Whatever your timeline for retirement looks like, there’s no better time than now to start planning for the succession of your business. That’s because it can take time to get the business ready for the sale and find the right buyer if family succession isn’t in the cards.
Cheryl Denham
For instance, Brad and Cheryl Denham made sure their business, Arizona Family Florist in Phoenix, was debt free by the time they wanted to sell — and they turned down several offers until they found the right person.
“We were really particular about who we felt would be the right fit for our business because it’s kind of like having your own child,” says Cheryl. “You nurture it. You have employees you love and want to make sure they are taken care of.”
Cheryl and other floral business owners who recently sold or bought floral businesses will talk candidly about planning for and executing a successful sale at SAF Phoenix 2023, the Society of American Florists’ 138th annual convention Sept. 6-9. The session, “What’s Your Exit Strategy?,” will offer insight into how to prepare a business for sale and identify the right buyer. It will also address the emotional aspect of selling. Another session, “Blueprint for Family Succession,” focuses on how floral industry families have successfully passed the torch to the next generation.
Getting Ready
Kevin McCarthy, Family Flowers
Kevin McCarthy, a buyer and president of Family Flowers, which owns about 20 shops in 10 states, says the first thing business owners should know is their numbers.
“For us, it starts with knowing the numbers and making sure that the stores themselves know their numbers,” he says. “There are so many operators who don’t have that , so knowing your numbers at least three years is very helpful.”
It’s also helpful to know how much of the business is wire versus local, what percentage of sales happens online, and the percentage of event or sympathy work. He also says it is good to have an idea of what happens to the real estate: Will the owners rent the real estate to the buyer, or sell it?
Finding a Buyer
Sally and John Kobylinski
Like the Denhams, John and Sally Kobylinski, who recently sold In Bloom Florist in Orlando, turned down multiple potential buyers, and even killed a deal last-minute with a buyer when their gut told them it wasn’t the right move, in their quest to find someone who was a perfect fit for their business and employees.
When they did find the right buyer, they did everything they could to make sure their 75 employees would be cared for — and to help the new owner.
“We really tried hard to have a good group of managers that the new owner could rely on,” Sally says.
Saying Goodbye
Lisa Hays Holmes, Tiger Lily
The Denhams and Kobylinskis kept the sale quiet until the paperwork was signed. Then, they told their employees.
“When I announced it to everyone, it was super emotional,” Cheryl says. “Your staff becomes your family and you spend more time with them than you probably do with a lot of your family members. And so for me, it was almost like I almost kind of went through a grieving period when I left.”
Cheryl and John both stayed on payroll to help staff and the new owners transition — something that McCarthy, as a buyer, says he often appreciates. It’s also common for some former owners to remain as employees for years, McCarthy says.
“That’s always a great scenario when that happens because they love the industry — they can’t get away from it — but they just want to slow down a little bit,” he says.
For more on succession planning, register for SAF Phoenix 2023, and check out the cover story in the January/February issue of Floral Management.
Amanda Jedlinsky is the managing editor of SAF NOW.