Think you know your three R’s? No, not those you learned in school. When it comes to buying a business, it pays to be ready, realistic and resilient–like the new owner of St James Gate Olde Irish Restaurant and Pub, Shane Charania.
Shane wasn’t typical of the individuals that walk into Sunbelt’s offices wanting to buy a business. He was young but experienced. Most aren’t–some 90% have never owned a business before.
Shane had a good sense of what he wanted: a small- to medium-sized business that he could fine-tune to create the lifestyle and income he wanted. He was prepared to wait for the right opportunity. And when Sunbelt found his “match”, he was ready to act.
In late spring, Greg Kells was approached by Stan Clarke, then owner of the St James Gate Restaurant and Pub in Carleton Place, an Ottawa Valley town of nearly 10,000. The owner indicated he had health issues requiring him to quickly sell the business. In fact, he told Greg, if it wasn’t sold by September, he’d have to close the doors.
Selling a business usually takes three to nine months. September was only three months away.
Greg took the engagement and packaged the business with the assistance of Stan and his wife, Francine. Within two weeks it was ready to go to market and Greg called Shane with the news: “I have a business that’s just right for you.”
How did he know?
“Shane has excellent customer relationship skills, good management skills, restaurant and bar experience and wanted a business that is not all-consuming. With his background, I could see him doing great things with this business,” says Greg.
“We invite prospective buyers to our offices for more information. That’s so we can assess their skills, interests, financial resources and experience as well as their personal and financial goals. And that lets us pre-screen businesses to find the ideal fit. If we don’t have it now, we may find it in the near future.”
So it was with Shane Charania. Shane knows the value of being patient to get what you want. He was willing to wait for his ideal fit.
Shane also knows what it takes to be successful in small business. In fact, he says his blood runs with business. He recalls sitting in the corner of his dad’s store at 10 years of age, as his dad fixed watches. Shane wasn’t content just to observe. Replacing batteries became one of his skills. Before long, he was earning money at it.
“It wasn’t more than a couple of dollars per day, after I paid for bus travel both ways and my lunch,” Shane laughs. “I would spend all Saturday there. I loved it. I was fascinated by the interchange of products and services for money.”
Buy when you’re ready
Shane honed his knowledge of business over the years that followed as he worked at various jobs. Advice he gives to anyone considering buying a business: “Be a manager of a business first. Get a feel for it. Treat it as your own. It’s nothing you can really learn in school.”
“You’ve got to know what you’re getting into and you’ve got to it take it seriously– it affects a lot of people,” he continues.
Shane came close to purchasing another business before St James became available, but that deal dissolved at due diligence. He had counted on raising some of the purchase price through a Canada Small Business Loan, however the banks have a policy not to fund acquisitions that are done as a share transaction, as that purchase happened to be structured.
Financing is often a challenge, notes Greg. “Buyers rarely get a bank loan unless they have significant assets as collateral. Shane had enough to buy that business but needed more to handle the cash flow for the first few months so we did not complete the purchase. I assured him that another business would come to the fore, one that would be within his means without using a bank loan and would still provide the challenge, income, and lifestyle he sought.”
That was the case with the Carleton Place pub, where the owner was willing to finance 50% of the acquisition.
For Shane, St. James Gate was a natural choice. He’d already gained considerable experience in the restaurant/bar industry, including managing a few places on Ottawa’s Byward Market.
Since taking over in July, Shane has focused on strengthening the business–tightening the internal workings, making minor procedural and operational changes, emphasizing quality in all aspects and adding some of his mothers special dishes to the menu. He stands by key advice his father gave him – pay attention to what goes out the back door.
“You have to think frugal every day.”
Shane is finding St. James Gate a great fit. In his life a small business is perfect. As he puts it, “big boats are much harder to navigate”.
“Only take on what you’re capable of doing, what you want to do.”
In his case, Shane made sure he also has time for another of his passions–day trading.
Greg says the key is to find the right “opportunity” for you to make it your perfect business. Start looking three months before you want to buy and be ready to act quickly.
“The previous owner’s medical treatments are going well,” Greg adds. “It was hard for Francine and Stan to leave the business; most of the clients had become good friends over the years. On the other hand, Stan’s health was more important.”