“Treat your business like a business.”
In the end, it pays off.
Take that advice from Nestor Romanuck, former owner of Promotion Tours of Edmonton.
That’s exactly what he did, then when it came time to sell Promotion Tours through Sunbelt Business Brokers, he ended up with a solid deal.
One Company Idea Gives Birth to a Second
In 1985, Nestor’s brother, Wally, had started Promotion Tours in Saskatoon. Initially, the business offered shopping excursions by bus to West Edmonton Mall. For the next ten years, the tour company grew, adding more destinations and customers. But then in 1995 after 10 years of relative success, Wally closed down the company for personal reasons.
In 2001, Nestor had a change of jobs. At the same time, he also caught the entrepreneurial bug. Promotion Tours was reborn, initially taking people to the casinos of Laughlin, Las Vegas, and Moose Jaw. (Yes, Moose Jaw, Saskatchewan, a city that was banking on its new casino and on its renovated hot springs facility.) The company grew by reputation and word of mouth. By 2013, Promotion Tours was handling 47 tours a year to destinations from Arizona to Atlantic Canada (and yes, still to Moose Jaw!).
Growth Leads to a Big Decision
Nestor saw his company grow beyond his expectations—and possibly beyond his desire to take the company to the next level. Not uncommon among successful small businesses, decision time finally arrived: to close the company, to continue to grow the company, or to pass the company onto someone who can make it grow.
Because Promotion Tours was so successful, winding the company down seemed unthinkable. After all, the company had valuable good will with strong revenues, respectable profits, and good cash flow. Nestor met with his lawyer and his accountant. Together they determined that Promotion Tours could get a good price when sold.
The Price Is Right
Now what? Nestor wondered how he would sell the business. A friend of his had heard about Sunbelt, a company previously unknown to Nestor. In the fall of 2013, Nestor met with Michael McCulloch, Sunbelt broker and owner of their Edmonton office. Michael reviewed the company’s finances and sought additional outside opinion. A valuation was set.
Michael took on the challenge of selling a type of business that he had never sold before, maintaining his interest and enthusiasm throughout the selling process. According to Nestor, “Michael worked hard to build the case for a company with no physical assets, but with lots of other things going for it.”
Finding the Fit
Initially, Michael tried to find a buyer who had experience in the travel industry. A competitor in the tour business did take some interest, but in the end, backed off. As it happened, another entrepreneur from a totally unrelated industry came forward. While the prospective buyer did not have experience in the travel industry, he brought lots of business savvy to the deal.
The deal was closed in September 2014. With help from Michael and the offices of Sunbelt, Nestor secured a good price. The buyer even bought all the shares of the company from Nestor, making the deal sweet and clean.
Growth Makes a Move
So where is Promotion Tours now, just months after the sale? Doing very well with a bright future, thank you very much! The office for Promotion Tours has moved into a new office and the new owner is doing what needs to be done to grow the business.
Part of this encouraging start is owed to Nestor’s continuing presence. As part of the sale agreement, Nestor will help out as a tour guide and as a resource person to make the transition smooth.
No Shoe Box Here
“Keep all records,” advises Nestor. Treat your business like a business: Shoe box accounts won’t cut it. “Show all your financials,” he added. Because Nestor had run such an open operation, Michael, as the business broker, had a much easier job of selling Promotion Tours at a good price.
Help Where and When It Was Needed
“Michael did his homework,” said Nestor. Because Promotion Tours was in a new category of business for his office, Michael worked diligently to promote the tour company, and in the end a buyer from Sunbelt’s existing database stepped forward to acquire it.
Nestor added, “Michael built a case to sell my company at the best price possible.”
Michael was a “joy to work with. He gets the job done with his own brand of selling.”