Kate Marquis, new owner of Heartwood Media, and former owner Chris Conroy have fun viewing pictures from his career. (Photo by Matthew J. Mowry)
As more boomers reach retirement age, those that are business owners are trying to figure out what the future holds for their businesses. Finding a buyer is not easy and not a guarantee. Only about 30% to 40% of businesses on the market get sold.
Chris Conroy, the former owner of Heartwood Media, a video production company in Manchester, is among those who sold his business late last year, bucking the odds. But as he and new owner Kate Marquis found out, buying and selling a business can bring on unexpected challenges and emotions.
After 28 years building his business, Conroy found himself, like so many during the pandemic, ready for a change. “I lost a couple of people, friends and family, and realized life is short,” Conroy says.
He reached out to a financial planner and a lawyer for advice. The first challenge was how to value a service company without a lot of assets. “It’s relationships. There’s a lot of you that goes into the business,” Conroy says.
He established three goals for the sale: to provide an opportunity for a valued employee to continue the company; to ensure he left his clients in good hands; and to see some sort of financial gain.
When Conroy started out, he was able to buy his gear and client base from the previous owner and wanted to provide the next owner with a similar opportunity. He decided to approach Marquis, who had worked as a senior producer for the company for 14 years. “She was always the best solution. She has the business knowledge and history and is fabulously talented and invested,” Conroy says.
Conroy approached Marquis to see if she was interested in buying Heartwood Media. “My immediate thought was panic. Where is my paycheck going to come from?” Marquis recalls. She also worried that since Conroy had been the face of the company, would clients stay without
him there?
That led to a series of honest discussions as Marquis wrestled with the emotions and logistics of possibly taking over. She and Conroy set timelines to make sure the decision-making process kept moving along. After crunching the numbers, Marquis told Conroy she couldn’t buy the business for the amount he was seeking.
While disappointed, Conroy understood and began talking with other potential buyers. However, he soon found himself in a common conundrum—others did not place as high a valuation on his company as he did. “The delays would have been complicated and would tie me to the business longer,” than he wanted to be, Conroy says.
He approached Marquis with an offer to spend less money up front by just purchasing the physical inventory and then paying a percentage of sales annually (if the business was profitable). “If Kate does well, I get a percentage of it and if things are slow, which it’s not, Kate does not have a monthly bill,” Conroy says.
That deal appealed to Marquis. “It was necessary for Chris to stay connected to the business. People knew me, but did not necessarily know my capabilities and that I ran things with Chris,” Marquis says.
Marquis hired a lawyer and did her due diligence. Once they drafted the final deal, the whole process took two to three months and went smoothly for the most part. And though the two remained friends and both wanted the same positive outcome, the inevitable tension between buyer and seller caused some strain.
Marquis was also not prepared for how she felt at the contract signing. She was not in a celebratory mood and was instead anxious about the future. Conroy was sympathetic. “When I started my own business, I always said, ‘I don’t know what I don’t know. I understood the anxiety around that,” he says.
Conroy initially found it difficult to find the right balance between giving Marquis space and being a resource. However, the two soon found their rhythm with Marquis gaining confidence as a business owner and Conroy stepping away from the daily grind and being able to act as an advisor and an extra set of hands when needed.
Heartwood Media is thriving under Marquis’s leadership. “Clients are rooting for me. It’s amazing to get that support from clients,” she says. In addition to working with established vendors, Marquis says she has been able to bring on new creative partners, which is strengthening the business.
“I’m happy Heartwood continues,” Conroy says. “I made my mark and now it’s in great hands and I’m making money from it.”
