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It’s
mid-afternoon on a day riddled with dozens of small headaches.
I’ve spent the better part of the afternoon chasing a client
for the $2,000 she owes me; two of my best DJs just called
in sick with the flu and I can’t find replacements. It looks
like I’ll be missing my parent’s anniversary party this
weekend.
People
always think that owning your own business means you also
own your time. With a staff of 30, 16 sound systems and
a couple of vans, for me nothing is further from the truth.
"Mark?"
My assistant calls from outside my door. "Mr. Jones
from A-1 Entertainment is on the phone. He called earlier
saying something about wanting to do business with you.
Do you want to take it?"
"Sure,
put him through."
"Hi
Mark. This is Bob Jones from A-1 Entertainment. If your
schedule looks anything like mine, you don’t have a lot
of time to spare. I’ll get right to the point. I’m interested
in buying your company."
"I’m
sorry. Could you repeat that?" I said. "You’re
interested in what?"
"Buying
your company, Mark. Oh, I know this is a little unexpected.
I own an entertainment corporation out here on the West
Coast. My company found yours over the Internet and…"
Fifteen
minutes later, I’d forgotten all about sick DJs. Mr. Jones
wants to buy my company. I couldn’t even begin to
make sense of it. In this day and age of corporate takeovers,
I guess the proposal isn’t so out of the ordinary,
but it was a classic case of "It could never happen
to me."
One
week later, I’m on a plane heading for A-1’s corporate offices
on the opposite coast. After landing, I’m standing by the
curb outside the terminal. I look up from my newspaper to
find Mr. Jones, alone, struggling to shut off his car alarm
– not exactly my image of a stuffy corporate head.
"Can
you believe this? Just got this car not even two weeks ago
and it’s already giving me problems." He shook my hand.
"But that’s no way to welcome you. If you’re not too
nauseous from the airplane food, feel like grabbing something
to eat?"
After
lunch, we drove to A-1’s two-floor office building. I couldn’t
get over the size of it. I have large offices myself, but
this operation is in an entirely different league. We pulled
in front of the building and parked. Well-manicured hedges
flanked the walkway leading to the large, glass front doors.
The reception area was a huge, airy space with windows that
stretched to the second floor. Mr. Jones pointed toward
a series of rooms off to my right.
"These
are the shipping and receiving rooms, and next to them,
if you look, is our audio- visual department. Up the stairs
over there is our telemarketing department. My office is
this way."
We
turned left, passing some small offices and continued down
a hallway dotted with photographs. They weren’t reproductions.
He led me past a conference room, past more offices and
finally, at the end of the hallway, we came to his. Standing
by a large window was the company’s vice president, Mr.
Smith. This, I thought, is when we talk about the dollar
value of my company.
One
week earlier, I had met with my accountant and lawyer to
prepare a prospectus. Customizing a general business-selling
formula to fit a DJ service, we added together the number
of gigs we book, the value of my video and sound equipment,
my truck and two vans, special effects and the value of
the football, golf and basketball games that are part of
certain packages. Then I included the money I make from
the gigs I do myself, the deposits for next year’s bookings,
my salary and a monetary representation of what I felt my
freedom was worth.
What
if I’m asking for too little? What if I’m asking for too
much? Trying to figure out a figure I’d be satisfied with
was like trying to see myself clearly in a funhouse mirror.
What is 20 years of my life worth? There, on an 8½- by-11-inch
piece of paper, divided into neat little columns of numbers,
was a complete financial summation of my life.
That,
and two year’s worth of tax returns, was what I was prepared
to hand over to Mr. Jones and Mr. Smith. But they didn’t
ask for this right away. Instead, we talked a little about
how they run their operation. Mr. Jones and I share much
of the same business philosophy. Basically, we’re both interested
in making as much money as we can in this business. But
simple things, like treating a client with the utmost consideration
and getting back to them right away, also entered into it.
Giving
up all the responsibility and headaches of running my business
in exchange for some cash really tempted me. I pictured
life without my pager constantly going off, and not having
to worry about missing my kid’s soccer games. On the other
hand, the possibility of working under someone for the first
time in my life didn’t seem so appealing. Aside from having
the freedom to take a trip to the Bahamas tomorrow if I
felt like it, my status as an owner includes the trust that
my clients have in me. They rely on the kind of service
I provide, which is an extension of who I am as a person.
I’ve built this company from the ground up, poured 20 years
of my life into it and I don’t know if there’s a price that
could really come close to compensating for that. But the
healthy six-figure offer they presented me certainly made
me think – hard.
The
next day back in Massachusetts I laid it all out for my
lawyer, my accountant and my wife. My lawyer, who sees this
sort of thing all the time, warned me that the money might
not come all at once. Often, he said, companies give you
some money down and then pay the balance over a period of
time. In addition, the agreement included a Payment of Received
Deposits clause, which meant that A-1 Entertainment would
get all the deposits I had received for all my future parties.
Since I had several hundred future gigs booked, those deposits
amounted to an additional $50,000 that I could take off
the proposed buyout figure. My accountant pointed out that
after the sale, the government would want almost half the
money to pay the Capital Gains Tax. These were things to
consider, but it still might be worth going ahead with it.
It was my wife, though, who saw through all of that, asking
later that night, "Mark, for as long as I’ve known
you, you’ve never worked for anyone. Can you handle it?"
I
didn’t know.
The
money they offered would provide me with a nice investment
for my retirement. My kids are young and my current schedule
doesn’t let me see them as much as I’d like. This deal would
allow me to spend a lot more time with them. I also wouldn’t
have to worry about saving money for their college tuition.
I could take the position A-1 offered me, work for someone
else for a little while. It would certainly take a lot of
pressure off me. But to take away that pressure is to take
some of me away, too.
The
buyout would reverberate in millions of other ways, too.
The most obvious would be the changes that would occur within
my company itself. A-1 Entertainment planned to pay my DJs
far less than they were currently being paid. That would
certainly send them to my competition. A lot of connections
I’d made over the years, both with industry people and the
community, would change. I wouldn’t be doing benefits for
the charity organizations in my town anymore. Doing those
benefits was my way of giving back to a community that had
helped make me what I am today. They weren’t buying a franchise
or a store. My reputation, my name—which I’d never
be allowed to use again—was being bought out.
I
made my decision. The formal offer came in the mail about
two weeks after our initial meeting, where a preliminary
figure was discussed. This new figure that I was now looking
at didn’t match the preliminary figure. And there was no
way, in my mind, that I was about to negotiate.
This
was a nice exercise in fantasy, and it was a terrific ego
boost, but I didn’t need to sell my company. I wasn’t strapped
for cash and my company didn’t have any outstanding debts.
I owed it to myself, my employees and my clients to stick
with what I thought I was worth. In his response, Mr. Jones
wished me the best of luck, but since I wasn’t willing to
negotiate, he didn’t see any reason to continue our correspondence.
So
today, back in my office, my phone is ringing off the hook
and another DJ has the flu and I’ve missed my parents’ anniversary
party. Strangely enough, though, I relish every second of
it.
Mark
Ashe is still the founder and president of Mark’s Rolling
Dance Revue in Agawam, Mass. If you haven’t already guessed
it, the names in this story have indeed been changed.
If
you have any questions for TCB, please write to
DJ
Times c/o TCB,
25 Willowdale Ave.
Port Washington, N.Y., 11050
fax 516-944-8372
e-mail djtimes@testa.com.
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