turning Blueprints into Skyscrapers

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e’ve collaborated with Omaha’s deal-making experts to bring you the most insightful, impactful business transaction content. Whether you are white collar, blue collar, or no collar at all, our mission

is to provide you with professional guidance in the volatile world of mergers and acquisitions. Allow us to lead you through a first-class tour, where daily Omaha’s local entrepreneurs turn their dreams of blueprints into skyscrapers. Where company revenue size is relative to the business owner’s constant struggle of profit margins and cash flow. Let us take you closer to the deal-making world that is happening right outside your front door. The FIRM

by Cortney Sells president/editor

Fall 2014

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Negotiated:

The Weitz Company’s construction is taking off again! written by Chris Harrison, President of The Weitz Company

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verywhere you look the scrapers and cranes are moving in next door to your home and your office.

Guys like me in the commercial construction business love it as it’s been several long years coming to get our businesses jump-started again!

With all of this new activity around us it might be time to make a move to either sell or buy a construction product or subcontracting type business. Right now, the future looks bright.

In all seriousness, it feels and looks like the residential and commercial construction markets are booming again in Oma-

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ha and the surrounding areas. If you look around, many businesses, developers, and institutions are either in the middle of construction or are working with designers planning expansions, renovations, or new buildings altogether.

ucated work force, low cost of living, great schools, lower cost labor, and a favorable business climate. This will continue to attract new businesses and people to our great state, thus fueling the design and construction market.

The University of Nebraska system has numerous projects lined up as does the University of Nebraska Medical Center, Metro Community College, and many other higher education institutions. Many of Nebraska’s K-12 schools are or will be going through renovations, additions, and repurposes now and in the future— for many years to come.

I’m not the “buy and sell” type business magnate, just a simple guy growing a commercial construction business here in town. But I remain very optimistic that as Omaha grows, businesses in the construction world will also grow. So maybe, if you’ve always wanted to own your own small business related to construction, now may be the time! The FIRM

Data Centers and other large companies continue to be attracted to Omaha, which is located in the center of our nation logistically with great resources such as an ed-

Setting a Trend

Buying Nu Trend Dry Cleaners was the right step for a budding entrepreneur. written by Anthony Flott • photos by Keith Binder

Amy Anzalone, Jeff Lovely, John Perlebach

The Deal Review Days on the Market: 52 Law Firms: Abrahams Kaslow & Cassman and Douglas W. Ruge & Associates Reason for Sale: Seller’s father passed away Number of Locations: 7 Purchase Price: $740,000 Year Established: 1986

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ohn Perlebach has always believed in working hard.

In high school, he ran his own snow removal business. He worked at nursing homes his family operated. In college he sold jet skis, four-wheelers, and other fun rides at a family-owned sports store. After college he chose to pursue something different from the family business and moved to a different industry: gas stations. That choice eventually brought him to his current position directing acquisitions for Buchanan Energy, a family-owned and operated chain of 200 convenience stores and gas stations that Steve Buchanan began from a single outlet in Omaha.

In addition to his position with Buchanan Energy, Perlebach now runs his own business, having purchased Omaha’s Nu Trend Dry Cleaners in March.

“I kind of knew what I was getting into,” says Perlebach, 33. “I’ve been around small business all my life. Working with Steve Buchanan has been another experience that kind of led me to know a lot about small business.”

Now he’s getting to know a lot about the laundry business. Nu Trend features six locations, maintains a plant which launders over 500,000 pieces of clothing per year, and offers delivery service to its customers.

With over $1.9 million in sales in 2013, it appealed to Perlebach as a recession-resistant business. And, he said, the previous owner “had kind of a well-oiled machine put together.”

Previous owner Michael McKernan actually didn’t have any intention of turning over that well-oiled machine to another owner.

His father, Tom McKernan, started the company with a single location in 1986. When he died nine years ago, the reins fell to his son. Wanting the business to continue, he made the decision to operate it with his mother, wife, and cousin.

Competitors had often inquired about purchasing Nu Trend, but McKernan always refused. But, nearly a decade after assuming his role, McKernan was ready to focus more on the company he founded in 2009, Dynamic Equipment and Consulting.

After much thought, in December 2013 he was ready to sell and Perlebach was ready to buy.

“It was one of those offers hard to refuse,” McKernan says. “The most difficult thing was taking care of the employees that were with us for a long time. We had employees with us for 25 years. Finding the right fit that the new owner would keep them aboard and let them finish their career was probably the hardest decision. This owner has been willing to do that, and so it made things really a lot easier.”

And it all happened in about 90 days.

McKernan was impressed with the services provided by the professionals of The Firm Business Brokerage who facilitated the transition. “They’re very professional and the way they expedite things, there’s no messing around,” McKernan says. “They say what they’re going to do and it’s done.”

The FIRM

Fall 2014

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A Positive Outcome

Wendy and Barry Richey realize everything happens for a reason. written by Connie Barker • photo by Bill Sitzmann

Wendy as Zurlos was being presented and she said “I should buy that!” Everyone agreed it would be a great fit and a buyer/ seller meeting soon ensued.

Zurlo’s general manager Richard Mach, head chef Vicky Schwartz, and owner Wendy Richey.

The Deal Review Law Firms: Koley Jessen and Brodkey, Peebles, Belmont, & Line Deal Challenge: Chef leaves two days before closing Multiplier: 2.4 Financing: Promissory Note from seller Reason for Sale: Sellers wanted to spend more time with grandkids

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hy would you buy a restaurant?” is the first question out of everyone’s mouth when Wendy and Barry Richey announced to family and friends that they are now the new owners of Zurlos Bistro Italiano as of May 1, 2014. They both smile and reply “Why would you not?” Of course given that question on May 1st the answer may have been different…..

Zurlo’s was the brain child of Lori and Steve Stangl almost four years ago when

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the prior existing restaurant was closing.

They had established a great friendship with the current chef and admired his talents, backed by strong business skills, they ventured into Zurlos together. Over the next 4 years they created a great environment for customers and a quality reputation. They added on catering services that boosted sales. Like everything in life circumstances changed and Lori wanted to spend more time with kids and grandkids. It was time to starting exiting the business.

Lori and Steve approached The Firm about confidentially listing the restaurant for sale. They had been referred to The Firm from a respected colleague. The process then began and after a few interviews with potential buyers the Stangls had not met the right ones.

Wendy and Barry Richey were contemplating buying a business to add to their investment portfolio. By chance, Wendy was a business broker at The Firm. In a lighthearted staff meeting the listings were being discussed and lights went off in

Lori and Steve. Wendy and Barry. It was uncanny reflection of personalities and talents, both sides being comfortable with each other. The offer was made, accepted and the wheels were set in motion by The Firm to complete a transaction in 30 days.

There were so few obstacles along the way that when a few days before closing Lori decided it was time to tell her head chef what was about to happen. She had the utmost confidence that she was handing her ‘baby’ over to new owners. To her surprise her head chef did not see this transaction as a positive move. So, 24 hours before the closing day the Richey’s were forced to accept the reality that they were buying a restaurant without a chef!

Despite that obstacle they knew there were 20 other employees that depended on their jobs and, with the help of The Firm and their connections, it only took a day or two to line up a talented new chef, Vicki Swartz, to fill a much needed void. General Manager, Richard Mach and a strong talented team of kitchen and front house staff all remained on. Amazingly, the first month with the new team was one of the best the restaurant had seen. As Wendy stated “We didn’t buy just a business, we bought an entire team of talent.” The FIRM

Fresh Off The Firm Fashionable Women’s Clothing Boutique

Omaha Pain Clinic

$139,000 FOR SALE

$1,800,000 FOR SALE

This is a unique women’s clothing store that has had a terrific following for the last seven years. It also boasts exclusivity on much-in-demand but hard-to-find brands.

It’s in an ideal location in Sarpy County, the fastest growing county in the state.

With 1,700 active clients and an owner’s profit of $767,414 last year, this business listing is sure to not last long. The office is set up and equipment is all in place for a qualified buyer.

Animal Care Clinic

Interpretation Services Company

$515,000 FOR SALE

$380,000 FOR SALE

In business for over 30 years, this business is profiting $157,287 a year and has had continuous growth over the years, serving over 2,000 families.

With 45 contract translaters providing interpretation services in 240 languages, this business is profiting $100,677 a year and has gross sales of $561,090.

Custom IT

Sports Bar with Volleyball

$2,020,000 FOR SALE

$229,000 FOR SALE

This business has a cash flow of $523,528 a year and has over $2,000,000 worth of equipment and intellectual property, all included in the sale of the business.

With volleyball courts and a beer garden, this business is producing an owner’s profit of over $90,000 a year. With a new buildout and plenty of room for parties, this business is perfect for an owner-operator.

Ground Maintenance

Specialty Transportation

$2,250,000 PENDING

$360,000 PENDING

Founded in 1985, this family-owned business has over $600,000 worth of equipment and an owner’s profit of $761,484/year.

With all the special events in the area, this business is constantly busy. Having 10 drivers and eight transporting vehicles—this business is certainly turnkey for a new owner.

Lawn & Landscaping

West Omaha Private School

$1,490,000 SOLD

$257,500 SOLD

Doing almost 50 percent to the bottom line, this business is fully equipped and has a strong cash flow of $325,106 a year. Being in business for over 30 years has certainly built up the business’ name and reputation.

A well-prepared environment for children is exactly what this business has. With all the necessary equipment and curriculum for the business, this school will not be on the market for long.

No actual businesses names are used on this page.

Fall 2014

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Her Own Business

Jaye McCoy learns it’s never too late to go into business for yourself. written by Anthony Flott • photos by Bill Sitzmann

AS ITS NEW OWNER, TODD NELSON IS EAGER TO CONTINUE THE LEGACY OF DIAMOND LAUNDRY’S SUCCESS. The Deal Review Reason for Purchase: Sold their 26 year old company in efforts to start life’s next chapter.

Financing: Conventional loan by Access Bank Profit Margins: 33% Days on the Market: 51 Growth: 16% year over year Transition: Seller agreed to work for 1 year

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hen asked about the genesis of Diamond Laundry Service, Jaye McCoy says, “We realized there was a niche there [in healthcare], especially for smaller offices.” Thinking back to the beginning, she recalls, “We did anything from a one-person doctor or dental office to gigantic clinics with 17 doctors.”

With the introduction of OSHA regulations on the laundering of materials such as lab coats, gowns, and surgical towels, Bernard McCoy saw an opportunity for success and launched Diamond Laundry.

The business was established in 1994, and Jaye McCoy worked as Vice President to help her husband build the growing brand.

By January of 2014, Diamond Laundry had moved into a large commercial facility at 146th and Grover, and had 120 clients seeking their services. Although business was at its peak, Jaye could not shake the growing desire to try something new.

Helping seniors makes Jaye McCoy’s

The ultimate decision to sell their business was not easy. As Jaye puts it, “Your life is that business. I grew up in my family business, and our kids helped us in ours.” However, at age 56, she could not shake the urge to do something different with her career.

new endeavor “so, so meaningful to me.”

Jaye McCoy and her husband, Bernard, sold their business, Diamond Laundry, to entrepreneur Todd Nelson.

The McCoy’s listed their business with The Firm Business Brokerage in January, with no particular urgency Continued > Fall 2014

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or request for a speedy sale. Within a week of listing, however, Todd Nelson had submitted his mutual confidential disclosure agreement, reviewed financial and operatory information, and submitted a contingent offer to purchase for Diamond Laundry.

Nelson had an impressive resume. Founder of Energy Grid Solutions and an engineer at Kellogg’s, he was eager to add Diamond Laundry to his repertoire. After meeting with Nelson, the McCoys felt confident that he was a savvy entrepreneur and businessman they could trust with the business they had worked so hard to establish.

On March 7, 2014, the day of closing, Nelson recalls that Bernard McCoy, “Was a little choked up,” and adds “Anyone who builds a company from scratch gets Jaye McCoy at home.

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some attachment to it.” As its new owner, Nelson is eager to continue the legacy of Diamond Laundry’s success.

During the three months it took to negotiate the terms of sale and finalize the closing documents for Diamond, FirstLight HomeCare, a Cincinnati-based company specializing in companionship and in-home care for seniors, went on the market. Jaye jumped at the opportunity to do something meaningful for herself and the community

Sales • Service • Rentals

Abe’s Trash Service, Inc. “Serving Omaha For Over 50 Years”

It was a quick turnaround. “They literally did this whole thing in six weeks,” says Jaye, “My mind was spinning. It was a challenge trying to sell one, buy one, and balance it all.” Clearly, it was worth it in the end.

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You really can own your own business and succeed!” The FIRM

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Today, she is the proud owner and President of FirstLight, where she leads 46 people on her team. The experience has been a triumph for everyone involved, but especially Jaye McCoy. With the continued support of her husband, Bernard, she has managed to serve as an example for anyone ready to jump into business ownership.

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Net Worth:

Things to consider before buying your first business written by Rob A. Randels, CFP®, MBA, ChFC®, CLU®, CLTCWealth Management Advisor Northwestern Mutual Wealth Management Company

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ave you ever thought about buying a business? Many of my clients already own one or more, and many more flirt with the idea on a regular basis.

Questions to ask yourself include “Am I buying a job?” or “Is this an investment?” Maybe both? Many of the most successful businesses have significant owner involvement or a trusted individual directly involved in the day-to-day operations, which is critical.

Owning a business can be a form of diversification to an already successful investor. You may have personal investments, a retirement plan, rental property, or other assets. Entrepreneurs have a unique ability to manage multiple ventures at a time.

When you ask business owners about their decision, many will tell you it was the best decision they have ever made. This doesn’t mean it doesn’t come with a lot of hard work and added stress at times. Remember, “Nothing ventured, nothing gained,” Benjamin Franklin quipped.

Your vision. Our experience.

Bob Kmiecik 316 . 2 6 8 .7 9 4 3 bkmiecik@stinson.com 1299 Farnam Street Suite 1500 Omaha, NE 68102

Omaha Kansas City St. Louis Phoenix Denver Washington, D.C. Wichita Overland Park

How will the financing transact? Are you able to pay cash? Will this transaction be financed? Remember, you are likely to need at least 10 percent down in order for your friendly banker to partner with you. The bank will like to see you have some “skin in the game” to demonstrate your true commitment. Having a great relationship with a commercial banker is a must and, with their experience, they can often protect you from a deal that they recognize is just “not right.”

“Every worthwhile accomplishment, big or little, has its stages of drudgery and triumph: a beginning, a struggle, and a victory,” as Gandhi said.

I wish you the best with your pursuit. Have a happy, successful and profitable 2014 and beyond! The FIRM

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Successful companies are fueled by energy, innovation and talent. Stinson’s attorneys help small-to-large businesses seize opportunities and address challenges, propelling ideas into success stories. Our perspective and experience supports your vision and allows you to channel your creativity into your business objectives. Stinson.com.

The choice of a lawyer is important and should not be based solely on advertisements.

Business owners, CEOs and company presidents.

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

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

www.vistage.com

Motorhead to Company Head

Andy Oelkers’ life-long love of cars led him to his dream business. written by Connie Barker • photo by Bill Sitzmann

Andy Oelkers is very much at home with his new business, Auto Air Plus.

The Deal Review Reason for Purchase: Buyer moved from Arizona to Omaha with family for new business opportunity Multiplier: 2.4 Financing: Combination loan from Pinnacle Bank and 1st State Bank Reason for Sale: Seller divorce

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ndy Oelkers has been a gearhead and grease monkey since before he could drive. He was working at the co-op gas station in Cozad, pumping gas, changing oil, and doing basic service work when he was 15. Back then, his primary goal was to save enough to buy his first car.

After high school, Oelkers went on to complete auto-body repair classes at Southeast

Community College in Milford. He found a job in Mesa, Arizona, doing something he loved: restoring high-end automobiles to their former glory. Although he loved

he could not find the right fit in someone else’s business, he thought about owning his own. He reached out to The Firm Business Brokerage.

“OBVIOUSLY, I’M A CAR GUY. THIS IS THE WORLD I KNOW. SO AUTO AIR PLUS WAS PERFECT FOR ME.”

“We worked together to figure out the best fit with what I know and what was available,” he says. “Obviously, I’m a car guy.

This is the world I know. So Auto Air Plus was perfect for me.”

- Andy Oelkers, Auto Air Plus

the job, Oelkers and his wife, former high school sweethearts and Nebraska natives, wanted to raise their family in the Midwest.

Last year, Oelkers started looking for opportunities that would bring them back home to Nebraska. The jobs he found did not fit the needs of his growing family. Since

Oelkers has been running the store at 4910 L St. since March. His family is back in Nebraska. At some point, he hopes to buy other businesses in Omaha. And yes, they will surely be related to his passion for cars.

“Honestly, I wouldn’t feel comfortable if there weren’t cars and trucks involved,” he says. “That’s just who I am.” The FIRM

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Executive Impact:

The Post-Labor Day Boom written by Susanne Miller J.D., In-House Legal Counsel, The Firm Business Brokerage

TOTAL LISTINGS 2012 & 2013 (COMBINED)

30 25 20 15 10 5 0

Activity picked up almost immediately after Labor Day, and the trend continued into the following months. Ultimately, we saw a 22% increase in deal flow from the combined first and second quarter totals to the combined third and fourth quarter totals.

The same trend appeared in 2012 thanks to the anticipated tax hikes set to occur at the end of the year, deal flow still trending upward after Labor Day. The first week

Quarter 1

Quarter 2

of September was sluggish, but deal flow picked up in the following months. Activity continued to surge, with a particularly active month of November.

If the Post-Labor Day Boom from past years holds true in 2014, the business community should begin to see increased activity in the coming weeks. In 2012 and 2013, there was a marked difference between the pre-Labor Day low and October’s peak deal flow.

With Labor Day signaling the middle of the third quarter, it makes sense that more deals occur in anticipation of the

Quarter 3

Quarter 4

fast-approaching year end. The distinct ebb and flow of ready buyers and sellers finally come together and businesses can be successfully transitioned. With that in mind, the industry experts of The Firm Business Brokerage predict that the end of the third and beginning of the fourth quarter in 2014 will see more deals closing in the Midwest market and more businesses operating under new ownership at year end.

If you have been thinking about selling or buying a business, now is the time to act by initiating a confidential and complimentary business valuation with a member of our executive staff. The FIRM

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ith Labor Day upon us, the business community is preparing for transition out of the summer slowdown. In both 2012 and 2013, the mergers and acquisition community saw a real Post-Labor Day Boom in deal activity. After summers filled with vacation, deal-makers returned to have a productive and profitable fall deal season.

Cash Flow:

The Pros and Cons of SBA Lending written by Marie Allely, TS Bank

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hether a person is just starting a business or has been established for years, a Small Business Administration (SBA) loan can help turn business owners’ dreams into reality. The U.S. SBA 7(a) loan is the program of focus today.

The 7(a) is the SBA’s primary, most flexible program and partners with commercial lending institutions. To be considered for an SBA loan, a business must demonstrate that it has less than $15 million in tangible net worth and two year’s net income after taxes of less than $5 million. It is perhaps the most widely used, but before diving in, here are some pros and cons of this specific program.

Pros: 1. Offers longer maturities of up to ten years for working capital and up to 25 years for real estate and fixed assets, which can free up more cash flow because the payments are lower.

2. Rates are capped at the Prime Rate published in the Wall Street Journal plus a spread.

• Loans with maturities of seven years or less—spread is maximum of 2.25% over Wall Street Journal Prime Rate.

• Loans with maturities of more than seven years - spread is maximum of 2.75% over Wall Street Journal Prime Rate.

• Have access to capital where traditional commercial loans may not be available.

3. Businesses that lack sufficient collateral for a traditional commercial loan may find SBA loans useful.

Cons: 1. Generally, an SBA loan requires more information than a traditional commercial loan and all available collateral, including personal assets and personal guarantees from the principal owners.

2. SBA loans can take more time to approve and fund.

3. Some businesses are ineligible, such as nonprofit organizations, lenders, passive businesses, life insurance companies, and limited-membership private clubs.

4. SBA loans may require guarantee fees that do not apply to conventional commercial loans.

• Loans under $150,000 have a fee of 0% of the guaranteed portion of the loan.

• Loans over $150,000 but shorter than a one year term have a fee of 0.25% of the guaranteed portion.

• Loans $150,000 to $700,000 and over with a one year term have a fee of 3.0% of the guaranteed portion.

• Loans $700,000 or greater have a fee of 3.5% of the guaranteed portion, additionally 0.25% on any guaranteed portion over $1 million.

Community banking institutions, like TS Bank, recognize how important small businesses are, and specialize in local decision-making, so clients work directly with the people approving their loan. Small business owners should pursue community banking institutions who meet their unique needs of seeking capital, whether it is to expand or provide the working capital to grow, and want to be their financial partner.

Connect with Marie on LinkedIn and visit tsbank.com to learn more. The FIRM

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