Who wouldn’t want to live in Kansas? It’s a beautiful state with gorgeous scenery, baseball’s Royals and football’s Chiefs, the Museum of World Treasures, the Great Plains, stunning landscapes and, most importantly, very, very nice people.
But let’s face it: most of the state is rural. Kansas isn’t exactly Silicon Valley, New York, Austin or Miami or any number of places that routinely attract new businesses. And when existing businesses shut down oftentimes they are not replaced. As business owners in Kansas grow older (like the rest of the country), many desire to retire and sell their companies. Unfortunately, many of these would-be sellers–particularly the ones in the more rural parts of the state–are having a hard time attracting good buyers, let alone brokers to represent them. This is not good for them or the state’s economy.
But there’s hope. As reported in Yes Magazine, a non-profit organization supported by the University of Kansas is playing a growing role in matching those Kansasans who want to sell their business with would be buyers. Best of all – the matchmaking service is free.
Doug Funk, for example, has run his pharmacy in Concordia, Ks. (population 5,000) since 1985. Now in his 50’s, Funk is considering retirement. Unfortunately, Funk found it tough to hire a traditional business broker, who tend to stick to larger, more populated areas. Potential buyers of his business were, to him, undesirable.
“They basically wanted to steal it from me,” Funk says in Yes Magazine. “They wanted to pay a lot less than what it was worth.”
That’s when he stumbled on to the RedTire (it stands for Redefine Your Retirement) program. The organization helped bring together Funk and Robb Rosenbaum, who eventually bought the pharmacy. RedTire helped Rosenbaum smooth the transition of moving his family from a much larger city to small town Kansas life.
That’s what RedTire does – they help with appraisals, vetting the buyer and offering counsel on a deal with the goal of brokering the fairest transaction possible for both sides. The organization brokered 27 business deals through last December–deals that have effected 200 employees. Their growth has been significant.
According to Steve Kelly, vice president of economic development at the Chamber of Commerce in Lawrence, Ks., some of those businesses would have disappeared. “Not only do you have a business owner that’s in a bad spot, you potentially put the whole community in a position of loss,” he told Yes Magazine.
The University of Kansas provides support but it’s not all altruistic. RedTire is offered as a free service to the university’s alumni and its business students participate to get real-life experience in business management. The university would like to share its model with others.
Seems like a pretty good idea for other states looking to keep its rural small businesses in business.