Thursday, May 21, 2009

The Paradox of Our Industry In These Tough Times

There is an old song by the Clash that comes to my mind as I swim threw this business buying and selling environment..."should I stay or should I go'" but with slightly different words "should I buy or should I sell."

This song is a classic song about a person who doesn't know what to do and who is totally confused. And this is where our market is right now; albeit we've move a bit farther away from the abyss of total darkest of confusion we were in in February. Now there is a light coming over the horizon, and I hope we're not in Alaska where is stays there for sometime.

There are little trickles of buying activities in all areas of our company. There is certainly increased levels of activity across the spectrum of websites with our advertisers generating plenty of interest and the registration levels at our website are healthy at 130+ per week, not bad for this time of year.

What we need though is more content, and quality content at that. And this is where the confusion starts. The market for new listings will lag the market place's demand for restaurants and businesses driving up multiples for the existing inventory. Seller's with good businesses will start to jump back into the market place as soon as they see transactions are taking place. As I said, we're seeing demand bubbling up right now, and this is traditionally the slower time of year. So perhaps old trends will Clash - I had to say it - with new trends. Let's hope!

We have the best people in the business and the best tools to do deals before every one else starts. So let's make it happen!

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Wednesday, May 13, 2009

Chasing The Antelope...

If there was ever a day where I felt like that Cheetah in the video chasing down the antelope and licking my chops only to have it pick out from right under my gripping teeth, that day was today!

I've worked on one deal since October 2008. It should have been an easy deal from the beginning. Simple asset sale priced at $125,000, right. Wrong! All parties involved in this deal were tough to deal with; landlord, seller, and buyer. I got the deal past hurdle after hurdle, and there were more hurdles in this deal then in a 400 meter hurdle track race.

First, it was the price. Got past that after two months. Then it was the Seller didn't want to transfer the beer and wine license. Got past that in a month. Then it was the landlord trying to take advantage of the new buyer/tenant with a rediculous lease that resembled nothing of their agreement and the buyer went paranoid from that point forward and had an attorney check the lease not once. not twice, but THREE TIMES. Got past that after two months. Then it was a Buyer who had to check with his buddies, attorney and regional franchisor on every move; and his buddies are the experts, right! Got past all those folks.

So 8 months later and on the day of the posting of the ABC license, buyer, seller, franchise rep for buyer and I meet at the restaurant to post the license. Buyer asks, by the way, the phone number is included in the sale, right? I say no, you're buying a asset, not a business. You changing the name. The sellers owns another place just down the road in the next town and they're going to transfer the number, right? Buyer say, then I don't want the place. Deal over!

One can never know when immaterial points like the transfer of a phone number can kill a deal. Needless to say, I was amazed! I still hold-out some hope and I will try to get creative to try to make the deal happen, but I'm laughing at the

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