The father-and-son duo of Wally and Andy Kocemba, longtime agents at Edina-based business brokerage firm Calhoun Companies, make a living helping other people buy and sell businesses. That experience proved valuable when they decided to buy the 105-year-old firm.
Calhoun Companies is one of the oldest business brokerage firms in the Midwest and, with 24 licensed agents, the largest in the Twin Cities metro area, according to the Kocembas.
They’re proud of the firm’s legacy, which dates to its founding in 1908 by pioneer female real estate agent Nellie Mason, near Lake Street and Hennepin Avenue, just blocks from Lake Calhoun. But they’re also moving quickly to modernize and expand the business.
“We felt there was a real opportunity to go into the next 100 years,” Wally Kocemba said of the purchase. “We’re making sure we have the base to get to that next level.”
“We’re a young 105-year-old company,” Andy Kocemba said.
Since closing on the purchase in 2011, the Kocembas have upgraded the company’s technology, engaged clients through social media and tried to boost the company’s online presence. Four new agents have come aboard and plans are to bring in two more this year, joining a number of Calhoun agents who have decades of experience. A refreshed brand, logo, collateral and website are on the way, as is moving to a new location in the fall.
A leadership transition also has unfolded, with Andy Kocemba now serving as president and CEO and his father taking new roles as chairman and chief financial officer. Wally Kocemba, 67, began working at Calhoun Companies 20 years ago, and has amassed 35 years of experience in business ownership and commercial brokerage services. Andy Kocemba, 32, joined his father there 10 years ago after earning a business degree at Bethel University. Both have been among the firm’s top-producing dealmakers.
Calhoun Companies specializes in helping clients buy and sell small- to medium-sized businesses in a variety of industries. The firm’s “sweet spot” is companies with sales of $500,000 to $5 million, Wally Kocemba said, although it handles deals involving companies with sales of up to $40 million. The firm closed about 70 transactions last year and its revenues were close to $3 million (which does not include total deal volume or sales prices of closed transactions). It also offers commercial real estate and business valuation services.
“We’re really in the business of selling dreams to those who want to take advantage of the entrepreneurial spirit,” Wally Kocemba said.
Clients seek out Calhoun Companies, the Kocembas said, in part for its large inventory of businesses for sale, usually 200 or more at any given time, and its extensive network of potential buyers.
While Wally Kocemba had bought and sold many businesses himself over the years, buying Calhoun Companies was the first time his son had been involved in such a transaction on his own behalf. Both said the deal gave them a greater sense of empathy for what clients go through in a transaction.
They even managed to act on some of the advice that they usually offer clients: “If you’re going to invest in a business, you should really do it in something you have a passion for and something that you know, and we have both of those,” Wally Kocemba said.
Working in an office — and with his father — was something Andy Kocemba aspired to do since he was “the kid who wore suits to preschool.” They have a good working relationship, in part because Andy Kocemba said he never felt pressure to join the company. “He paid his dues,” Wally Kocemba said. “It wasn’t a strong-arm; it wasn’t a gift.”
Serial entrepreneur PJ Voysey has purchased multiple businesses through Calhoun Companies, including Ampere and School Business Solutions, two St. Paul companies that offer business management services to professional associations and schools, respectively.
“In the Twin Cities, my impression is that for small and medium-sized businesses, they’re the broker to go to,” Voysey said. “They really understand this market.”
Calhoun Companies lined up half a dozen interested buyers when Richard and Barbara Butturff were ready to sell their contract-manufacturing company near Rochester. “They were easy to work with and gave us pretty solid advice, because I had never sold a business before,” Richard Butturff said. “We got it going but didn’t know how to get rid of it.”
The expert says: David Vang, a finance professor at the University of St. Thomas’ Opus College of Business, said this is a good time for Calhoun Companies to expand because baby boomers who own small businesses are reaching retirement age so the market is likely to be active.
While business brokerage firms can face a challenge marketing to a wide range of clients, the longevity of both Calhoun Companies and the Kocembas should weigh in their favor, Vang said.
“Having that kind of experience is really great because there is the mechanics of the spreadsheet calculations of value that can be done, but they’re almost like the equivalent of a mini-investment banker when they know the market well and can help in the negotiation process,” Vang said.
Todd Nelson is a freelance writer in Woodbury. His e-mail address is email@example.com.