Baby boomers’ heightened awareness of legacy combined with a penchant for owning businesses is leading to the extraordinary circumstance of 10 million owners searching for the same thing: a buyer who not only has the cash, experience and interest in buying a business, but a concern for the legacy they will inherit with it.
OneAccord Capital was founded to help fill in the gap between the huge number of businesses starting to hang up For Sale signs and the relatively few buyers. OAC can’t put up the entire $10 trillion set to change hands over the next decade, so the question on the table is:
How do I find a buyer concerned with legacy?
First, let’s spell out what we mean by legacy. The most basic move a buyer can make to preserve legacy is retaining the name and location of the business. If you buy Jimmy’s Hardware in Kent, WA, renaming it Kendra’s Hardware and moving it to Bellevue wipes out the memory of Jimmy and his hardware store. While it might technically be the same business, practically it’s a new creation and Jimmy’s legacy is gone. After OneAccord Capital bought Graphic Label Inc., they turned it into an LLC but kept the name. The logo still reads GLi, the name is still Graphic Label Inc. and its headquarters are still humming along in Yakima. Legacy means continuing to build, without tearing down.
Caring about the previous owners may sound like a nice thing to do, but legacy is also good for business. Keeping Jimmy’s name on the sign, keeping the employees on who have worked at GLi for years — these actions retain the value of the name of the business and the experience of the employees who know how to run it. Searching for new employees takes time and money; keeping on the employees of a well-run business does not.
Business is about relationships. Good relationships equal good business, so keeping on employees, customers, vendors and continuing the business’ role in its community is just plain smart. The established knowledge and relationships keep the business running and allow for a clear path to growth. They also give the new owners time to learn the business from top to bottom so they’re better equipped to create growth. Demolishing the company and rebuilding doesn’t make sense when you’re trying to turn a profit.
So if you’re a business owner worried about your legacy after you sell, know that there are compelling reasons for a buyer to preserve and expand your legacy. It is possible to find the right buyer, but it will take forethought and work.
First, it's important to remember buyers are looking for a good investment. A well-run business with a strong foundation, consistent earnings and a clear path to growth is a great investment. Take the time to prepare your business for a sale and when you find a legacy-focused buyer they won’t be scared off by crippling issues in your business.
Second, keep in mind you're not the primary person searching for a buyer. Your broker will market your business and vet potential buyers. From the start, let them know you’re not interested in selling your business by auctioning it off to anybody with the cash. Be specific about what you’re looking for so your broker can help you find the right match.
Speak with an expert about transitioning your business.