Pine Needle Mountaineering
Backcountry Ski Gear
835 Main Ave Durango, CO 81303
970-247-8728 | Visit Website
When they originally started looking at the business in the fall of ’07 and the spring of ‘08, the banks were optimistic and the economy was good. Then everything changed. They contacted Southwest SBDC director for advice and what they learned was a real “eye opener.”
The Southwest SBDC advisor primarily helped them look at the historical financials of the business and to use the performance to determine a realistic purchase price. They examined financials for the three previous years.
They projected the cash flows forward to make sure the purchase price was reasonable. They looked at fixed costs and variable costs to see what they could change to improve some of their margins. The lengthy process took a few years to complete with Peterson’s involvement off and on.
Jeremy explains, “SBDC advisors gave us lots of good advice and ideas. We analyzed the Profit and Loss Statements, looked at the Balance sheets and ran every ratio on the business.” They saw some things they could change to tighten up some of the systems and opportunities for growing the business.
The information they gathered with the help of the SBDC provided exact numbers on how the business was performing. This data from a respected, objective third party gave them ammunition to negotiate the purchase price and influenced the seller to agree to a realistic price. “Terryl helped us structure the deal to make sure it made sense.”
“The consultants from the SBDC provided really non-biased opinions. They gave us an objective analysis”The SBDC consultant provided excel worksheets to project the numbers out for five years. They gained an understanding of forecasting and cash flow. “Luckily, the store had lots of history they could look at but the economy and the weather have a huge influence on the business,” explained Jeremy.
Teresa Mahoney was really efficient in helping them write a business plan. Her work was facilitated by the fact that the partners had done their due diligence and had accurate information to present to her.
Both partners agree that the advice and help they got were a huge help. They are grateful such an awesome resource exists in the community. The assistance they got made them focus on IF they could pull it off and how they could make the business thrive.
They will be contacting the SBDC again for further assistance with marketing.