Page 25 - ARUBA TODAY

BUSINESS Thursday 28 March 2019
A25

Unpleasant surprises: Buying a company can bring challenges

By JOYCE M. ROSENBERG And even a veteran busi-
Associated Press ness owner can fall short
NEW YORK (AP) — When on due diligence. When
Matt Barber and Joel Doub Rob Basso learned in 2012
bought a fishing rod man- that a competing payroll
ufacturer two years ago, company was available,
the plan was for previous he thought, "we can't pass
owner Tom Morgan to stay this up."
with the business for five But when Basso started to
years to mentor them. But combine the business and
six months after the deal his firm, Advantage Payroll,
closed, Morgan died unex- he encountered an unco-
pectedly. operative new staff and
"It forced us to sink or swim two hard-to-integrate soft-
and accelerated our learn- ware systems and sets of
ing curve," says Barber, vendors. It took more work
co-owner of Tom Morgan than he expected.
Rodsmiths in Bozeman, "I wrongly estimated, prob-
Montana. "My approach ably because I didn't do
was, OK, here's a setback, some of the heavy lifting
let's put our heads down, I should have," says Bas-
stay positive and perse- so, whose company was
vere." based in Freeport, New
Small business owners can In this Sept. 15, 2017, photo co-owners of fishing rod manufacturer Tom Morgan Rodsmiths, Matt York.
Barber, left, and Joel Doub inspect a rod during the build process at the company in Bozeman,
face unexpected chal- Mont. It took about two years for
lenges after buying a com- Associated Press Basso and his managers
pany, whether they're im- to consolidate the com-
possible-to-foresee events Cynwyd, Pennsylvania. When Cathy Miron bought Miron says. She realizes she panies. They lost all 17 em-
such as Barber and Doub "You think you've figured eSilo, a data storage and needs to work at a "com- ployees of the acquired
experienced or problems out 80 or 90 percent, but recovery company, she fortable pace that you business and had to meld
that weren't apparent or there's always another 10 expected to use the firm's can sustain for the long- the software systems into
that prospective owners or 20 percent you can't cash flow to fund a refresh distance marathon that is one that would fit all the
didn't investigate. Among predict." and upgrade of the tech- business ownership." customers' needs. But the
them: defiant staffers, out- Barber and Doub hoped to nology. But eSilo turned Before buying a company, work paid off: Basso sold
dated technology and learn the craft of making fly out to need more work it's standard operating pro- the combined company
shaky finances. In each fishing rods from Morgan, as and more of an investment cedure to do what's called last year at a profit.
case, an owner must re- well as the nitty gritty of run- than Miron anticipated. due diligence, examining a The floral retailer Brad Dan-
group and figure out how ning the company. "I would Her vision was to begin in- company's books and talk- iel bought also seemed like
to overcome the obstacles. have relied on his expertise, troducing new products six ing to employees, custom- a great deal until he real-
Business advisers say it have him be the brains," months after the May 2018 ers and vendors to get a ized the company, formed
helps to go into a purchase says Barber, who estimates purchase. Now, it's looking sense of what the compa- from the previous merger
knowing there will be un- the loss of Morgan set the like she won't do that until ny needs. But, Marks says, of two businesses, had 250
knowns, surprises and dis- company's transition back this coming May. "when you're given the staffers who were in sepa-
appointments. by a year. But the partners "This is ironic, since my main numbers for the business, rate camps and didn't
"It's always a leap of faith received guidance and motivation for buying an you have to take them with want to work with one an-
that you're taking," says assistance from Morgan's established business with a grain of salt." Sellers who other. Daniel bought the
Gene Marks, owner of The wife, Gerri, the company's a 17-year history was the want to close a deal may company, which had 30
Marks Group, a small busi- vendors, customers and hope that I could bypass not reveal some of their is- stores in the Southeast, out
ness consulting firm in Bala even competitors. much of the early chaos," sues. of bankruptcy in 2001.q