Finding an Owner That Wants to Sell

Landing Media Placement for Your Product
Let us help kick start your New Year's Resolution with some new fitness equipment.

By KELLY SPORS
Staff Reporter of The Wall Street Journal.

From The Wall Street Journal Online

Question: I have been searching for a business to buy for the past couple of years. I have clear criteria defining my desired business segment, and I have built a network through investment bankers, primary lending institutions, mezzanine lenders and brokers. But I'm disappointed with the results. What is the best way to promote myself to companies that want to sell?

-- D.K., Greensboro, N.C.

Answer: You're taking many of the right steps, but perhaps you're not mingling with the most clued-in sources: potential sellers themselves.

Many business-acquisition opportunities aren't widely known about, even by investment bankers, because sellers fear roiling employees and customers by taping a for-sale sign in the window. Instead, they wait patiently for the right buyer to knock. There are many businesses today "owned by 70-plus-year-olds that don't know what they're going to do with it," says Ray Lampner, head of mergers and acquisitions for an Akron, Ohio, accounting firm.

Ken Thompson, an Akron entrepreneur who has bought nearly 20 businesses, uses a strategy he dubs "call-mail-call." Start by calling a few business owners in the industry and ask if they know someone who may be interested in selling. Don't request an immediate answer, but say you'll follow up. Two weeks later, send a letter with your business card reminding them about your desire to find prospective sellers and that you'll call again soon. Finally, call back to inquire if they've come up with any possibilities.

This strategy works, Mr. Thompson says, because it shows you're a serious buyer and allays the owner's fear that "you're the secretary's boyfriend calling to figure out whether she's going to be laid off." Moreover, even if business owners you contact aren't looking to sell, they likely know another who is.

Other resources are trade-group newsletters with classified ads, and accountants, who often know interested sellers before they're officially hunting for buyers.

Another option is asking venture capitalists in the industry, who may be looking to divest businesses from their portfolios.

Daily Diet's Tips
11-year-old entrepreneur Brook Bignell has projects cooking

Newest Fad In Farming: The Internet

How To Make Money Creating Corporate Theme Songs

Tucked away in the den of his 127-year-old farmhouse, Ed Winkle huddles over his computer. The screen's soft glow lights up his eyeglasses, reflecting messages about tractors, corn hybrids and crop insurance.

Winkle is checking the latest postings on his favorite Internet farm forum. Advice from fellow farmers around the country has enabled him to increase his corn and soybean production, better market his crops, learn how to rebuild engines and get good tires for his tractor.

Online forums, message boards and chat rooms are replacing rural coffee shops and feed mills as places for farmers to talk farming and trade tips as more of rural America goes online.

"You get the best thinkers in agriculture," Winkle said of the forums. "You're mixing such a diverse group of people — from different areas, from different backgrounds, different experiences, different ways of farming."

Fifty-one percent of U.S. farms have Internet access, according to a July 2005 report by the U.S. Department of Agriculture, up from 48 percent in 2003. More than two-thirds of them still use dial-up access.

The popularity of online farm forums has grown as well, said Mack Strickland, an agricultural engineer at Purdue University and farm-computer expert, with some forums claiming to have as many as 30,000 registered users.

The Internet division of Farm Journal Media, www.agweb.com, says user traffic doubled between October 2005 and October 2006, with the forums on the site enjoying similar growth. Traffic on the Des Moines, Iowa-based www.agriculture.com has increased 20 percent to 25 percent over the past year, said editor John Walter. Both sites are funded by ads and free for users.

Enthusiasts say the forums have improved farm production and saved farmers precious dollars by helping them avoid costly mistakes in planting, fertilizing, equipment buys and maintenance. And forums have enabled farmers — many of them miles from their nearest neighbor — to educate each other and build community.

"We all like to talk to folks like ourselves who have the same problems," said Stan Ernst, a marketing instructor at Ohio State University's department of agricultural economics. "We have so much riding on many of our decisions economically that you've got to find people with experience."

A farmer can spend as much as $160,000 on a combine, for example. If it breaks down during a critical harvest time, that could mean the difference between a profit and a loss for some farmers.

Walter said the average visitor to www.agriculture.com spends 11 minutes at a time on the site.

"It's enough time to have a cup of coffee and a conversation and learn something," he said. "It's just rearranged who their neighbors are in a sense. You can't help but think that has changed farming to some degree."

Rural America has lagged behind the cities in Internet usage — especially broadband — because wiring the population-rich cities is more profitable and wiring the countryside more expensive due to long distances and natural barriers such as hills. In addition, rural businesses haven't needed the Internet as much to compete.

However, farmers and existing rural businesses are becoming more reliant on the Internet to be competitive, and rural communities are becoming more aggressive in seeking Internet access. They see it as a way to attract white-collar jobs, and urban dwellers who have moved to the country are demanding it.

Paul Butler, who grows corn and soybeans on 260 acres in Macon, Ill., returned to farming four years ago after 25 years in the computer business. He doubts he would have made it without the Internet and online advice from fellow farmers.

"I would have made a lot of expensive mistakes," said Butler, 39, who logs on using broadband. "Purchasing seed is a pretty complicated decision. It was nice to have 20 unbiased people that weren't selling seed that could give me an opinion on it."

Eric Neer, 24, of Davenport, Iowa, discovered farm forums from fellow students when he was in college.

Although he seldom posts a question, Neer — who works for a farm equipment manufacturer — devours the information he sees on precision farming, using the forums to shop for equipment and information about tractors and combines that are steered by computers linked to global positioning satellites.

Machinery — the universal language of farmers — is a hot topic in farm forums. So is when best to take crops to market to get the best price. Sometimes the talk veers away from pure farming.

In a recent exchange on www.newagtalk.com, a popular farm forum, an Illinois farmer complained that the starter on his pickup truck was acting up. A fellow farmer replied that the electric solenoid atop the starter was probably worn out and the contact sticking in the closed position.

"I would put a whole new starter on it," he wrote. "Fix it now before it ruins the flywheel teeth."

An Ohio farmer wondered if he should replace his fuel-oil furnace with a geothermal heating system. The idea got high marks from a farmer in Indiana who said a geothermal system leaves no smell or residue, makes less noise and leaves no hot/cold spots. Then he offered tips on insulation and heat distribution.

Farmers have to decide themselves whether the advice they get is sound. Walter said he tries to screen out the hokum, blowhards and occasional shyster. Strickland said some users give opinions not based on fact or research.

And some farmers still rely on the neighbor they know.

"You can get some good ideas from people in other states, but they're dealing with different circumstances," said Jim Meimer, who raises corn, soybeans and wheat on 900 acres.

Meimer, 28, goes online to get market data but prefers to get advice from friends and neighbors. He often sees them at the feed store and fertilizer plant when he goes into nearby Mount Gilead, Ohio, to pay bills.

Glen Feichtner, 48, who raises 300 head of cattle near New Washington, Ohio, prefers to get his tips from fellow farmers at the stockyard and grain elevator because he knows they have been successful.

"I get face-to-face interaction," he said. "I know these people. I know their story."

Winkle, 57, became a believer when a tip from an Iowa farmer prompted him to change his no-till farming technique. Winkle increased his yield by about 30 percent.

During the winter, he spends about two hours a day wading through the forums from his farm, about 40 miles northeast of Cincinnati. Since April, he has posted 1,738 messages on one forum alone.
Cell: A NovelBarefoot Contessa at Home: Everyday Recipes You'll Make Over and Over Again
Woman Entrepreneur - Banu Ozden (Smart Medical Consumer)

Teaching Musicians to Be Entrepreneurs

Get FREE stuff by an one click.

In most areas of higher education, entrepreneurship has long lost its stigma as a career path for those without one. But at the nation's top music conservatories that stigma is still very much alive, despite the fact that the "traditional" career path for classically trained musicians—one that ends with steady employment in a symphony orchestra—is difficult.

At Manhattan's Juilliard School, one of the country's preeminent performing arts conservatories, Career Development Director Derek Mithaug admits that the business-y connotation of the term "entrepreneur" still rubs a lot of artists the wrong way. "We try to avoid that word," he says. But getting support for entrepreneurship training is about more than semantics: Some in music education still firmly believe that the role of the conservatory is to train musicians, not businesspeople.

That's why at many conservatories, entrepreneurship training—where it exists—has tip-toed into curricula under less-threatening guises. Most schools offer at least one elective or workshop in "career development" or "the music industry." At the Eastman School of Music, entrepreneurship programs are run out of the Rochester (N.Y.) school's Institute for Music Leadership.

Converting the Old Guard

The Institute's director, Ramon Ricker, says it took some effort to convince some old-guard faculty—firm believers in "art for art's sake"—that the school wasn't selling out by offering courses that emphasized practical skills. At one meeting, Ricker went around the room pointing at each faculty member: "You've got a summer chamber music program, you've got a string quartet, you publish books— you're entrepreneurial!" And teaching those skills, he says, is about more than building individual careers—as the nation's symphony orchestras continue their struggle for survival, they're also vital to the future of classical music.

Bringing music schools in line with the future of classical music is exactly what Manhattan School of Music president Robert Sirota is most interested in. "The whole infrastructure of music is experiencing seismic shifts, and music schools have to move with those changes," Sirota says—and just adding a business course or two in isn't enough to keep up with the times. Although getting even one required course on entrepreneurship into a packed conservatory curriculum is more than most schools are willing to commit to, what's really necessary, Sirota says, is a radical rethinking of the whole centuries-old conservatory model.

One of Sirota's sea-change ideas: Instead of requiring all graduating students to perform a senior recital, conservatories could give students the option of producing their own recording. "It sounds like a small thing, but it would be revolutionary," Sirota says. "Can we do it? Well, that remains to be seen."

As an end goal, Sirota envisions "a new generation of performing musicians who function more like individual small businesses, who work the hypersegmented musical marketplace in an entirely different way." Figuring out how to get there, Sirota admits, is the $64,000 question. In April, he's holding the first of several think-tank discussions with various music industry leaders to discuss just that subject. And in a year or two—as soon as he nails down the funding—he hopes to open a new Center for Music Entrepreneurship at the Manhattan School.

Funding from Wealthy Foundations

So far, most of the funding for arts entrepreneurship programs has come from a few wealthy foundations. Among the first was the College of Music at the University of Colorado at Boulder, which opened the Entrepreneurship Center for Music with a grant from the Price Foundation in 1998. Since then, the Coleman, Morgan, and Kauffman foundations have funded numerous other initiatives to further entrepreneurship in music, including grant competitions and mentorship programs.

But critics say music schools still aren't doing enough to prepare students for the real world. "How in good conscience can we continue to graduate thousands of students a year who have no hope of getting a job in the field they were trained for?" asks Michael Drapkin, a business consultant and former symphony clarinetist who got funding from the Kauffman Foundation to support an annual conference in North Carolina on music entrepreneurship called BCOME.

A New Way of Thinking

He's not the only one asking that question. "If you talk to people outside the academy, this is a no-brainer," says Gary Beckman, a PhD student in musicology at the University of Texas at Austin and a leading academic researcher in the growing field of arts entrepreneurship. But in order for music entrepreneurship to gain more mainstream acceptance, he says the topic has to be academically legitimized. On Mar. 31, he'll present research at Pepperdine University, at the first-ever panel discussion devoted to arts entrepreneurship as an academic discipline (see BusinessWeek.com, 10/2/06, "Business Plans with Legs").

Still, says Juilliard's Mithaug, "It takes time to change culture." From a very young age, musicians are taught how to take direction, to be the best by being the same. "[Entrepreneurship] is a new way of thinking for people who have spent most of their lives in a practice room," he says.

And Juilliard is already a much different place than it was when Mithaug was a student there; the Career Development Office he now directs didn't open its doors until 2000. Before that, he says, "there was no office, no nothing." Now about 25% of Juilliard students participate in the school's professional mentoring program, which matches students up with a faculty member or with an outside professional to work on a project of the student's own design. Mithaug says interest in the four-year-old program has grown each year, and over the past decade he's seen a profound shift in student attitudes.

Stigma Starting to Fade

Gillian Gallagher, a 22-year-old viola player, says she has no qualms about identifying herself as an entrepreneur. After earning her master's degree from Juilliard she hopes to play professionally with the string quartet she formed as a Juilliard undergraduate with three other students. Besides playing, Gallagher says the group members do all of their own self-promotion—everything from writing bios to contacting programmers.

While Gallagher says most students still seem focused on a traditional career path that begins with auditioning for symphony orchestras, "I can see the stigma starting to fade all around me," she says.

"There are a lot of musicians who come here thinking that the most important thing is their art, and that other concerns—like making money—don't matter." Around the beginning of fourth year, though, "People start to get a little scared. They start thinking, 'what am I gonna do next?'"

An Alternative to Ramen Noodles

Angela Myles Beeching, career services director at New England Conservatory in Boston, says she sees her students go through a similar rude awakening during the professional artists seminar required of third-year students. But she says the point isn't to scare students away from pursuing their dreams. "Whether you call it entrepreneurship or not, what it comes down to is helping young musicians see themselves as the masters of their future—that they can create opportunities, not just wait to be handed something."

For some students, entrepreneurship is an alternative to what many artists have turned to in the past: the day job (see BusinessWeek.com, 7/10/01, "Portrait of the Artist in Red Ink"). At UT-Austin, Gary Beckman says that while the students he teaches certainly don't buy into the 19th century myth of the starving artist, they're not interested in entrepreneurship for the same reasons as students in the business school, either. "They're not looking for a six-figure salary," he says. "The reason they want an entrepreneurial lifestyle is so they can continue to practice their art—and maybe not eat ramen noodles every night while they do so."

And Gallagher says that's not the only reason. "Every conversation I've had about the future of classical music comes down to the fact that as musicians, we need to be more proactive." For example, she says, "a major problem today is orchestras failing—maybe if musicians were more entrepreneurial, that wouldn't be happening." But no matter what, Gallagher says she's convinced that entrepreneurship skills are useful for any musician in the long run—even those who aren't planning to strike out on their own. After all, she says, "If you're in some symphony that starts to go under, you're out of a job."

How a Funky Ice Cream Truck Can Change Your Business

Firms find niche finding internships

MILWAUKEE - Claire Richardson knew this summer would cost her money. Whether she chose to take an unpaid internship, study abroad or stay at Southern Methodist University and take summer classes, she and her parents would have to pay.

So that's why she didn't mind spending thousands of dollars to land an internship, plus housing and food, for a summer in New York.

"When you look at it you're going to be paying money wherever you are or whatever you're doing," said Richardson, a 20-year- old sophomore who will intern this summer at brokerage Smith Barney.

Hunting for an internship takes time, and as more students realize their value, competition is getting fierce. A slew of businesses have popped up to help match students with internships, charging hundreds to thousands of dollars to help them write resumes, identify potential employers and find summer housing.

About three-fourths of all college students have had internships or some type of professional work experience by the time they graduate, said Phil Gardner, director of Michigan State's Collegiate Employment Research Institute. When he started following such trends 25 years ago, only 35 percent to 40 percent of college students interned.

"It's just one of those things you have to have before employers will even consider looking at your resume," he said.

But students shouldn't pay to find an internship, he said, because most universities have career centers where students can search for free.

"A student doesn't have to do that, in my opinion," Gardner said. "It just tells me that they're not going and using their resources." Richardson said she - and her parents - didn't mind paying a company like University of Dreams to secure her internship. Because she was only in her sophomore year, she felt she faced more competition. She tried going to her career center, but most jobs were in Texas, and Richardson wanted to go to New York.

University of Dreams uses its staff's personal contacts at 500 companies to get students internships with employers they couldn't otherwise get into, said CEO Eric Lochtefeld. For interns, that's better than sending in a resume and hoping, he said.

"Does any college student really, sincerely believe that their resume will stand out or get better consideration than an actual introduction would provide?" Lochtefeld said.

In four years, the company has placed 1,800 students in companies such as Paramount Pictures or MTV Networks, both divisions of Viacom Inc. It has slots this summer for 850 students, he said.

Students pay from $6,499 to $8,999 to have the company find them an eight-week summer internship, plus housing in dorms at universities, some meals, transportation to work and activities for a summer. Financial assistance, including loans, grants and full scholarships, is available.

An admissions team reviews applications and makes an offer.

Students who are accepted pay a deposit of $500 to $1,000. Then they work with a placement agent, who finds a matching company.

They're guaranteed an internship in the field of their choice or their money back.

Most of the internships are unpaid, but University of Dreams arranges for college credit through universities. Richardson figures she'll get between one and two credits for her summer in New York.

Other companies, like Fast Track Internships, don't let the companies know they're helping students. In less than a year, the Dallas-based company has placed 20 students in fields like broadcasting, consulting and advertising, said Steve Rodems, a former powdered soap salesman who started the company with a business partner.

"We go about it the same way we would if we were back at a corporation or an advertising agency marketing a product," said Rodems, of tweaking resumes and playing up students' strengths.

Fast Track works with students to identify companies that suit the students' goals but either don't have formal internship programs or don't advertise them, so competition will be less.

The company also writes and prints 100 to 300 copies of resumes and cover letters, addresses envelopes and even buys stamps before giving them to the student to sign, stuff and mail. Rodems said students typically receive five offers.

The price: $799 if a student wants an unpaid internship and $999 if they want a paid one, because those are often more difficult to get, he said. Both come with a two-offer guarantee.

Laura Kestner, director of Career Services at Marquette University in Milwaukee, said no one should pay to find an internship. Looking for an internship helps students develop skills, she said.

"We're advocates of teaching students lifelong job-search skills, so there's no reason you should pay someone," she said.

But she is working with a firm that helps employers recruit interns, Chicago-based Brill Street and Co.

Employers tell Brill Street their needs for jobs ranging from a few weeks to 18 months, and the company finds and pays the students. Brill Street then bills the hiring company and collects a fee off that, said Nancy Lerner, who founded the company with her husband last year and was at a recent career fair at Marquette.

American Born Chinese