In 2009, Blake Joffe and his partner Amy Remsen moved to Oakland from Philadelphia on a whim, in search of a new city to call home. They fell in love with the Bay Area’s friendly people, beautiful landscape, and amazing food. (Blake was a chef in Philadelphia and after their move worked at Delfina in San Francisco as chef of their pizzeria.) They loved their new home but there was one thing they particularly longed for (aside from warm summer nights): amazing bagels! Armed with their culinary experience, love of food, and desire to work together as a family business, Blake and Amy opened their own bagel shop in 2011 to bring Montreal-style, traditional bagels to the Bay Area. They named the business Beauty’s Bagels to pay homage to the iconic Beauty’s Luncheonette in Montreal.
Starting as a pop-up, Blake and Amy quickly grew the business. They opened their first shop in Oakland’s Temescal neighborhood in 2011 and later a second location in Oakland’s Uptown neighborhood in 2018. Running this family business was a labor of love and it took a lot of labor – Blake’s and Amy’s and a large crew of employees. After nine years in operation, they were ready to take another big leap; this time away from small business ownership.
In September 2020, Beauty’s Bagels Shop was acquired by Wise Sons Delicatessen, with Blake and Amy joining the Wise Sons team as culinary director and manager of people and culture, respectively. The acquisition brought two of the most prominent players in the Bay Area’s bagel and Jewish food scenes together. The merger allowed Blake and Amy to take advantage of different strengths and culinary perspectives, offering an even better experience for their customers. The merger meant there would be some small changes to the Beauty’s brand, but their mission remained the same, to bring the nostalgia and love behind their food to a new generation. Wise Sons started selling Beauty’s smoked pastrami and sliced rye bread in their Oakland storefront, which was reopened with a full menu of familiar favorites.
The benefits of the acquisition were obvious for Wise Sons, as the addition of two East Bay storefronts to Wise Sons’ five existing Bay Area locations made the newly formed Wise Sons/Beauty’s team a formidable force. Now that Beauty’s and Wise Sons merged, there was a more comprehensive HR program and efficient operational systems behind the scenes. Wise Sons, as a larger company, had the resources to provide such structures. Joining the Wise Sons fold provided a bit more security for Beauty’s employees and ownership.
Ultimately, though, Blake and Amy, decided that they needed to step away from the business all together and make a larger mid-life change.
I asked Blake (who was a Renaissance business planning student and client of mine) to talk with me about selling his business and ask him to share his advice for other small business owners contemplating a similar transition. Here is my interview with Blake…
INTERVIEW WITH BLAKE JOFFE
What was your vision or inspiration for being a business owner in the first place?
I had run restaurant kitchens in the past and wanted to craft a culture and business with my partner Amy. We loved serving people and wanted to do it our way. The bagel shop experience was a big part of my upbringing and I wanted to pass those memories onto a new generation. It was fun, we enjoyed working together and the business did very well.
Do you think being a business owner helped you address personal goals or ambitions?
Yes, I think becoming business owners made us grow up quickly. It also showed us that we could do anything we set our minds to. We developed new personal and business skills as the business grew and we hired more and more people to make the business function better and to provide the services that were being requested by customers.
Why made you decide to exit, and did you have goals in exiting the business?
Mainly managing employees was the on-going and consistent issues for us. We were tired of the never-ending employee problems, difficulty finding morning bakers, and the burn out for all of us. Our goals in exiting included fair compensation for our work and the brand building that we did over the years, but we also wanted our business to live on. We also recognized (after the sale) that that would not happen unless we worked in the business. So, we were okay with letting go and moving on.
How did you go about finding potential buyers?
We were lucky enough to have a friend/business owner who we knew, trusted, and had a similar brand to us. Our company was easily incorporated into theirs. I had spent a lot of time with this friend and often voiced our displeasure about owning this business. At one point, they finally heard us and offered to buy us out. We were happy and ready to consider this option.
How did you assess the value of your business and choose an asking price?
We spoke to a valuation analyst and tried to figure out what our company was worth by analyzing our financials. We calculated what we wanted and negotiated from there. In the end, it was what the buyer was willing to pay, and we were ready to sell.
Did you make improvements or change your business model in order to be ready to sell?
No, we transferred ownership of the business at the beginning of the pandemic which made it easy to make changes since everyone in the restaurant industry was scrambling to make changes. During the business sale process, we learned about all the ways that you can make money by selling your business that you should put into the contract. For us it was the inventory, the brand, the equipment, and the pre-trained staff. We received cash and stock in the business, and we were happy to do so.
What were some of your most important lessons learned during the sales or sales negotiation process?
We were negotiating before the pandemic and had a dollar amount that we were happy with, but once the pandemic hit, I thought the sale was off the table and made this apparent to the buyer. That probably lowered the sale price once we settled. So, the advice I would offer is keep your cards close to your chest even if you are negotiating with a good friend. Our attorney was invaluable in making sure that we received as much as we could.
Are you still involved with Wise Sons or are you over and done with that relationship?
We’ll always be in touch with Wise Sons. We have been friends with the owners for 10 years now. They are currently paying our loan back that we took out to fund our second location. Our payment is connected to Wise Sons and this business connection keeps us close and well informed.
What advice would you give to other small business owners thinking about selling their business?
We felt like even if we didn’t get nearly the amount of money we wanted for our business, at least we are happy with what we’re doing now. To us, that’s the most important thing!
What are you and the family doing now?
We are living in Mexico and plan to stay for one more year. We negotiated working with Wise Sons but realized after some time that we were still burned out. However, we are both very happy with our mid-life awakening!
What advice would you give to others who are planning to be a small business owner?
Be prepared! Don’t rush through your business plan, it’s literally your plan to open a successful business – this is the time to work out, on paper, as many challenges as you can think of. Also, be prepared to bust your ass but make sure you have an exit strategy to remove yourself from the day to day business operations. Keep learning new skills.
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