JUDY WOODRUFF: Whether it's a Fortune 500 company or an office employing five people,
transitioning a business to a new owner has its challenges.
A program in Kansas is aimed at matching owners seeking to sell their business and those looking
for an opportunity.
It also provides welcome economic stability in some rural towns.
Peter Tubbs of Iowa Public Television explains for our regular business and economics segment,
Making Sense.
PETER TUBBS: Fifty-pound bags of pig feed are filled at Valley Feed & Supply in Bonner
Springs, Kansas.
The business had been owned by the Stubbs family for 90 years.
But, at age 60, Neal Stubbs was ready to sell.
But the process had some false starts.
NEAL STUBBS, Former Owner, Valley Feed & Supply: I'm not really sure how many people were -- ever
inquired about us, but, as far as getting to the point where we were actually having
discussions with them, Matt wasn't the first.
PETER TUBBS: Finding the eventual buyer with the financial ability to purchase the feed
mill was only half of the equation.
An understanding of the work was an even bigger hurdle.
The business at Valley Feed & Supply has evolved over the last 20 years.
Situated in the corridor between Kansas City and Topeka, the demand for hog and cattle
feed has declined as sales of horse and chicken feed have risen.
The loss of businesses like medical practices, ag-related businesses, and light manufacturing
can be debilitating to the viability of rural towns.
Wally Meyer is the director of RedTire, a program run by the business school at the
University of Kansas, that works to keep small businesses alive in rural communities.
WALLY MEYER, University of Kansas: RedTire is the link between retiring business owners,
or those who want to exit their business, and those who are qualified and capable of
taking over the business, with a benefit to the community of retaining the essential services
of the community, which is key to retaining quality of life in that community.
PETER TUBBS: Matt Laipple was looking to start an agricultural business, but wanted to avoid
the risks of starting a business from scratch.
MATT LAIPPLE, Owner, Valley Feed & Supply: The good thing about that is, you know, if
it's a successful business, you're not reinventing the wheel.
It's already there.
You just have to continue to keep that wheel turning.
PETER TUBBS: RedTire connected Matt Laipple with Neal Stubbs, the owner of Valley Feed
& Supply.
The sale was completed in 2018.
NEAL STUBBS: He definitely has an interest in agriculture.
He seemed to understand the type of work we do here better than a lot of people do.
Being a farmer himself, you know, he's familiar with heavy equipment, so -- which is kind
of what our mill out here is.
PETER TUBBS: Wally Meyer says the key part of any small business sale is the handoff.
WALLY MEYER: Businesses fail during a transition most commonly because customers get forgotten
or the process gets manipulated in a way that is not appropriate for the business.
DR.
DEEDRA TRUSCHINGER, Owner, Auburn Dental Clinic: I didn't do a whole lot of research.
PETER TUBBS: Dr. Deedra Truschinger bought a dental practice in auburn, Kansas in 2017.
To help smooth the transition, the retiring dentist spent more than a year on staff introducing
her to patients and teaching how the practice operated.
Now on her own, Dr. Truschinger has seen her patient list increase enough to require the
remodeling of a century-old bank building as a new, larger office.
But the financial side of her business was the intimidating part of the purchase, so,
for her, RedTire was invaluable.
DR.
DEEDRA TRUSCHINGER: They did so much research for me and provided so much data, I didn't
feel the need to go outside and get five different appraisals on what this practice was worth.
They were working both sides very honestly, and just trying to make a good, realistic
picture of what the value of the practice was.
PETER TUBBS: RedTire estimates there are 10,000 small businesses in Kansas and Missouri alone
whose owners are nearing retirement and lack a succession plan.
For many sellers, the program helps reduce anxiety.
WALLY MEYER: They need to get themselves to the psychological and emotional point that
they're able to walk away from the business.
And something that they have devoted 20 or 25 or 30 years of their life to, now, all
of a sudden, they're going to turn over the relationships with their customers and, of
course, the machinations of running their own business to somebody else.
So, having that emotional security to be able to do that, being at the right time of life
to be able to make that transition, that's really important.
PETER TUBBS: RedTire is a free service for both buyer and seller, supported by a federal
grant and the University of Kansas.
Since its start in 2012, all 60 businesses that have been sold through the program are
still in operation.
For the "PBS NewsHour," I'm Peter Tubbs in Bonner Springs, Kansas.