Being in business is not always just about creating or selling a good product. Often times, a product will only get you so far before you run into issues with securing startup capital and ongoing financing, staffing problems and other common obstacles that business owners face. In some cases, a company ends up in need of a new owner and a fresh start.
For the people who may not be interested in starting a business from the ground up, there may always be the option to buy their way in at some point. Buying and selling companies is something that is done all the time, but it can require a sophisticated understanding of business transactions.
TV star Patrick Dempsey recently came out of a business auction successfully after his investment group, Dempsey’s Global Baristas, placed the winning bid on Tully’s Coffee chain, which makes coffee that is sold in many Denver stores. The group’s bid of $9.15 million beat out coffee giant Starbucks Corp. Tully’s Coffee had previously filed for bankruptcy protection, so the winning bid must first be approved by a bankruptcy judge. If it is approved, Dempsey’s Global Baristas will be the new owner of the Tully’s chain stores and franchise rights.
For others who may have been involved in the bidding for this company, it may have seemed like Starbucks would be the clear winner. Not only does Starbucks enjoy a global presence, but the company is based in Seattle, as is Tully’s. However, many smaller companies were in the running for the company right alongside Starbucks, including a Colorado private equity firm.
With enough funding, planning and business savvy, smaller groups stand just as good a chance in negotiations as larger corporations do. In any business transaction, it can be crucial to work with an attorney who understands that there are a number of factors, consequences and benefits involved in buying or selling a business.
Source: Denver Business Journal, “TV’s Dr. McDreamy outbids Boulder’s Kachi for Tully’s coffee chain,” Mark Harden, Jan. 4, 2013
- Our Denver, Colorado, law firm assists people who are involved in buying or selling a business. For more information on this process, please visit our business transactions page.