I could tell Bart (not his real name) was tired. He said he could not see himself still at work when the new Governor is inaugurated early next year. Bart is a lobbyist for several large corporate clients that are affected by laws and regulations going through Tennessee’s legislative assemblies. He has been a fixture in the hallways of the State Capitol for almost 30 years, loved and respected by almost everyone on both sides of the aisle.
Bart told me he didn’t want to work after the death of his wife last year. But, he was in the middle of a legislative session and couldn’t let down his long-term clients. Though he had a staff of four capable and experienced professionals, none of them held the influence and respect he did.
“Can you sell my practice?” Bart asked me over dinner in one of Nashville’s swankiest steak houses. “I’ve built a steady income, and clients come my way without me doing any marketing.” I could tell, Bart was used to living well. But I had to be the one to break it to him that selling a business that is, in large part, dependent on the presence of one individual is almost impossible to sell.
“But I don’t do all the work anymore,” Bart said in some protest when I explained the problem. “I have two lawyers who work for me and two very sharp long-term administrative assistants. I just show up and they tell me where to go.”
While Bart had wisely removed himself from the day-to-day running of his business, he was still the rainmaker — the one person to whom everyone looked for strategic guidance. I told him his best bet would be a two- to three-year transition plan with his existing employees to buy the practice from him. He said he had thought of that but, “they are young and don’t have the kind of money the practice is worth.”
Painfully, I had to explain that the “worth” of a business is subjective and in large part based on the sustainability of the business without the presence of the owner/seller. For Bart to receive much (if any) “value” for his practice, he is going to have to participate in a transition long enough for a buyer to feel comfortable the corporate clients will stay with the practice after he is gone. Bart might end working through the first couple of years of a new administration, but that’s the result of not planning for his retirement in advance. It was tough news over a wonderful dinner, hard to swallow indeed.
JIM CUMBEE is President of Tennessee Valley Group, Inc. a retainer-based business brokerage and transition mediation firm in Franklin, TN. Cumbee is an attorney and has an MBA from Harvard Business School. Jim is the author of Home Run, A Pro’s Guide to Selling a Business. https://www.amazon.com/Home-Pros-Guide-Selling-Business/dp/1599329239 . He has a wide range of corporate and entrepreneurial experiences that make him one of the most sought-after business transition advisors in the state of Tennessee. The names and fact patterns above have been changed to preserve the parties’ identities.
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