Selling iTopIt with Henry & David.
Henry Lopez (Serial Entrepreneur, Small Business Coach & Consultant, Host of The How of Business podcast) and David Begin (Serial Entrepreneur, Carwash Industry Consultant) are the hosts of this episode.
Topics and questions addressed in this episode, hosted by Henry Lopez and David Begin, include:
- Overview of the business and timeline:
- Idea source – where did the idea for this small business come from?
- Business Planning – the importance of up-front business planning.
- Creating our own brand and systems – we decided to create our own brand and systems, instead of investing in a franchise business.
- Opened two locations in early 2011 – We opened two location within months of each other!
- Increased competition – after operating for about a year, the Colorado Springs, Colorado market was flooded with competitors.
- Closed the second location in 2016 (We shared this story on episode 35), after our initial 5-year lease ended. In hindsight, we can now see the issues with this location.
- Operated first location profitably every year – including 2020!
- Impact of COVID – which caused us to close our dining room two different times, and had significant negative impact on our sales.
- Sold this small business in 2021.
- What we did well:
- The Brand and Environment – we create a brand and an environment that was enjoyed by our target customer: moms, and the kids.
- The quality of the finishes, and ongoing maintenance and cleanliness. Customers often asked if it was a corporate or franchise business operation.
- Customer Service – we focused relentlessly on delivering Remarkable Customer Experience.
- Systems – We developed and implemented systems. Everything from an opening checklist to comprehensive employee training.
- Developing and retaining staff – we were able to attract and retain hourly-wage employees because of our:
- Fair and above marketing compensation
- Positive and fair work environment
- Training & Coaching
- What we could have done better:
- Community involvement – more involvement with local schools and other organizations.
- Advertisement – more targeted advertisement spend.
- More focused on this business – instead of it being one of a portfolio of small businesses we owned and operated.
- Why Sell?
- We discuss whey David wanted to sell, and why Henry did not.
- Impact on our business partnership:
- Business alignment with personal plans and needs.
- Partner alignment on exit plan.
- Partner needs and desires change over time.
- We discussed it on a regular basis – it was not a surprise that David prefer to sell rather than sign another 5-year lease.
- How did we sell it?
- Listed business for sale on BizBuySell and Craigslist. The buyer of the business found us through the Craigslist ad.
- We also emailed our mailing list of customers.
- The Process:
- Receive initial inquiry
- Schedule information call
- Sign NDA
- Site Visit
- Financial Documents Review
- LOI (Letter of Intent)
- Due Diligence by Buyer
- Draft Contract
- Asset Sale
- Closing
- Closed at a Bank, and had a witness sign the contract as well.
- Transition Period
Episode Host: Henry Lopez is a serial entrepreneur, small business coach, and the host of this episode of The How of Business podcast show – dedicated to helping you start, run and grow your small business.
Resources:
Free Downloads:
- Memo of Understanding – to help you structure a small business partnership.
Related Podcast Episodes:
On episode 35 of The How of Business podcast Henry Lopez and David Begin discuss the failure of a small business – the second location of their frozen yogurt business:
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