Area native John Selby navigates between ownership and retirement

John Selby sat with his wife, Vivian, and dog, Cooper, in their recently purchased 25-foot Winnebago at his shop at Signature Systems on South Kingshighway.

They talked about a trip last year to North Carolina where they visited the real-life Mayberry, a town called Mount Airy, the hometown of Andy Griffith. The excursion took them to the outer banks of North Carolina, where they visited Kitty Hawk, the site of the Wright brothers' first flight, then hopped along the barrier islands with the help of a ferry.

They're planning more trips in their new purchase, a monolithic item in an otherwise downsizing phase of life for the couple.

Selby sold Stereo One in 2016 to HD Media Systems, ending his 36-year ownership of a high-performance audio/video company that grew from five employees from its birth in Cape Girardeau in 1980 to 70 employees in five locations about 10 years ago.

"I'm spending a little more time with family now," Selby says. "Some of those choices we had to make are easier now. It's not as complicated."

John and Vivian Selby with their dog, Cooper, pose for a photo Tuesday, Jan. 24, in Cape Girardeau.Fred Lynch

The onetime salesman/account manager/marketer for the store, has traded 75-hour work weeks for flexible 30-hour weeks, allowing for road trips in the RV or visits to his lake house in Hillsboro, Missouri.

Like a lot of baby boomer business owners, the 66-year-old Selby has made the conscious decision to slow down and enter retirement, or semi-retirement.

"There were a lot of factors," Selby says. "I think age was one of them, trying to find the right time. But I would primarily say because I was getting older was probably the main motivation behind it."

As Selby and others have found, finding the right time is the tricky part.

Jennifer Hendrickson of Hendrickson Business Advisors has been helping clients buy and sell businesses since 2010, and she's seen the dilemma often facing owners wanting to exit their business to enjoy their golden years.

So when do you sell?

"You want to sell when the business is ready to sell and when the business is at the top of its game, not necessarily when you've hit the magic number for retirement and you're ready to exit and go do something different with your life, because the business may not be ready at that point," Hendrickson says. "When I counsel people, I tell them 'The likelihood of you being ready to retire at the exact time that business is ready to sell, where you're going to get top dollar, is not real likely.'"

She says it's better to sell early rather than late, and if it is ahead of schedule, there are alternatives to retirement, such as buying another business, consulting or working for someone else. She stresses preparation that allows an owner to exit on his or her own terms rather than allow outside factors to force one's hand.

Buyers are most concerned with the most recent three years of performance, looking for steady financials, and waiting until one is tired of the grind or for health concerns to become factors are among the variables that can put a business on the market in less than prime value, Hendrickson says.

"It's also a matter of positioning the business so it's attractive to a larger group of buyers, and those buyers feel confident that the business will continue or do better under their leadership," Hendrickson says.

Besides financials, the list of factors that make a business more attractive include established contracts with suppliers and clients, as well as non-compete contracts with employees to assure the business does not disintegrate.

A strong business with vitality and a bright future is attractive, but also hard to let go.

"You want to get out at the high point, but that's the point when your adrenaline is still rushing and you're having a good time," Selby says. "And that's a hard time to get out, but financially that's the best time to get out."

He's been both a buyer and seller, and is aware of the host of factors that can lead to market volatility. Some of his paydays have been more lucrative than others when he's parted with his retail locations.

"The part that is hard to predict is where the maximum return on investment is going to be," Selby says. "It could be age 62, or it could have been age 59 would have been the time to sell the business. The best time for me to sell the business probably would have been five years before I did, but you've got a lot of pulling and tugging that keep you in it."

One of the strong pulls for him was departing a market that he felt deserved a quality product and might be without otherwise.

After selling two businesses in Springfield, Missouri -- he still owns one building -- and single businesses in Joplin, Missouri, and Carbondale, Illinois, his final holding was in Cape Girardeau.

He downsized that operation at the end of 2014, eliminating the car audio division to focus on home entertainment. He renovated the building in 2015, cutting his store space in half and leasing the other half. He wrestled with the size of the revamped company, wanting it not to be too big that it would be hard to find a potential buyer but not so small that he was not relevant to vendors for preferred pricing that would keep his products in a competitive price range for customers.

"I worked it for about a year after that, and I said, 'This is about the right scale except that it's still requiring an enormous amount of time from me,' so that's when my wife and I decided it was time to kind of let this thing go," Selby says. "Because I knew the scale, and I didn't really want to work that hard. Some younger, faster, better-looking people would be the right combination, and it was."

He reached out to HD Media Systems owners Scott Starzinger and Drew Balsman, who he thought would be a good fit for his business. Balsman was a former employee, and there was a high trust factor among the parties. Selby composed his own contract as he did with his other business transactions, which occurred with parties he either already was familiar or had a working relationship.

"It was pretty involved and a lot of implications," Selby says. "We wanted to make sure nobody was surprised by something a year down the road. My idea of a contract is not so much to tie somebody down, but to make sure everybody arrives in the same place kind of the way they intended. So that's what's happened, so there hasn't been any ghosts in the closet or anything that has been weird or unpredictable at this point."

Part of the arrangement was for him to continue to run a service business, Signature Systems, inside the building he still owns.

"Yeah, we wanted a package that worked for Vivian and I, but also it was really important to keep the business going," Selby says. "If we were too heavy-handed it certainly would have compromised their ability to run the business, and we didn't want to do that. We wanted to give them every opportunity we could to be successful."

And for a man who says he could count the numbers of Saturdays he's had off on one hand over the past 30 years, it provided an opportunity to take extended excursions with his wife.

"We're doing those things," Selby says. "We can carve out a little chunk. When you own a business, the penalties for non-performance can be pretty severe. You're not here, you're not making decisions or involved with things. There's always that computation, 'What am I missing? What's going to happen?' Once you're retired, you can just get away and say, 'OK.'"

His get-away is a luxury ride, a 2017 Class C model complete with a flat-screen TV, microwave, refrigerator, table, bathroom and bed.

It has a sound system, too.

"Actually, it's crappy," Selby says with a smile. "It's No. 14 on my list [of things to do]."

He's still a busy man.