Professional artist and business owner Frankie Johnson, faced an unexpected challenge when her business partner decided to dissolve their partnership.
With decades of experience as an artist and teacher, she was confident Mainstreet Art Centre could still thrive under her leadership. Johnson quickly sought guidance from her local SCORE chapter and learned how to successfully organize a buyout and new business plan.
Mainstreet Art Centre provides art classes, open studios, workshops, and supplies to artists northwest of Chicago.
As the new owner of Mainstreet Art Centre, Johnson reports that the company has been able to maintain a healthy level of profitability. The growing business provides a wide range of classes that are popular for professional artists, budding talents, and children just discovering the fun of art. In addition, the facility also sells frames, equipment, and art supplies and hosts demonstrations, workshops, and other art-related events.
While Johnson felt confident that she could run Mainstreet Art Centre as its sole owner, she had no idea about how to proceed with the buyout, particularly since the partner wanted their stake to be paid out in cash. She assumed that it’d take a business loan to execute the buyout, but even that was unknown territory for her.
"Buyouts were a complete mystery. I was a member of the chamber of commerce, which sponsors the local office of SCORE, so I went to SCORE," Johnson says.
Volunteer mentor Seymour Stoller met with Johnson and carefully examined Mainstreet Art Centre’s financials. He felt that the buyout could be funded entirely from company profits and recommended a structure for the buyout proposal. The details were worked out over two meetings, and after a series of negotiations, Johnson's partner accepted the proposal. Four months later, Johnson owned Mainstreet Art Centre free and clear.