Small Business and Franchise Success Stories

The economic downturn has affected businesses large and small in every sector, and buying a small business or franchise can seem riskier than ever. Some small business owners who bought before the downturn and who remain optimistic about the future have good advice for business buyers. Gary Henricksen, owner of Vermont-based Mail Rite, is one of those owners who recognize the long-term benefits of business ownership, even in a tough economy.
Henricksen spent over two decades in corporate America in companies around the country. He had considered buying a small business for six years before actually taking the leap. Within those six years, Henricksen went through two mergers that completely changed or eliminated his position. After years of moving, he and his wife were eager to stay in place for once, and this was one of the primary inspirations for Henricksen’s decision to purchase Mail Rite, a print and mass mailing service, in 2007.

“I was committed to not moving, and so I was looking for a business of an affordable size with a business model that had some relationship to my experience. I have been a marketing executive for 25 years and therefore a consumer of direct-mail services, and I felt that I had some sympathy for the customers. I didn’t want business-to-consumer, and this was a business-to-business opportunity, within an affordable range and within commuting distance.”

Because of the limited number of businesses for sale in his area, finding a small business to purchase was perhaps the easier part of the process of becoming an independent business owner. His wife was happy to stay in Vermont, but the loss of corporate benefits worried her. Still, she supported Henricksen in light of the alternatives. The biggest adjustments were yet to come, though, as Henricksen soon found out that being the president in a corporation was much different than being the owner of a business.

“I was used to running much larger operations with a lot of staff, a lot of capability. There was a lot of cash flow in the biotech business where I worked, and as senior manager I spent my time managing other managers, managing departments. When you come from a background like that into a small business with only 20 employees, you quickly find that your life at work has completely changed. It took me about six months to realize that I couldn’t spend my time just managing my spreadsheets and corporate policies. I most needed to get on the road and sell. That is one’s most important role as president of a small company: to be in front of customers.”

Henricksen’s salesmanship and leadership became all the more important when the recession hit. The company saw profits drop to three quarters before stabilizing, and even as Mail Rite’s clientele has grown to around 300 businesses and organizations, older customers are scaling back on their spending so that even now the company’s margins have not yet climbed back to where they were before the downturn. This stability has been maintained in part through Henricksen’s decisions to add color-printing services, which have increased some customers’ spending, and to cut less productive staff. This is never an easy decision to make, but Henricksen has seen quite clearly that it was the right one.

“There were some people who weren’t pulling their weight, and many staff had long wished that something would be done about that. When times got tough it was especially important for the staff that we protect the most productive and energetic people and make smart investments that didn’t damage our cash flow, and which will help us in the future. That’s been important to the most intelligent, energetic staff that we have.”

Henricksen’s views about the state of the market are quite practical. “I would say that part of it is that people are just happy to have a job and have stuck around in a more demanding environment without pay increases or bonuses.” Henricksen himself bought the company because he wanted more stability and control of his destiny, but he reminds potential small business owners that, “when you own your own business, you’re still subject to market forces, so you’re not completely in charge of your destiny.”

Having better control and more options when he decided to buy a small business were motivating factors in his choice to use Guidant’s 401(k) Small Business Financing.

To people who are considering buying a small business, Henricksen makes one of the most essential points, one which he and many other small business owners have learned through experience:

“When I talk to other small business owners who have done the same thing, they all agree that you have to expect discouraging times during the first several years, but when you get the business operating as you want it, it can be very exciting and very pleasurable. But that can take years.”

During that time, debt can be a major issue for small business owners who buy their businesses by borrowing. Hendricksen explains, “Make sure that you don’t take on too much debt, because you have to be prepared no matter how optimistic you feel about how the business is going to perform. You must be prepared for the possibility that things won’t go well at some point so you need to make sure that you will still be able to make those debt payments. That’s an argument in my view for putting more money into the business when you buy it versus borrowing more money. The more that you can keep your debt down when you buy a business, the better off you’re going to be.”

Regarding his experience with Guidant Financial Group, Hendricksen gives a highly positive review. “During the process, I felt that I got a lot of good guidance. It went smoothly and I felt that the cost was very reasonable, so to anybody who feels that they want to go down this path, I would definitely recommend working with Guidant.”


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