Anybody own a Brick & Mortar business

rileypool

rileypool

paper clique fiend
Mar 8, 2007
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Tulsa, OK
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I know of a guy selling a local established business because him and a business partner had a falling apart. I've been there a couple times and I've always been pleased with my visits.

I'm thinking about buying this business as the only thing that will change is ownership. Everything in the business stays including employees and assets.

For what it's worth I would have a business partner as well and he would do the managing of the business as he's familiar with the owner already and that's how we already know about him wanting to sell. The current owner has already offered to help us with anything we may have questions about. He he owns another store in a different community already and can't manage both.

Has anybody here ever owned a brick & mortar business? What were your experiences and thoughts?
 


I've owned and operated vinyl sign and screenprinting shop for the last 5.5 years. Before that I was a 1/3 partner in another one. That ended in litigation. Business partners suck, someone always expects more and feels like they're getting less than they're putting out. A business partnership is like a marriage, except you get fucked more.

Sounds like you'd be in a different situation as an absentee owner but I've seen those scenarios go downhill fast before as well.

Good luck bro.
 
rileypool said:
Has anybody here ever owned a brick & mortar business? What were your experiences and thoughts?
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Everyone keeps two sets of books. The measure of a firms viability most difficult to fudge is cashflow analysis. What comes in, what goes out, and how timely that occurs.

Don't forget to get non-competes. Make sure employee retention is legitimate in the face of an ownership change (many owners sell businesses as turnkey, knowing that they can raid the staff later, or that staff will walk anyway)

Talk to the firm's bank. Find out if they are friendly with their banker. If they are, get a second opinion from another bank on the credit worthiness and trustworthiness of the firm. It is very easy to get a banker in your pocket.

If you take on a partner, make sure you have leverage. It would be nice to pretend that leverage shouldn't be necessary in a relationship with trust, but money and ego do funny things to people. Better to have a big stick and never use it, than to be empty handed and cornered in an alley.
 
rileypool said:
I know of a guy selling a local established business because him and a business partner had a falling apart. I've been there a couple times and I've always been pleased with my visits.

I'm thinking about buying this business as the only thing that will change is ownership. Everything in the business stays including employees and assets.

For what it's worth I would have a business partner as well and he would do the managing of the business as he's familiar with the owner already and that's how we already know about him wanting to sell. The current owner has already offered to help us with anything we may have questions about. He he owns another store in a different community already and can't manage both.

Has anybody here ever owned a brick & mortar business? What were your experiences and thoughts?
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Obviously it depends on the business.

Partnerships are tricky especially when it's 50/50. You have to have clearly defined roles, etc otherwise it's going to be a pain in the ass.

Do you know anything about the business? You can't just trust someone to manage it. What are the margins? Risks? If you're just throwing your money in without taking an active roll you might be better off just investing in the market.
 
I have owned 3 and still own one now. DO NOT enter in a partnership unless you are extremely experienced. Partnerships require special situations to work.
After you buy it nothing will remain the same and you will turnover employees, always happens with a new chief, if it doesn't you suck and you have been pwnd by your employees.

I see that it is a store of some kind. More than likely every fucking employee there is stealing, they all do. They are either stealing product, cash, supplies or time.

If you think you are going to hire a manager to run it for you then you are retarded. Managers in a small business must be developed by you and it takes time, sometimes years to FIND and train someone to fill your shoes.

Owning a brick and mortar is tuff, learn the ropes and it can be rewarding.

good luck
pm me if you like

btw..I just got out of 2 years of litigation with an x partner. It was expensive as hell and almost did me in emotionally.
 
My circle jerk of friends that are self employed ALL agree partners suck and to avoid. The common thread in most stories has to do with spouses getting in the way of fair equity. It's usually a wife that thinks her husband should be getting more of the pie for some vag reason.
 
One more thing, related to what rawbones wrote.

If you are the absentee partner, your partner will steal from you. That's a given. He will be expensing personal items, and taking care of personal business on company time. Not to mention, if you are both getting an equal cut, then he's going to resent taking a wage while making you a profit share. That's how workers develop these idiotic notions of wage slavery.

The alternative, is to pay him a generous wage, and while you are an absentee, watch the books like a hawk. That means going through individual invoices, and reconciling bank statements yourself (or by a trusted interested party like say, one of your kin).
 
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A few suggestions (some of them reiterating what other above have suggested) and things to watch out for.

Do the books yourself, or have them done by someone you really trust. And do them every single day, reconciling cash. As others said, people will steal from you if they think they'll get away with it.

Hiring a manager. Be on his ass, give him a fair wage plus an incentive to do well. If you can get a non-compete agreement from the manager, do it. Though in many jurisdictions it won't be binding. Make certain that you control key aspects (purchasing relationships, key clients, banking), in particular key relationships, of the business.

Have the manager train an assistant manager. Keep a close relationship with the assistant manager as well so that he's in your pocket, not the manager's.

Non-compete with the seller(s).

Audit the books before taking over. You don't want to find out that there are hidden or undisclosed liabilities.

Go over all leases in detail, in particular checking for back-end balloon payments or ones that expire shortly where you could lose the equipment.

Make certain that all third parties are informed of the transfer of business so that your signature, and not their signatures, are valid. CC processing, leases, inventory purchasing, bank accounts, etc.

Confirm that the landlord permits a transfer of the lease with the transfer of business ownership.

Make certain that the sellers' representations are all inclusive: From environmental issues to potential/pending litigation to the financial statements.

Don't expect to be an absentee owner. You'll still have a lot of work, in particular for the first few months.

Always have a backup. What if the manager walks out in 2 months? Or a horde of rabid midgets gnaw him to death. Plan for the unexpected.

Get a lawyer.
 
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I'm partners in 2 liq store, 1 gas station, 1 bagel store, and hopefully a motel, a bar/lounge type of thing and working on some other ventures soon. Everythings been fine for the last couple years. I have lawyers watching lawyers, accountants watching accountants, etc..

I don't trust anyone.
 
I've owned a clothing store and a small neighborhood lounge. It was all about location and exit strategy for both of those businesses. The partnerships were fairly iffy, I worked with real assholes and I wouldn't undertake something like that again unless it was all on me.

In fact, that's kind of the plan with my internet riches. I have a stellar concept for a college town franchise that you just can't fuck with. I just need to cop some M's. ;)
 
avoid partners at all costs, especially family / friends.

my buddy down south runs his own screen printing shop that i've helped out with, and now all our dead beat friends are trying to get in on his action because he is getting successful.
 
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