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Last Update: Thursday September 21, 2017

Key Idea: Buy a Business with a Promise

Judy Cannon and Kathleen Barnes bought a business with a promise -- faith, hope and a prayer --  that they would some day pay the owner out of profits.  With their profound love of their city and their deep faith, they were confident.

Key Question:

A: 

Buy a business from a tired owner you might even be working for right now.  In this case the owner came to Kathleen and Judy to suggest that they buy her out but you can always initiate a conversation.  The funny thing about this story is that Kathleen and Judy were only part-time employees and had never considered the idea that they might be good at owning and running a company.  The owner spotted their talent and encouraged them by making the price affordable and something they could pay easily out of cash flow.

Click on the question to see more answers.

Think about it

Do you work in a small business?  Should you ask the owner if he or she is interested in selling the business?  Do you know any owners who might be open to selling to you?  Do you know owners who have one location who might be interested in letting you open a second location?

Clip from: Meetings America

Salt Lake City:  Meet  Kathleen Barnes and Judy Cannon.  Both of them are in love with their hometown. And, both of them separately became part time  tour guides for the tiny destination management company, Sample Salt Lake.  Then, together these two became quick studies of business operations when the owner of the business asked them to take over. With their cadre of part-time and full-time guides and planners, they all love everything about this special place.

They bought the business and changed the name to Meetings America.  They grew strong enough to win the 2002 Winter Olympics as a client.  Then, unexpectedly,  the husband of one of the guides, Ralph Johnson, made them an offer they couldn't refuse! They sold the business!

Go to the homepage and all the video for this episode...

Meetings America

Judy Cannon, former owner

210 North Redwood Road
North Salt Lake City, UT 84054
8019949000

Visit our web site: http://www.visitsaltlake.com

Office: 8019949000

Business Classification:
Travel Services

Year Founded: 1984

Buy a Business with a Promise

HATTIE: Hi. I'm Hattie Bryant. Starting and growing a business is hard, but not impossible, because 23 million Americans are already doing it successfully. The men and women who are creating work and wealth are the new American heroes: the small-business owners. Big business has not created one net new job in five years, but the economy is moving forward, in part due to the innovation of small business and the willingness on the part of new business owners to shoulder the risk involved in bringing new products to the marketplace.

Meet the heroes here, the founders and builders of business. You know the saying: `The hand that rocks the cradle rules the world.' So they could be close enough to rock cradles, Judy Cannon and Kathleen Barnes initially ran their business from home to rock the cradle. They then traded the cradles for computers and a vibrant staff who delivers delight to Salt Lake City visitors. Now poised for a nationwide expansion, Judy and Kathleen tell you how they've built this business. And you'll see for yourself why they are new American heroes.

 WENDY: This is our bus. Just find a comfortable seat. Good morning, everybody. Welcome to the city tour. We're happy to have you with us this morning. My name is Wendy. Our bus driver's name is Ray.

(Voiceover) And we are going to see the downtown Salt Lake City area. You can see the spires of the Salt Lake Temple, which took 40 years to construct. The large, domed building to your right is the Salt Lake Tabernacle.
(Voiceover) It's the home of the famous Mormon Tabernacle Choir. Now this building was constructed in 1867...
(Mormon Tabernacle Choir practice shown)

HATTIE: (Voiceover) This is a tour, but it's more than tourism. In the hands of the destination meeting company Sample Salt Lake, meeting attendees are entertained, educated, wined and dined. Meeting planners often outsource the work of registration, ground transportation and special events to companies such as this one owned by Kathleen Barnes and Judy Cannon.

KATHLEEN BARNES: Well, the company actually was formed in 1981 by a woman who saw a need in the city and developed this little--she just called it A Little Tour Company. It was a very small, little business. She serviced about six groups a year. Judy and I had both done a little bit of work for her, a tour or two.

HATTIE: So you were tour guides yourselves.

KATHLEEN: Right. And one day she just called and said, `I need, because of personal reasons, to sort of offload my business, and I'd like the two of you to buy it.' And we went, `Us?'

JUDY: Well, we didn't know each other.

KATHLEEN: No, we did not know each other.

HATTIE: You didn't know each other.

KATHLEEN: No.

HATTIE: You both worked for her and she decided that the two of you should together buy... Now did she get this revelation from heaven? I mean, how...

KATHLEEN: Who knows?

HATTIE: Let me ask you this. Did you pay this woman for this? I hope you didn't pay her too much. Not...

JUDY: We paid her a little bit of goodwill. Then the nice thing for us is she gave us money to start.

KATHLEEN: She gave us her bank account, which consisted of $1,000. And she gave us her furniture and, you know, her files, a few little things that she had. But she had no business on the books at the time.

HATTIE: So you didn't buy the business from her. She gave the business to you.

KATHLEEN: Basically, with the understanding that, over a period of three years, we would pay her out of the net profits of the business. And we determined an amount each year.

HATTIE: OK.

KATHLEEN: After we had concluded the negotiation, she very casually said to us, `You know, if you should gross $300,000 at the end of your third year, it would be really nice if you paid me an extra $2,000.' And we said, `We'll do that,' never dreaming we would meet that kind of a goal. It just seemed so far out of reach at the time. Well, the end of the third year we had grossed $300,000, but we had forgotten about this verbal agreement, until some many months into the fourth year and one day it dawned on us. And we said, `Didn't we promise her an extra $2,000?' So we sat down, we wrote out a check for $2,000. We mailed it to her. And she called us and said, `What is this for?' You know, she, too, had forgotten about it. But it was wonderful. We were happy and excited to do it.

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