Matchmakers

The Beals find suitors for companies

by Mark Pendergrast

vbb_lead_daylight_cmykSharon and John Beal, the owners of Vermont Business Brokers in Charlotte, scheduled their photo shoot so their Bernese mountain dog, Ody (short for Odysseus), could first recover from surgery. The Beals bought into the company in 1996 and, a few years later, became the sole owners.

Sure,” Richard Hernandez emailed in response to a request for an interview. “We have all the time in the world, thanks to the Beals.”

In 1970, in Bennington, Richard and Tina Hernandez opened Spice ‘n Nice, Vermont’s first natural foods store. Two years ago, they decided it was time to retire. They contacted a business broker with a large, out-of-state company, but that relationship didn’t work out.

Then they found Vermont Business Brokers, run by John and Sharon Beal in Charlotte.

“John and Sharon were on target from the beginning,” Richard says, adding that Sharon brought a series of prospective buyers, all of whom were motivated and qualified. But none were quite right.

One man wanted to buy it for his daughter as a present. No deal. “It may seem a little odd,” says Tina, “but although we were trying to sell our business, we were interviewing prospective buyers to see if they were the right match. We wouldn’t sell to just anyone. It was like selling your baby to someone else.”

Then, says Tina, Sharon put them in touch with Lucinda and Robert Bedard, who lived across the country in Washington state. Lucinda had 29 years of experience in natural foods and was devoted to the cause. “The first time I met them, I knew they were the ones,” she recalls. “It was a gut reaction.”

But finding the right buyers is just the beginning of a complicated, complex transaction. “As time went on,” Richard remembers, “it became clear that John Beal went far beyond being just a broker. He understood the whole thing, including the accounting and tax consequences. A lot of issues came up, but John was always there to guide us.” It took over a year, but on July 25, 2011, the deal went through.

The Beals know the trauma of selling a business, because they went through it themselves.

Natives of Newburgh, N.Y., they grew up in the same neighborhood. When they married in 1979, Sharon, a graduate of the former Ladycliff College in Highland Falls, N.Y., was working for her father’s Lincoln-Mercury Nissan dealership in Newburgh. John had graduated from Mount St. Mary College in Newburgh and was working in the ski business. He joined the car dealership in 1980.

By 1993, Sharon’s father was ready to retire and the Beals helped him sell the dealership. Wanting to move to Vermont to raise their children — then 13 and 10 — they contacted Vermont Business Brokers (founded in 1983), through which they made offers on a few businesses that didn’t pan out.

Alan Mansfield of Vermont Business Brokers asked John if he would be interested in buying out his partner, Eric Stavrand, who wanted to retire. In early 1995, John did, an in 1998, when Mansfield retired, the Beals bought him out, too, becoming sole owners.

They moved the business from Blair Park in Williston to Shelburne Road in Shelburne and, in 2008, to a gorgeously restored 1812 tavern on Churchill Road in Charlotte.

Their walls are graced with Vermont art, while Ody (for Odysseus), their friendly Bernese mountain dog, lolls on the floor. “He’s our public relations manager,” Sharon jokes.

For a few years, the Beals thought the perfect opportunity might come their way at Vermont Business Brokers and they could purchase that business themselves, as they had initially planned to do. Gradually, it dawned on them that they had already found the perfect business for them. Brokering the purchase and sale of a company was challenging, constantly changing, and extremely gratifying.

“We make people’s dreams come true,” Sharon says, “whether it is helping with retirement or the next chapter in their lives, while making them feel good about the new owners who are taking over the business.”

Although both partners know the ins and outs of the entire process from listing to closing, Sharon focuses on sales. Vermont Business Brokers usually represents the sellers, but she also gets to know potential buyers and their needs.

“People often come in looking for a particular kind of business. I help them find a fit for their needs and personalities that might not be what they were originally thinking of,” she says.

Many business owners — especially those who started the enterprise — want to make sure that buyers will carry on successfully and will retain veteran employees. Consequently, Sharon is a kind of business matchmaker.

Often once that match is made, she hands the transaction over to John, who shepherds the deal through various inevitable obstacles. “Selling and buying a business is not a cookie-cutter transaction like the purchase of a house,” he says. “It involves working with attorneys on both sides as well as accountants, the bank, and sometimes the Small Business Administration.

“I make sure all the information is transferred and forms filed in a timely manner. I have a checklist that covers as many as 85 items, including deposit accounts, insurance, utilities, employees, customers, vendors, inventories, tax ID numbers, the Vermont Department of Agriculture, the health department, fire and safety — the list goes on.”

As the closing date approaches, there is a kind of “snowball effect,” according to John. “There are so many details to address, and the stresses are high on everyone. I try to remain calm and keep everyone in line.”

In every deal, both sides experience what he calls “threshold anxiety” — i.e., cold feet. “The motivation to make the transaction work moves back and forth from buyer to seller, then back. It’s very predictable.” He laughs. “We really practice psychiatry without a license.”

The Beals’ first experience selling a business was selling Sharon’s father’s Lincoln-Mercury Nissan dealership in Newburgh, N.Y., when he retired.

Whatever can go wrong has gone wrong in the hundreds of deals that Vermont Business Brokers has midwived. There can be a last-minute change of heart, health issue, natural disaster, or economic slump.

For instance, David Rosen, owner of Adirondack Guide Boats in Ferrisburgh, thought he and his partner, founder Steve Kaulvack, had sold the boat-building business, but eight days before the closing the buyer backed out. “We were shocked,” Rosen says. “We were eight days from retirement!”

That didn’t faze John, who just said, “These things happen,” and helped to develop Plan B.

“The original deal was an asset sale, but ultimately I did a stock sale, buying out my partner, who will still work at the business,” Rosen says. “It would never have happened if John and Sharon hadn’t guided us through. They have the skill set to make it happen, even as they remain humorous and humane.”

It helped that Kaulvack was good friends with Eric Chittenden, who had sold Cold Hollow Cider Mill in Waterbury Center through Vermont Business Brokers in 1999, and who gave the Beals a thumbs-up reference.

Because things had gone sour with the original sale, John told Rosen to forget paying the agreed-upon commission. He would just charge on an hourly basis.

“He billed us for $5,000,” Rosen says. “I insisted on paying him $9.000. He deserved so much more for what he did.”

Unlike the standard fees charged by Realtors, there is no set commission fee for business brokers. The commission is negotiated with each client when a listing contract is executed, based on a number of conditions such as complexity, marketing, requirements, and time frame. It can range from 7 to 50 percent.

Dave Kraft, the SBA relationship manager at KeyBank, helps facilitate business sales in five states, and he ranks the Beals among the best brokers he has worked with. “John and Sharon are interested in the success of a business after it’s sold. They don’t want anyone to be unhappy.

“I get the feeling with John that he’s not trying to sell anybody anything. He’s just trying to coordinate someone’s baby leaving the nest. It’s not about him and the almighty dollar.”

Whatever the agreed-upon amount, the commission isn’t really the most important factor in choosing a business broker. It’s whether the personality and approach of the brokers fit the clients.

There are plenty of competitors who work in Vermont, so there are others to choose from. But word-of-mouth from satisfied customers, plus a website in place since 1994 and judicious advertising, keeps Vermont Business Brokers busy with around 15 to 30 businesses for sale at any given time. “We rarely go after listings,” says John. “They come to us.”

Patience is key to success. “I’ve worked with some businesses as long as 10 years before we list them,” John says. He works with the potential client, advising on what to fix, plans for the future, and customer bases. “We tweak this and that. Then when it’s ready, we put it on the market, and it generally sells quickly.”

Confidentiality is essential to a trusting relationship. People share personal and company-related information, secure in the knowledge that the Beals will not reveal it to anyone.

Vermont Business Brokers handles its share of country stores (they helped sell the Shelburne Country Store in 2007), but it has sold all kinds of enterprises, from restaurants to warehouses to manufacturers.

The businesses generally employ fewer than 50 people. Retirement is the primary reason for sales, but other factors can arise, such as a partnership dispute, divorce, illness, or a spouse’s relocating for a job.

The Beals treat each client as a unique case, while applying their wisdom and experience to overcome obstacles as they arise. They love doing business in Vermont.

“When we tell potential buyers from out of state that we live five miles from our office,” says Sharon, “they figure it takes us an hour to get there through traffic. They’re impressed that it takes us five minutes.” •