the "Headline That Caught My Attention or the WTF" thread

Avenger said:
The funeral industry has been doing that for a very long time. Where it's taking off that I wasn't expecting is dental.
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Been a long time in that industry. I have been involved with a few of those. Along with specialists, too. You would be surprised. Think hospitals buying private practices. Not exactly private equity, but the model is the same. Just different for tax purposes and how it gets accomplished. Think capital gain treatment vs ordinary income and how that would be equalized for the transaction to "work". I cut my teeth on one of these many years ago before it was in vogue.
 
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Roccus7 said:
Interesting piece regarding small, family business' owners retiring and cashing out, much to the chagrin of long-time customers. We're all seeing it and it's not a pretty sight...

Baby Boomers Are Retiring in Droves. Private Equity Is Waiting.
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Well, what choice are they left with? Most business owners I know facing this situation are left with little choice at times. Many have not saved in traditional ways, think 401k etc. Every dollar went into the business and the thought was "one day when I retire" the sale of my business will fund that retirement. Trouble is, there may be few buyers, or at least for the funds needed to retire. The business may not have kept up in the industry for a private buyer. Next would be try and sell to the folks working for you. News flash - this generation does not want to own, they want to leave and let the problems of the day fall on someone else. They do not want to work. They do not believe in themselves, otherwise depending on the business, may not see or want to see the opportunities. A lot of times there is no entrepreneurial spark in these folks.

Now to the flip side. The business owner took every dime out of the business and did not build for the future. They paid just enough to keep people working and the folks with some spirit moved on to other jobs. Finally, the business owner may find they can get many times more from private equity than even the business could provide. So they follow the money.

I could write for a long time on this topic.
 
longcast said:
Well, what choice are they left with? Most business owners I know facing this situation are left with little choice at times. Many have not saved in traditional ways, think 401k etc. Every dollar went into the business and the thought was "one day when I retire" the sale of my business will fund that retirement. Trouble is, there may be few buyers, or at least for the funds needed to retire. The business may not have kept up in the industry for a private buyer. Next would be try and sell to the folks working for you. News flash - this generation does not want to own, they want to leave and let the problems of the day fall on someone else. They do not want to work. They do not believe in themselves, otherwise depending on the business, may not see or want to see the opportunities. A lot of times there is no entrepreneurial spark in these folks.

Now to the flip side. The business owner took every dime out of the business and did not build for the future. They paid just enough to keep people working and the folks with some spirit moved on to other jobs. Finally, the business owner may find they can get many times more from private equity than even the business could provide. So they follow the money.

I could write for a long time on this topic.
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Oh, I know, a definite double edged sword. I don't fault anyone selling out, but in the long run, it's usually the long-term, loyal customers who will get the shaft.

When a small local business sells out in rural areas where they're the only game for an over a 90 minute radius, if private equity group changes the business model, e.g. Orient by the Sea marina or buying a struggling marina with a great location to kill the business and put up condos, the local, loyal boat owners are left in the lurch.
 
Roccus7 said:
Oh, I know, a definite double edged sword. I don't fault anyone selling out, but in the long run, it's usually the long-term, loyal customers who will get the shaft.

When a small local business sells out in rural areas where they're the only game for an over a 90 minute radius, if private equity group changes the business model, e.g. Orient by the Sea marina or buying a struggling marina with a great location to kill the business and put up condos, the local, loyal boat owners are left in the lurch.
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Like farmers, land rich, cash poor. You know what happens to the land if they sell!!
 
longcast said:
Like farmers, land rich, cash poor. You know what happens to the land if they sell!!
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That assumes land rich businesses. What about successful retail businesses that lease small businesses in the middle of small town USA? They go belly up and people have to go to the big box stores. Used to have a small hardware store 1.5 miles from my house, RIP, Lowes is 90 miles roundtrip...
 
Roccus7 said:
That assumes land rich businesses. What about successful retail businesses that lease small businesses in the middle of small town USA? They go belly up and people have to go to the big box stores. Used to have a small hardware store 1.5 miles from my house, RIP, Lowes is 90 miles roundtrip...
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One more time I'm going to point out the other side of the coin.

If all the local folk who "loved" the local store took the effort to always buy there it would probably still be a viable business.

Also, maybe visit the early history of Sears & Roebuck. They were the Amazon-ian disruptor of their day, forcing little General Stores out of business. Funny how they were eclipsed by someone using their own business model.
 

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