THE BUSINESS OF BURGERS- PART DEUX

Neal A. Deutsch, CFP^®

Published in Rivertown Journal, February 2010

As a faithful follower of my column in Rivertown (c'mon- you know you are!) you will remember my article of August 2008. Not quite remembering? Hint: Krispy Kreme, Bar-B-Q, and burgers? Still fuzzy? OK, before we go on, go to The Business of Burgers!. Take your time...I'll wait.

OK. Now that you're up to speed, I'll continue. Since I wrote the August 2008 article, Mike decided to move into semi- retirement. He leased the building and sold the business to another gentlemen (it's what we call males in the South) and became a man of leisure. He taught the new owner how to do everything he had done to make Poppy's Place the hit of the area so the new owner could continue to prosper and make a fine living. Over the course of the next year however, the new owner made lots of changes: no longer was the restaurant painted in the well known bright yellows and greens: it was now various shades of beige. The menu had changed, and the quality of the food ran downhill from the fine, Grade A menu and products that Mike had served for years and years. It just was not the same.

Over the holidays, Elizabeth and I were back in our home in Tennessee (you understand why we go there from the previous article, which I KNOW you just finished reading). While down there, we went to Poppy's place for his famous burger, which I look forward to at every visit home. Much to my surprise, as I walked into the door, I was greeted in Mike's welcoming booming voice, jokes and old-fashioned boisterous rabble. MIKE WAS BACK! But what happened to retirement?

Things had changed for the business. Mike explained that the changes that the new owner made stripped Mike's place of the quality and character that he had spent so many years building, and so in a year and a half, it drove the new owner out of business and Mike was back. He advertised that he was once again at the helm, and he promised me that by the next time I return, the old gaudy colors will be back, signifying his return. So what happened, and can this happen to you?

If you are a small business owner, there will come a time for you to contemplate retirement, or have to sell due to health concerns, disability, divorce, or for many reasons. The key to a successful sale is to find a buyer that has a number of positive characteristics:

• Does he have experience in the field? Further, is his experience similar to yours, and his expertise similar enough to continue the success of your business or practice?


• Is he or she a nice person? Remember…you built your fine reputation making nice and caring for your clients and customers. Does the buyer have the same capabilities and personality?


• Do they have the funding to complete the sale and keep the business running in a down market? The single most often cause of small business failure is underfunding.


• Did you include the specific parameters of the sale in the sales contract? As soon as Mike's buyer changed the colors of the Poppy's place, the regular customers knew in a flash something had changed. It was like he advertising he was changing the old quality and charm Mike had worked so hard to build.

The sale of a business can be the best day of your life, realizing financial security for you and your family to move into that new phase of your life. Don't take it lightly, and remember that the top offer is not necessarily the best offer. Be sure to consider all the parameter of the sale when considering a buyer. If not, you could be returning from retirement sooner that you thought…

I strongly suggest you consider planned giving in your estate plan- it just may save your life or the life of the one's you love…

If hearing from me once a month isn’t enough, come visit me in our new blog site at www.chestnutblog.com.  If you think I’ve got pearls of wisdom here…you ain’t read nothin’ yet! See you there!

Neal A. Deutsch is a Certified Financial Planner^™  & Registered Securities Principal, offering securities through First Allied Securities, Inc., member FINRA/SIPC.  Neal is President of Chestnut Investment Group in Suffern, NY, helping people with financial planning since 1984. Please feel free to call Neal at 845.369.0016 or email him with your questions at neald@chestnutinvestment.com. Visit his website at www.chestnutinvestment.com