[TowerTalk] AES SK

[jimlux]

On 7/7/16 10:06 AM, Joe Subich, W4TV wrote:
> On 7/7/2016 11:24 AM, Alan NV8A wrote:
>> I would have expected them to sell the business -- with its "good
>> will" -- as a going concern.
>
> Unfortunately, there is little value in "good will" for small
> businesses these days.  The truth is that the liquidation value of
> inventory, receivables and physical assets (real estate, plant,
> equipment, etc.) is often higher that the value of the business as a
> "going concern" thanks to all the regulations and red tape faced
> by small businesses.
>
> I could go through multiple business valuation models but in most small
> (sole proprietorships, "S" corporations) businesses there is little if
> any "profit" above the "owners wages" - therefore little "good will"
> value.  Again, any accumulated profits are found in inventory, real
> estate and receivables.  It is often as easy to liquidate than find a
> buyer who can pony up the cash to purchase the business and then cover
> both debt service and "owner's wages" just to break even.
>


The same is true of the hundreds of small machine shops supporting a 
large government program, like Space Shuttle.
There's a ton of these 5-10 people, few million/year kind of businesses 
around.  They've tailored their shop to the specific customer and 
product, and if that goes away, there's a substantial challenge in 
shifting over.

Someone got a contract back in the 70s making some specialized parts, 
made them for 30 years, the shuttle program ends, and aside from the 
value of the machine tools in the shop, there's not much else.  So the 
owner retires and sells the assets, rather than trying to find someone 
to take on the "machine shop" business.

There's not a lot of electronics repair places - the tooling and 
specialized equipment required to do real repair is expensive, once you 
get beyond "swap boards and assemblies".  There is a very small market 
(if any) for places willing to do SMT rework on a $300 TV to replace a 
$20 part.

In the ham business, it's much the same: repairs are done by small niche 
suppliers who have a supply of obscure parts for specific models or 
maybe the manufacturer. The internet has made the niche supplier a 
viable business - you don't need a storefront, you don't need to depend 
on someone happening to know you do this.  You just have a web page that 
says, somewhere on the index page, "VFD displays on 1980s Yaesu radios 
repaired" and google will find them when the ham with the dying display 
goes "VFD display Yaesu FT-757"