Selling your business?

[WebSlave]

Recently I had someone approach me about buying my SerpenCo business. I've always known I will have to get out of this sometime in the future, since the physical demands are wearing both Connie and I down. But I guess I never really gave it a lot of thought, since that future day always seemed to be over the horizon and not really close by at all. Well the above mentioned query brought it right over the horizon and into my lap.

Honestly, I thought that the way I would liquidate my business is by just piecemeal selling off the animals, not giving any though to the other assets such as the caging, racks, mouse colony, etc., etc. Not only that, but what exactly is the name "SerpenCo" worth? What about my customer list? Even with the animals, what are ongoing projects worth that are based on genetic "stuff" that I really don't know what they are?

Basically the prospective buyer said he wanted to buy the business "turnkey", which I guess means EVERYTHING. Not the buildings and the land, of course, but everything directly related to the animals.

So I'm thinking I need to do an inventory, but that is going to be a HUGE task all in itself. One reason being is because for anything that is pre-breeding age/size, I only have them identified by an ID number on the cage, and don't have the animal itself labeled (outside of a cheatsheet that lists the ID numbers from the parentage it came from). So in doing an inventory, each animal will have to have that ID number researched to be able to identify the genetic background so I can determine it's value. Which will be REAL time consuming, but absolutely necessary for this process.

Of course, the REAL question is: Could I actually give up something I've been doing for 30 years? I mean flat out COLD TURKEY get out of corn snakes? When I think about all the ongoing projects I have that I will NEVER know the results of, it kind of makes the hair on the back of my neck stand up.

But on the other hand, would it be wise of me to wait until Connie and I have the inevitable medical condition arise that puts us down for the count? This business just cannot be run without both of us being healthy enough to do it. So there is definitely a "sword of Damocles" aspect about it that has to be considered.

Anyway, has anyone else gone through something like this? At least concerning similar circumstances with so many intangibles involved? Selling a business where only hard goods are involved is not the same since they are not capable of producing future income via offspring such as animals are.

Heck, I am always baffled anyway about how cheaply adult females are sold. I can sell bulk corns all day long at $10 a pop, so figuring an average production for a single female as being 16 babies, that makes each female worth AT LEAST $160. But what about the projected breeding lifetime of that animal? If you conservatively project 5 more breeding years, then the income potential for that female is now $800 (minus upkeep, of course). So let's estimate $200 for upkeep, which STILL puts the value at $600. Yet even with that valuation, I see people haggling over buying an adult female corn snake for $50. Try to sell it for HALF the actual value and people would look at you like you have lost your marbles.

So yeah, trying to come up with a realistic value for my business is going to be a real headache. And I do recognize that it may come to pass that what it is really worth is no where even close to what someone would want to pay for it. Which, of course, means a whole lot of time and effort spent figuring that out.........

Anyway, perhaps this will be food for thought to some people, since possibly others will have to face this in their own future. To be honest, I'm trying to think of reptile businesses in the past that were sold, but can't come up with any right off hand. Seems to me, all I can recall just seemed to fade away or just suddenly vanish. Maybe KEEPING a reptile breeding business up to the point where it is still valuable enough to sell is an anomaly...

 

[Lucille]

To be honest, I'm trying to think of reptile businesses in the past that were sold, but can't come up with any right off hand. Seems to me, all I can recall just seemed to fade away or just suddenly vanish. Maybe KEEPING a reptile breeding business up to the point where it is still valuable enough to sell is an anomaly...

There's an idea right there. If you choose to sell Serpenco, selling off the business, goodwill, critters etc., that will substantially lessen the physical demands on you and Connie.

But you still have a valuable commodity: your knowledge and experience. The buyer of Serpenco and others as well, may want to hire you as a consultant. A successful ongoing reptile breeding business does not only reflect effort, but know-how as well.

According to the Small Business Administration only 44% of small businesses survive at least 4 years. You have demonstrated success and others may see that as something worth paying for.
The costs of a failed business are substantial and consulting with others who have been successful may help such businesses avoid the pitfalls that lead to business failure and increase the chance of doing well.

 

[norsmis]

Rich, I have to say I think of YOU as Serpenco, not just the animals and what comes out of it every year. Your knowledge of reptiles, corns in specific, is phenomenal whether you want to admit it or not.
I know this isnt helping answer your question(s) but my opinion is you should sell it for what YOU think its worth to you and Connie. I wouldnt even begin to know what to offer for a business like yours. And to be honest, Serpenco wont be Serpenco without you at the helm.....

 

[Southern Wolf]

Recently I had someone approach me about buying my SerpenCo business. I've always known I will have to get out of this sometime in the future, since the physical demands are wearing both Connie and I down. But I guess I never really gave it a lot of thought, since that future day always seemed to be over the horizon and not really close by at all. Well the above mentioned query brought it right over the horizon and into my lap.

Congrats

Honestly, I thought that the way I would liquidate my business is by just piecemeal selling off the animals, not giving any though to the other assets such as the caging, racks, mouse colony, etc., etc. Not only that, but what exactly is the name "SerpenCo" worth? What about my customer list? Even with the animals, what are ongoing projects worth that are based on genetic "stuff" that I really don't know what they are?

Basically the prospective buyer said he wanted to buy the business "turnkey", which I guess means EVERYTHING. Not the buildings and the land, of course, but everything directly related to the animals.

But isn't this soooo much better.... just think of what you could do with XXX vs $10 here $10 there.

So I'm thinking I need to do an inventory, but that is going to be a HUGE task all in itself. One reason being is because for anything that is pre-breeding age/size, I only have them identified by an ID number on the cage, and don't have the animal itself labeled (outside of a cheatsheet that lists the ID numbers from the parentage it came from). So in doing an inventory, each animal will have to have that ID number researched to be able to identify the genetic background so I can determine it's value. Which will be REAL time consuming, but absolutely necessary for this process.

And thus the reason I started the inventory thread... I want to get a handle on this... before I even get remotely close to what your producing.

Of course, the REAL question is: Could I actually give up something I've been doing for 30 years? I mean flat out COLD TURKEY get out of corn snakes? When I think about all the ongoing projects I have that I will NEVER know the results of, it kind of makes the hair on the back of my neck stand up.

Who say's you have to quit cold turkey.... you could keep the genetics projects that have not proved themselves yet.

Im just throwing numbers out there... so I know they may be a bit off.... but lets say that ya'll are dealing with 2000 breeders and the resulting offspring. You could sell the biz and just keep maybe 100-200 breeders. That number is not unmanageable for one person.... and you still get to do what you love.

My guess is that the buyer also wants the SerpenCo name... so you would have to start up another Biz name... but that shouldnt be any problem...cause pretty much everyone knows Rich Z runs SerpenCo. so maybe start up a smaller biz using your name so you are now seperate from SerpenCo.

And here is the upside.... if you sell SerpenCo for even remotely close to what its worth... chances are that would be a nice addition to the retirement account. So you can kick back... and just deal with a few animals instead of spending all your time dealing with them.... think of it this way.... you have worked your butt off and that paid for your retirement... and you can retire and return to the hobby stage if you will... or just go from Big Biz to a Small Biz owner.

But on the other hand, would it be wise of me to wait until Connie and I have the inevitable medical condition arise that puts us down for the count? This business just cannot be run without both of us being healthy enough to do it. So there is definitely a "sword of Damocles" aspect about it that has to be considered.

"A bird in the hand is worth more than 2 in the bush".... ie who knows if the offer will come back around when you ACTUALLY need to retire.

So yeah, trying to come up with a realistic value for my business is going to be a real headache. And I do recognize that it may come to pass that what it is really worth is no where even close to what someone would want to pay for it. Which, of course, means a whole lot of time and effort spent figuring that out.........

True... but if another offer comes along... you wil have already done the legwork.. and will be ahead of the game.

But you still have a valuable commodity: your knowledge and experience. The buyer of Serpenco and others as well, may want to hire you as a consultant. A successful ongoing reptile breeding business does not only reflect effort, but know-how as well.

According to the Small Business Administration only 44% of small businesses survive at least 4 years. You have demonstrated success and others may see that as something worth paying for.

The costs of a failed business are substantial and consulting with others who have been successful may help such businesses avoid the pitfalls that lead to business failure and increase the chance of doing well.

She has a very valid point.... you have alot of knowledge... Im gonna use ideas from another area that Im in. I am also a Semi-Pro Photographer... and one of the things alot of the Pro Photographers do is hold photography workshops. The workshops normally last from anywhere from 1 day to a week long. You could so the same thing... hold a workshop there at your facilities (you would still get to sleep in your own bed at nights)... and pass along the know-how that you have recieved over the years. The last workshop that I went to... I paid $900 for 2.5 days.... here is the key though. I was able to make a dream come true so I was willing to pay it. Most small biz owners may not be able or willing to pay HUGE amounts to come to a work shop.... but if it stays reasonable... I bet your workshops would be full everytime.

Rich, I have to say I think of YOU as Serpenco, not just the animals and what comes out of it every year. Your knowledge of reptiles, corns in specific, is phenomenal whether you want to admit it or not.
I know this isnt helping answer your question(s) but my opinion is you should sell it for what YOU think its worth to you and Connie. I wouldnt even begin to know what to offer for a business like yours. And to be honest, Serpenco wont be Serpenco without you at the helm.....

Just some thoughts to consider.

 

[Cheryl Marchek AKA JM]

Inventoring and settinga value to everything is going to be a LOT of work as you stated. Make sure your potential buyer is serious and has the kind of money your prospectively looking at BEFORE you do all that work!
Good luck!

 

[KathyLove]

I am about the same age as you are Rich, and I have definitely thought about it a bit the last few years. Although I have trimmed down the collection quite a bit the last few years, I have actually thought about the possibility of a sort of "sale / mentorship / consultant" type relationship with a buyer, if it was the right person coming along at the right time. I figured if it was somebody younger and enthusiastic about expanding the business again, and maybe even buying the land and buildings, etc, (and if it was somebody with the finances to do so) maybe it would actually be kind of fun to stick around as a consultant for a few years to help guide them, put them in touch with the right people in the industry, acquaint them with customers, etc, while the new owner does a lot of the actual work. After a certain amount of time, the new owner would take over completely, and Bill and I would "retire" (sort of, but actually it would be to get involved more in other herp projects that require less live animal care) to a smaller place in Arizona.

Maybe a few of those ideas could be applicable to you - not sure about that.

I haven't actively looked for a buyer yet. Maybe in a few more years! It would be difficult to find the exact "right person" with the finances, interest, and ability to run such a business, all rolled up into one person. If I happened to find the right person before I was really ready, I would probably consider doing it earlier than planned, since, as mentioned, who knows when the right person might come along again? So go ahead and send your potential buyer my way if you decide you aren't ready yet, lol! Never know what might happen!

I also thought about the idea of "giving up" something I have been doing for so long, but then I really would only be giving up just one aspect - raising more animals than I really want to just to sell some. That doesn't mean I couldn't raise up smaller numbers just because I really like them - and still sell the extras. Workshops and seminars have been suggested as an interesting semi retirement career. We actually have thought of that - maybe Bill doing photo workshops and me doing reptile industry related ones. But you already have this forum and CS to keep you busy (and hopefully provide at least a little profit - maybe MORE profit if you didn't have the snake business to also care for). And you may be too burned out on the general public to want to do workshops - only you know that. Just think of all of the reptile related possibilities that can be pursued in "semi retirement", whether it is small, specialized reptile breeding, education, writing, photography, maybe even special caging or drygood products, not to mention Internet based business, such as your forums - the list is endless! I don't think any of us in this business will ever be bored, even if we sell our original business to do something else!

 

[WebSlave]

Who say's you have to quit cold turkey.... you could keep the genetics projects that have not proved themselves yet.

Im just throwing numbers out there... so I know they may be a bit off.... but lets say that ya'll are dealing with 2000 breeders and the resulting offspring. You could sell the biz and just keep maybe 100-200 breeders. That number is not unmanageable for one person.... and you still get to do what you love.

Well, honestly, I think that would just leave me sitting in the same boat I am already in. To keep 100-200 breeders, I would STILL have to have the mouse colony, and STILL have to clean and feed all those adults on a weekly basis when they aren't in brumation, and STILL have a bunch of babies to take care of.

Truth be told, MANY of the animals here are either projects that will produce new animals, or else the basis for a long term project where the combination genes being produced are necessary to make the eventual goal easier to achieve. Yeah, I still have some of the old standbys like Crimson, Fluorescent Orange, and Silver Queens, simply because I LIKE the results I am getting from them. But much of the stuff has been severely cut back over the past few years, and I still have too many animals to work with.

Holding back ANY of them would very likely put me in the exact same spot I am in now in a few short years. I mean, each and every year I somehow think of new projects to start, and I doubt that would stop dead as long as I had any genetic material to work with.

And with that in mind, I would still wind up killing my wife with the work load, and run the risk of either her having to bear up under the entire workload if I wind up in the hospital for any length of time, or I do the same without her help if SHE were to wind up in the hospital. No, I just don't think that is the way to play the cards at this stage of my life. I just think it is time to REALLY retire.

My guess is that the buyer also wants the SerpenCo name... so you would have to start up another Biz name... but that shouldnt be any problem...cause pretty much everyone knows Rich Z runs SerpenCo. so maybe start up a smaller biz using your name so you are now seperate from SerpenCo.

This is unlikely to work, even ignoring my above comments. In any business sale similar to what I am talking about here, it is pretty typical for the buyer to insist on a non-compete clause in the contract of sale. Meaning, they do no want the seller to just turn around and become their competition when they turn around three times, knowing the seller will still have the weight of their past clientele to call on. No, I don't think it would be fair to the buyer to even consider doing something like that.

And here is the upside.... if you sell SerpenCo for even remotely close to what its worth... chances are that would be a nice addition to the retirement account. So you can kick back... and just deal with a few animals instead of spending all your time dealing with them.... think of it this way.... you have worked your butt off and that paid for your retirement... and you can retire and return to the hobby stage if you will... or just go from Big Biz to a Small Biz owner.

Actually I AM just a small biz owner now. I never really wanted to, nor allowed, SerpenCo to get REAL big. The closest I got was when I produced 7,000 to 8,000 babies one year. After nearly losing my sanity (literally), I decided I was NEVER going to do that again. So now, evern 3,000 to 4,000 babies is more than I want to do any longer. And if we kept ANY animals at all, we are tied down here pretty much completely. Bearing in mind that there just does not seem to be the quality employee pool to choose from, there is no likelihood of being able to hire someone so that Connie and I could do something as radical as take a vacation for two weeks. It has been a good 18 years or so since we have been able to take anything resembling a vacation that lasted more then 3 days. Quite frankly, I'm tired of it. And there is no doubt in my mind that Connie is tired of it too, but only keeps it up because she doesn't want to let ME down.

Yeah, there is a lot more I would like to see in new projects with corn snake genetics, but I believe that will be true for a good many years in the future. I've seen quite enough already, and been very fortunate to have a number of new genes pop up in my own facility. It's no longer even possible for me to do ALL the projects I would like to do. But I guess I will have to do so vicariously through my CornSnakes.com forums when other people are creating and discovering new things that will be inevitable in the future.

But right now the prospect of just getting in the car and DRIVING for the next month or two with no destination in mind, and nothing overly pressing to bring us back home without something dying, is immensely attractive to me. Yeah, I would have my laptop with me to check on my sites, but the worrying about ANIMALS would be over with.

She has a very valid point.... you have alot of knowledge... Im gonna use ideas from another area that Im in. I am also a Semi-Pro Photographer... and one of the things alot of the Pro Photographers do is hold photography workshops. The workshops normally last from anywhere from 1 day to a week long. You could so the same thing... hold a workshop there at your facilities (you would still get to sleep in your own bed at nights)... and pass along the know-how that you have recieved over the years. The last workshop that I went to... I paid $900 for 2.5 days.... here is the key though. I was able to make a dream come true so I was willing to pay it. Most small biz owners may not be able or willing to pay HUGE amounts to come to a work shop.... but if it stays reasonable... I bet your workshops would be full everytime.

Maybe..... But I kind of doubt it. This all really isn't all that tough for someone to pick up and master on their own. And without actually hand holding someone through and entire YEAR to experience first hand all the things that need to be done, I think just about everything has been well covered in books and threads on related websites. Wish I had gotten into video earlier and taken a lot of footage over the years to make a culmination type video to sell.

With an actual workshop, I don't see how that would work without having actual animals here to use as demonstrations, so that would put me right back at square one again with animals to have to take care of.

I am about the same age as you are Rich, and I have definitely thought about it a bit the last few years. Although I have trimmed down the collection quite a bit the last few years, I have actually thought about the possibility of a sort of "sale / mentorship / consultant" type relationship with a buyer, if it was the right person coming along at the right time. I figured if it was somebody younger and enthusiastic about expanding the business again, and maybe even buying the land and buildings, etc, (and if it was somebody with the finances to do so) maybe it would actually be kind of fun to stick around as a consultant for a few years to help guide them, put them in touch with the right people in the industry, acquaint them with customers, etc, while the new owner does a lot of the actual work. After a certain amount of time, the new owner would take over completely, and Bill and I would "retire" (sort of, but actually it would be to get involved more in other herp projects that require less live animal care) to a smaller place in Arizona.

Maybe a few of those ideas could be applicable to you - not sure about that.

I think a lot of people have cut back over the last few years. I TRY to do that every year by selling off 300 to 500 adults, but it seems like there is always a new batch of adults just coming online for breeding that fill those empty cages and put me right back where I was at before selling the surplus adults.

As for someone buying the business, it is EXTREMELY unlikely anyone local would be a prospect. And I certainly would not be willing to commute to somewhere else to act as a hands-on consultant. Since the buildings and the land are NOT for sale, that means the actual business itself will have to be relocated to wherever the buyer happens to be. So especially if the business gets relocated up into the more northern states, I'm not really inclined at all to go north into the frozen tundra states.

All in all, it is my expectation that anyone wanting to buy such a business will very likely already have the expertise under their belt to know what they are doing without much, if any, handholding. Yeah, there may be a lot of "Rich, just what the hell IS this.." sort of questions at first, but the actual husbandry issues will not likely be an issue that needs to be dealt with.

I haven't actively looked for a buyer yet. Maybe in a few more years! It would be difficult to find the exact "right person" with the finances, interest, and ability to run such a business, all rolled up into one person. If I happened to find the right person before I was really ready, I would probably consider doing it earlier than planned, since, as mentioned, who knows when the right person might come along again? So go ahead and send your potential buyer my way if you decide you aren't ready yet, lol! Never know what might happen!

Yeah, I believe the number of people who would fit in those shoes is going to be rather small. And quite possibly the person who contacted me about this whole thing has in mind a purchase figure that is WAY lower than I would ever even consider. Heck, I remember years ago someone offered me $1,000 to buy FaunaClassifieds. When I laughed it off, they made a counter offer of $5,000... So no telling what someone might think I would be willing to take for the SerpenCo business. Just based on the projects I have been working on and the potential for new genetic material and combinations that will reach the market from my stock, I believe someone could make quite a lot of money from my animals. I know I've certainly done well enough by it over the years.

But if this does fall through, and I find my thinking about it leaves me wishing it had not, then I may just do a PLAN B and sell off all the adults piecemeal after the eggs are laid this spring. Then when the babies hatch out, try to sell them off as quickly as possible, and THEN be done with it. Which, of course, would take much longer, but I figure I'm going to be collecting my state pension around February, 2010, and then have to wait until I am 62 years old (in 2012) to collect social security, I guess I shouldn't really be in any hurry to end this. Assuming mine and Connie's heath holds out, of course. That is actually the real joker in the deck that I am hoping I can dance around for as long as possible. This spring could have been rather ugly if the older procedures for appendicitis were still being used and I had been laid up for 6 weeks recuperating. That most definitely was a wake up call for me, that I just cannot ignore.

I also thought about the idea of "giving up" something I have been doing for so long, but then I really would only be giving up just one aspect - raising more animals than I really want to just to sell some. That doesn't mean I couldn't raise up smaller numbers just because I really like them - and still sell the extras. Workshops and seminars have been suggested as an interesting semi retirement career. We actually have thought of that - maybe Bill doing photo workshops and me doing reptile industry related ones. But you already have this forum and CS to keep you busy (and hopefully provide at least a little profit - maybe MORE profit if you didn't have the snake business to also care for). And you may be too burned out on the general public to want to do workshops - only you know that. Just think of all of the reptile related possibilities that can be pursued in "semi retirement", whether it is small, specialized reptile breeding, education, writing, photography, maybe even special caging or drygood products, not to mention Internet based business, such as your forums - the list is endless! I don't think any of us in this business will ever be bored, even if we sell our original business to do something else!

Yeah, I would like to think my websites can bring in a modest income along with us living off of our savings. It's pretty tough trying to figure out how much money is enough for retirement. How long will you live? If you plan on budgeting your money for 10 or 12 years, what happens if you are still alive and going strong in 15 years? What happens if some unforseen financial catastrophe strikes you 5 years into retirement that wipes out your savings?

Hah! And I thought just quitting my job and moving down to Florida cold turkey from Maryland back in 1991 was a scary thing to do..........

 

[Southern Wolf]

Rich you have some very good points... but when I mentioned workshops... I wasnt talking about the 1 year hand holding types (maybe I misunderstood you... Ive been known to do that ). Back to my photography workshop... I know how to use my camera... and I know most all the terminology and what it means... but there is always those tips and tricks that others know that makes the photos that much better. That was what I was suggesting.

Yes we can find boat loads of genetics info online... but who better to be able to sit down and talk to than someone that has came up with new morphs... someone that can answer questions.. instead of just reading something in books (or online) and trying to interpret (sp?) on your own. And your right... some workshop topics would mean having animals on hand.

I wish you the best of luck in which ever avenue you take.

 

[ChadOsborne]

Well

Rich,
All I can do is share my experence with you. It's kind of ironic because you and Connie were always a great source of info for Joann and I. In 2003 when Joann was in the hospital I desposed of most of the animals post haste. All I really cared about was taking care of my family. Joann was in the hospital for over a month. It canges you I can't explain but it does. I'm back with the animals again but one person buys them all. No more shows. If it's time only you know the answer Rich. You have a great lady. Tell her I said hello.

Chad