On July 1, 2012, the University of Kansas launched a matchmaking program to link university students and alumni with rural businesses soon to be up for sale. Program founder Wallace Meyer (Director of Entrepreneurship Programs) developed this initiative in response to a pressing problem facing nearby rural communities: that too many owners of small businesses in these communities were unable to sell or find a suitable successor once they neared retirement age. This matchmaking program effectively allows retiring business owners to sell their businesses to qualified MBA graduates from the University of Kansas and also institutes of higher learning across the state. The goal is to not only foster the continuity of successful rural businesses but also promote the growth and development of those businesses to facilitate new job opportunities as well.
University of Kansas’s program aims to serve both the business owners looking to turn over successful businesses and also those future business owners ready to take on the challenge of running the business. The businesses the program is targeting must have owners who plan to retire in 5 years (and don’t have a succession plan in place) and have an annual revenue of at least $750,000.
Incentives to MBA graduates include not only a strong level of support in taking over the business (via an appointed board of advisors made up of leading businessmen and entrepreneurs), but also a great deal of financial support as well. In fact, students and alumni will only need to come up with 10 percent to 20 percent of the financing. The school, along with the United States Department of Agriculture’s Kansas’s office, has established a loan guarantee program, enabling the rest of the funding to come from local banks and other sources. Additionally, retiring business owners are required to mentor the new owners for up to three years.
An added benefit of the program is the hands-on experience University of Kansas business students will receive, as they will be able to help evaluate applications and work with staff to develop an operations and procedures guidebook so that the program can be simulated elsewhere.
References:
Damast, Alison. “Matchmaking Program Finds Buyers for Rural Businesses.” Bloomberg Businessweek. 7/23/12. (7/27/12.) http://www.businessweek.com/articles/2012-07-23/matchmaking-program-finds-buyers-for-rural-businesses.
