Firms are ProForma's selling point.

• Author: Taylor, Mike
• Position: Money Matters

WHEN DAN GREEN TURNED 75 AND DECIDED TO SELL REED MILL &\ Lumber Co. after 41 years, he turned to Denver-based ProForma West Ltd. to seil it for him. The saie took two years, but it fetched $1.5 million and made a happy customer of Green.

ProForma describes itself as a mergers and acquisitions firm, but about 90 percent of its work involves the sale of businesses. Since 1987, it has sold hundreds, from Flowers by Fillis and Jan's Quality Meats to the Crazy Horse Salon.

"They're real good at forecasting what your business will do and surveying your business," Green says of ProForma.

With four offices in Colorado and one in Southern California, the firm averages 30 to 40 sales a year In the Colorado market. Its typical inventory is about 25 business listings. The seven associates in the Colorado office work with both buyers and sellers.

"We do a lot of businesses that are less than $1 million, and we do a lot of businesses that are in the $1 million to $15 million range," says David Lewis, who founded the company in 1987. He estimates that there are 80,000 businesses in Colorado, and that 3,000 to 4,000 of them are sold each year. He figures that about one-third of the sellers enlist a business brokerage.

"It's a tough business," Lewis says. "It's a business where you can go a long time between paychecks. Especially in today's market. We've seen a lot of them (business brokerages) come and go."

The business brokerage field has been hit by the recession like just about every other industry, and Lewis says it will be hurt further with the U.S. Small Business Administration decreasing the maximum loan amount backed by its 7 (A) program from $2 million to $500,000 as of Oct. 1.

"That's just going to be a killer in small business," Lewis says. "I don't know what the heck they're thinking because right now they should be stimulating the economy, not restricting it. For example, I had a guy in today who wants to buy a business for between a million and a million and a half. Well, he's got enough money under the old program that he can qualify for a million-dollar loan. Now he's going to be restricted to a...