RedTire

Background
Everyday businesses close due to a lack of available and willing management to succeed the business owner/founder with a subsequent loss of equity to the owner, tax base and business services to the community. This is more common and most economically damaging in rural areas where a loss of younger, talented population ("brain drain") is also occurring. RedTire provides a way for local owner/founders to Redefin their ReTirement replacing them with University educated and capable graduates; RedTire will provide the necessary human resource, financial and operational coordination to enable this transition.

Mission
Retire LLC's mission is to help sustain the economic and cultural wellbeing of smaller Kansas communities by facilitating the transfer of ownership of pharmacies, health practices, and family-owned farms from retiring/outgoing owners to University of Kansas and Kansas State University graduates who possess the expertise and energy to manage and grow those businesses for years to come.

In effect, RedTire acts as a matchmaker between retiring small-town Kansas business owners who need an opportunity to sell their business and transition into retirement, and University graduates who have the expertise and ambition to run those businesses.

RedTire will perform five primary functions to facilitate the orderly management transition from retiring business owners to the next generation of college-educated talent:

  1. RedTire will screen businesses to identify appropriate purchase opportunities (minimum criteria for a business to be considered eligible include annual revenue of at least $750,000 and positive net income, more detailed screener criteria available).

  2. RedTire will screen and train University students to identify appropriate candidates for business ownership, based on a process of aptitude, attitude, psychological testing and interviews (more detailed screener criteria available).

  3. RedTire will then match qualified University students with business opportunities appropriate to their background, area of expertise and location preference.

  4. RedTire will negotiate purchase and transition of ownership terms with the retiring/outgoing business owner.

  5. RedTire will negotiate and act as guarantor of the loan that the University student will use to purchase the business from the outgoing owner.

As part of their agreement with RedTire, outgoing business owners must agree to remain involved in the operation of their business (and training of their replacements) for a period of three years. During that time the owner will receive annual payments for portions of the purchase price of his business, and will continue to receive a share of the business’s profits proportional to the amount of ownership equity retained. Terms of a typical transition/purchase process are outlined in the table below:

red tire puchase process

Funding
RedTire will receive its initial funding from government grants and/or private contributions. That funding will be used to pay salaries for a staff consisting of a company director, business valuation analysts/negotiators, as well as SG&A expenses (legal structure of the RedTire organization is TBD), and more importantly to collateralize the businesses new owners' purchase loans.


The University of Kansas prohibits discrimination on the basis of race, color, ethnicity, religion, sex, national origin, age, ancestry, disability, status as a veteran, sexual orientation, marital status, parental status, gender identity, gender expression and genetic information in the University’s programs and activities. The following person has been designated to handle inquiries regarding the non-discrimination policies: Director of the Office of Institutional Opportunity and Access, IOA@ku.edu, 1246 W. Campus Road, Room 153A, Lawrence, KS, 66045, (785)864-6414, 711 TTY.