By Hope Belli Tinney, Washington SBDC
TACOMA, Wash. – Kory Brown knows business. In fact, he’s a professor of business at Pacific Lutheran University in Tacoma. Still, when he and his wife, Pam, decided to purchase a Great Clips franchise, they enlisted the help of the Washington Small Business Development Center (SBDC).
“Initially, I looked to the SBDC to assist in business valuation,” he said, but his discussion with SBDC advisors has since covered a variety of topics.
Brown, who spent 16 years in the semiconductor industry before joining PLU, said he and Pam were interested in either starting or buying a manager-run business in 2012. They were not looking to buy a hair salon, but when they found a Great Clips for sale in in their target location, it seemed like a great fit. Pam is a licensed cosmetologist.
SBDC helps buyers evaluate price
Valuing technology businesses is one of his strengths, Brown said, but figuring out the value of a small business or franchise was outside of his expertise.
The couple began meeting with John Rodenberg, the certified business advisor at the SBDC center at Bates Technical College in Tacoma. The Washington SBDC is a network of more than two dozen certified business advisors who meet with clients in communities across the state to help them start, expand or transition a business. SBDC advising is provided at no cost to the client and is confidential.
The Washington SBDC (http://www.wsbdc.org) receives support from Washington State University, the U.S. Small Business Administration and other institutions of higher education and economic development. In Tacoma, Rodenberg’s work is supported by Bates Technical College.
Rodenberg’s expertise in small business valuation allowed him to quickly access information and resources so that the Browns were able to negotiate to purchase the Great Clips with a high degree of confidence.
Advising yields ‘real economic value’
When discussions turned to lease negotiations, Rodenberg suggested the Browns meet with Steve Burke, the SBDC advisor in Tukwila, Wash., who has extensive experience in leases.
The tools Burke provided resulted in a 10 percent reduction in lease costs, Brown said, adding that “(SBDC) advice has translated into real economic value.”
From one location in Puyallup, Wash., in 2012, the Browns have expanded their business to include two locations in Federal Way, Wash., and a fourth under construction in Graham, Wash., set to open this year. Brown said he reached out to Rodenberg to discuss SBA loans and putting together successful loan applications to finance the expansion.
Engaging their business model
With Pam’s experience in the cosmetology industry and Kory’s success in business, the two complement each other well. Pam takes on the lion’s share of operational responsibilities and Kory provides strategic direction.
The decision to buy an existing business that was part of a successful national franchise was a good one, Kory Brown said.
“I’m grateful that we jumped into this business through acquisition, as we were able to work with excellent, existing staff with minimal disruptions as we learned the business,” he said. “As we have engaged the business model deeply, we are now practicing much of what I teach in terms of organizational structure, measuring performance that is consistent with our strategy and building compensation plans that motivate all to engage the strategy.”