There’s an old saying: “The two happiest days of a business owner’s life are when they start the business and when they sell it.”
I started and owned a retail locksmith service for 16 years in a major market during the pre-scammer era. I remember the thrill of seeing my company name in the Yellow Pages for the first time. (For those who don’t remember, the Yellow Pages was a yellow book that would be delivered to your house or business that displayed ads for goods and services.)
A few years passed, and I started to see some profit. I’d managed to make it through the first few years in business and now made enough to take a salary. Good times!
In truth, I generally had good years, with slow but steadily increasing profits. But 10 years into my venture, working 70 hours per week, evenings and weekends started to wear on me. I began to show signs of wanderlust — that itch to move on to something else.
When I started my business, my intention was to improve the quality of my and my family’s life. Financially that happened, but unfortunately, I didn’t have much spare time to enjoy the fruits of my labor.
I don’t mean to whine here; I was glad to be in the black. I just didn’t know how to balance my work and personal life. How bad was it? I even booked service calls during the birth of one of my children.
My drive to make things happen reached an absurd level when I began to criticize my cats for lying around. I would think, how are these cats contributing to this family? Go catch some mice or something! It’s a sad day when you envy your pet’s lifestyle.
Another five years passed in similar fashion, and I realized I had to make a change — not just think about it this time but really do it. It was satisfying to live out my dream of being my own boss, but the time had come: It was time to sell my business.
Making the Sale
It still wasn’t an easy decision, but I came up with two main reasons to sell my business:
- The city where I had established my business steadily was becoming more overcrowded. That was great for business but bad for getting around in a timely manner.
- I wanted to spend more time with my family.
Now came the tricky part: How do I sell my business?
My father had sold his locksmith business when I was younger, but I wasn’t privy to any of the details, and he no longer was alive when it came time to sell mine. I didn’t know anyone else who had sold a business who might be able to advise me.
From time to time, I received letters from business brokers, asking whether I wanted to sell my business. I thought this would be a great place to start. I listed my company with a broker and met a dozen potential buyers, but none panned out. When the contract with the broker expired, I concluded I could take what I’d learned and sell my company myself.
What was learned?
How to price a locksmith business:
I learned that a fair price starts at 1-1/2 times the annual gross income. This is for the purchase of the business name, the accounts and phone number, and the multiplier could be adjusted based on location.
Then, total up the value of your inventory and additional equipment, such as safe dollies, safe trailers, tools and pallet jacks, and add this to the total. You might want to keep some equipment and your vehicle if you want to start another business or work as a subcontractor in another city. However, if you’re ready to step away completely from the industry, price and sell everything.
If you don’t want to handle this yourself, a business broker could value your business for a flat fee, with you finding a buyer.
How to find the right buyer:
My father sold his business to one of his employees. This is typically what happens in the industry, but, as a sole proprietor, it wasn’t an option in my case.
My buyer was an acquaintance from church who worked as a middle manager at an electronics firm. His plant was closing, with the company relocating employees to another state. The buyer left the company with a handsome buyout, which was used to buy my customer base. However, he had no locksmith training.
Depending on the size of your business and whether you have employees, it would be challenging for someone to purchase a locksmith business without being a locksmith. The Flying Locksmith sells franchises to folks who have no physical-security background, but it provides training for the franchisee.
This is something you can add to the sales price or as an additional moneymaker afterward. I trained my buyer at no extra cost. I had them on the road with me once per week for six months before the sale was final.
After the Sale
When I left my business after 16 years, I started another business and completely reinvented myself. I purchased an old carriage barn on 10 acres that had been a long-closed garden center. After remodeling and renovating was finished, it was reopened as an event-type business that had mini botanical gardens.
Unfortunately, three years into my new venture, the building bubble burst, which caused sales to tank. Falling back on my trade knowledge, I took a job at a nearby university as an institutional locksmith.
Although it represented a return to my old discipline, it wasn’t a return to my old life. This job was 40 hours per week, with no weekends and no night work. It supplied my family with insurance and a supplemental income to get me through a difficult time.
However, the event business never took off, even after the economy recovered. I had taken the university job thinking it would be a stop-gap measure, but it became my primary income for the preceding five years. Then, a key shop supervisor job opened at another university, and I took that. I have worked there since.
Working in higher education has been a great fit for me and my family. Not working 70 hours per week has opened time to be a locksmith instructor for ALOA. Now I teach institutional locksmith classes that include testing for credentialing.
That’s my story. What’s yours? I would love to hear from you!
Steve Fryman, CRL, CAI, CISM, is the key compliance manager at Florida State University. He
can be emailed at [email protected].
