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    5 Replies Latest reply on May 21, 2009 9:29 AM by Bridge

    Trying to buy an established, profitable business...

    KeepTrying Newbie
      My Wife and I have the opportunity to buy the only Italian Resturaunt located in a small college town, in Middle Georgia.

      This place has been in business for 11 years, during which time they've expanded twice. It now occupies three spaces of a four-space strip-center.

      The Pros:
      • My Spouse has Restaraunt Management Experience.
      • The business is grossing an average of 10K per week, against expenses averaging around $7600.00. With NO marketing whatsoever.
      • The majority of the staff is willing to stay on, including all the back-of-the-house employees.
      • There is a lack of competition in this area. Not only is there no other place to get Italian food, there is only 1 other "Sit-down Restaraunt" in town (a Mexican place).
      • The lease will run for 3 more years.
      • There an no judments/liens against...no pending lawsuits...no monies owed...no deliquent taxes...no big purchases imminent...yadda-yadda.
      • The price includes everything, all equipment
      The Cons:
      • I have no Restaraunt Management Experience...though I have related management/MARKETING skills/experience.
      • A heart attack while uninsured (I'm fine now, thanks!) cost me my credit rating...We'll have to find finacing from a "non-traditional source".
      The amount we'll need is 60K.

      Any ideas on where I can find an Angel?
        • Re: Trying to buy an established, profitable business...
          ggoodard Adventurer
          I would like to open a dialogue with you. Please email me your contact information ggoodard@aol.com
          • Re: Trying to buy an established, profitable business...
            LUCKIEST Guide
            Trying to buy an established, profitable business...

            Welcome Joe. YES I have ideas. To find an Angel, you will need a business plan.

            Have you seen prior year tax returns?? Do you have a Lawyer??

            LUCKIEST
            • Re: Trying to buy an established, profitable business...
              NoBullFunding Scout
              Have you asked the seller to hold a note? This a becoming quite prevalent for small business acquisitions because lenders got burned financing deal exactly like the one you described.

              Based on your description, an investor most likely won't finance the business. The failure rate is unfortunately too high.

              If you are interested in talking this opportunity over, I have some critical questions that you would really want to consider before going forward, such as:

              • $60K seems cheap for a business that "clears" $128K per year, especially when it includes equipment. What's the catch?
              • Does your wife have experience running every single facet of a restuarant? Was she responsible for P&L? In other words, was she responsible to makeing sure it was profitable, or was she just running the operations? Running a business and running a profitable business are two very different things.
              - How involved are the current owners? Are you committed to being just as involved? They've built up goodwill over 11 years, and while the name will be the same, people who are regulars will have their eye on you. If the experience changes (food, service, ambiance), that goodwill can dissipate quickly.

              These are just a few issues that I've seen come up...

              Best of luck,
              NoBullFunding
              "Contact Me For a Free 30 Minute Consultation at NoBullFunding@gmail.com"
                • Re: Trying to buy an established, profitable business...
                  KeepTrying Newbie
                  You are correct. 60K IS a low figure for a thriving business, however, in this case it's correct.

                  The business is currently owned by a husband and wife team. The wife ran everything, and the husband, who was an over-the-road Truck Driver, checked in only intermittently...he's just not the sociable type that his wife is.

                  Two months ago, the wife had a major health reversal that left her unable to work. The husband is unable to care for her the way he'd like, as the business is very time intensive.

                  Since he's having to pick up the slack, wants to sell the business and enjoy retirement, rather than going to the trouble to hire and train a general manager, and the assistant that he'd need, to free him from the day-to-day operations.

                   

                • Re: Trying to buy an established, profitable business...
                  Bridge Navigator
                  I would suggest you get some professional advice from a Business Broker. They specialize in assisting individuals buy & sell businesses. Even a "small" transaction can cause major financial problems if done wrong.

                  I am a business broker in FL and President of one of the trade associations and would be happy to refer you to a professional who could help.

                  Greg Dupuis
                  President
                  Bridge Ventures, LLC
                  www.bridgeventuresllc.com
                  813-343-2214