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 Selling a small business isn't just about the inventory 
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Post Selling a small business isn't just about the inventory
Another interesting piece:

For the past three years, the owners of Fiato's Orchard in the Town of Binghamton have been contemplating retirement, but they don't want to sell the business to just anyone.

They're seeking a buyer who loves the apple orchard as much as they do and will continue developing the business they've operated for more than 20 years. But so far, retirement remains an elusive luxury they cannot afford.

For many small business owners, retiring is not as simple as closing up shop and walking away. Retirement usually involves selling the business to an employee, family member or someone else who is familiar with the enterprise. But often, there's no one willing to assume the cost and responsibility of taking over the business, forcing the owner to toil on or resign without finding a successor.

"Very few want to liquidate their businesses," said Douglas Boyce, regional director of Binghamton University's Small Business Development Center. "It's almost like their child. They want to see their business continue to mature."

But finding a new owner can be difficult, he said.

"We've been looking for the perfect buyer," said M. Claire Fiato, who with her husband, Tony Fiato, is trying to sell Fiato's Orchard for about $429,000. The orchard features approximately 3,000 trees that produce about 45 varieties of apples. The business also includes a gift shop and bakery.

"We don't want to sell it just to sell it," said M. Claire Fiato, who also works at Rockwell Collins Simulation & Training Solutions in Choconut Center. "We would like to find somebody who loves the land and likes the concept. It's a family business, and it's hard work."

The Fiatos thought they had found suitable buyers in May 2005, but the deal fell through after a few neighbors filed complaints with the town against the business, objecting to traffic and a decrease in surrounding property values. The Fiatos said the claims are groundless, but even so, the controversy scared away the prospective buyers.

"This is the last thing I want to do," Tony Fiato said. "I'd like to keep this going until I'm 80. But it's just time for us. The kids have moved on, got jobs out of town, so they can't take it over. I'm afraid it's going to end here. ... There's not too many sites for apple orchards. People should try to keep this type of business around here."

It was unclear when or if Lone Maple Farm in the Town of Binghamton would reopen after its owners, Michael J. Harris Sr. and Sandra Harris, retired and unexpectedly closed the business in August 2004. Then they sold Lone Maple Farm in February 2005 to their son, Michael J. Harris Jr., who said he wanted to keep farm-fresh produce available in the community. He reopened the business for its 32nd season in the spring of that year.

DinoTheodoropoulos, who has operated the Argo Restaurant in downtown Binghamton for nearly five decades, announced in December 2005 that he plans to retire and is seeking a buyer for his business.

Theodoropoulos said earlier this month that several people from Greater Binghamton and the New York City area have expressed interest in buying the restaurant, but he has not finalized any deals.

"It's not quite as easy to sell the business and head to Florida. There's a lot to it," Boyce said. "There's a lot of people who would rather start their own than buy into another business. It's not like buying a home. It's like you're buying a career."

It's no surprise then that nearly half of small business owners say they will never fully retire, according to a survey released late last year by the National Federation of Independent Business, a nonprofit small-business advocacy group. Eleven percent of the small business owners reported that they plan to postpone retirement until at least age 70. Less than 10 percent expected to retire before age 60.

In many cases, a small business owner will remain involved in their enterprise for one to three years after retiring to help a new operator make the transition as transparent as possible, Boyce said.

"Small business owners are typically active people who are energized by the challenges and rewards of building an enterprise," William Dennis, senior fellow at the NFIB Research Foundation, said in a written statement. "And they intend to remain active later in life, long after most others have retired."

Barbara and Theodore Felton, the founders of Theo's Southern Style Cuisine in Johnson City, have found that keeping the restaurant alive and thriving is a family affair.

They've retired from the 15-year-old business but still contribute. She bakes the sweet potato pies. He makes sauces. Their children, Ted Felton and TeressaFelton Timberlake, manage the restaurant's daily operations. The couple's six other children also help out.

"It's really good to have a big family because you can always call up that extra brother," Ted Felton said.

But for the Fiatos, it's find a buyer or else.

"Every cent we've ever earned has gone into that orchard," Tony Fiato said. "One way or another, we have to sell the orchard or sell it for building lots. If we sell it for building lots, that's when we move out of here. I'd like to stay."

Boyce said that for a lot of small business people, their entire retirement plans are centered on the sale of their businesses.

"They don't often put away a lot of retirement money," he said. "Their big nest egg is the business and the sale of the business. If it doesn't sell, they just basically have to make alternative plans or wait until it does sell before they can actually retire."

Boyce said that there are various formulas business owners can use to determine the value of their enterprises - and selling prices - to potential buyers.

The valuation is usually based on sales and income, he said, and could be as simple as three or five times earnings.

If a business is not profitable, asset valuation normally is used, he said.

"The average business owner will think that their business is worth more than it actually is because of sentiment," Boyce said. "It's been their life. It's been their career."



By My-Ly Nguyen
Press & Sun-Bulletin
www.pressconnects.com


Tue Feb 28, 2006 12:01 pm
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