Case Study 9 Sea Breeze Property Services

c. Explain the three main methods that the Higgins can use to determine a reasonable value for Seabreeze Property Services. Are there variations within these main methods of business valuation? (Please answer in 3 bullet points plus another 1 to 2 se

ntences to explain.)

Case 9 Seabreeze Property Services Should these young family members a commercial landscaping and snow removal company in Portland, Maine? purchase tight cancer 2 round Portland The long price is within the range that the younger base The Kellys have no canabase of these are properties they enter pb scheda Sesame board in the office. The Higgs note that most of the pay's employees have been forcon J. Les Higgins 31. his wife Trish. 30. and his brother Palmer. exactly wha to do and Kapa of the knowledge the heads. If they bey Seabrecze Prop Scices, the mora hane grown weary of their work in the imestment indus- that transferring all of that incledge and como a Greenwich Connecticut and are searching for the nighu Pesures to purchase Like many other young people, they are computer datahese will be esta looking to capitalize on a significant trend: purchasing a busi- The young per proach to nga besine which involves keeping the caricato nes from an entrepreneur of the Baby Boom Generation who has built a successful company and is ready to retire but has its day-to-day opens is het te keys bothered by it. In fact the Kellys have talked to as po no one to whom to hand the reins Trishays she has spent her are analyzing companies and crunching numbers but now bayas Over the last scalyzes bal has found a good is to become a business owner so that she can contribute with anyone to could take Sacze Propea Sabbe and become a business leader in a community. ned level. They have been impressed with the He The trio started their search in the typical way. They agamalzad fire backgrounds and oped how to buy a business into Google and discovered they have described for increasing the copy's sales sastounding array of options. Initially, their search param- The Higginses e moving forwarders for SETS were very broad, and their price range was between S3 purchasing Seabreeze Property Services, but they are $10 million, which would enable them to use their own two other businesses in mind a specialty add muscy and investments from family members and friends. Tishing company in Atlanta anda food marca in Bisa They were willing to move almost anywhere in the United Columbia just in case the cenot strike a stable deal States, and they preferred a service business rather than a Questions manufacturing or retail operation. They also wanted to pur- case a company in which the current owner would be will- 1. What advantages do basmess buys such as the Hig- me to stay on to help the new owners manage i ginses gain over starting a business from scrach? As they researched potential candidates, they realized What disadvantages do they typically acom that their best option would be a business that has performed 2. What stops do you recommend the Higginsostale to well financially over time, provides a service in a niche conduct their due diligence on Seabreeze Propaay Sea- market and faces little competition. They spent a year re- vices concoming the seller's motivation asset valtion arching more than 1.000 potential companies, which they legal issues, and the company's financial condition? stowed down to 75 prospects. After holding conference Do you spot any red flags about this potential deal? calls with the owners of those 75 companies, they filtered 3. Explain the various methods that the Higginses cause their list to 10 businesses that were spread across the country. to determine a reasonable value for Seabrecze Property from Nevada to Cape Cod, and were in industries as varied as Services cient planning and conveyor belt maintenance. Most of the 4. In addition to investing their own money and tapping sellers fell into one of two groups: owners who were about to the capital of family members and friends what other retire but had neglected to put into place a succession plan. sources of capital should the Higginses explore if they and owners in their 40s or early 50s who had experience in decide to purchase Seabreeze Property Services? their particular fields but lacked the management and finan- 5. What advice can you offer the Higginses about nego- cal acumen to grow their businesses in a significant way. tiating a deal with the Kellys to purchase Seabrezze One of the most promising companies the three young en- Froperty Services? Leprecars are considering buying is Seabreeze Property Ser- nice a commercial landscaping and snow removal company Source Based on Alina Tugend Buying a Sea Bess? The n Portland. Maine. John and Pete Kelly, who have owned the Hard Work Is Only Just Beeing. Now York Ton March 17.2016 company for 20 years, are not ready to retire (John is 51, and p. B4: Alina Tugcad A Pah for Empecan When a Sibs Pee is 46), but they want to see their company expand beyond the Goal." New York Times, September 9, 2015, .com/2015/09/10/bsessmallbuse be base of commercial customers that Scabreeze serves in a companies.html?_r=0 809