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any business owners?

  • Thread starter Thread starter DepressiveJuice
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DepressiveJuice

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im thinking about buying a furniture shop from someone. the owner of the shop is a gym buddy of mine. thats how far our relationship goes so i dont truly know much about him. he said he is selling it because he needs to put his concentration on his other shop. anyone have any tips on knowing if a shop is doing good business or not? can i ask him to show me his past accounts receivables and accounts payables?
 
vixenbabe said:
Have him print his G/L and P/L reports while you're standing in his office....

Translation.

Look at his profit and loss statement for the last 5 years.
 
Code said:


Translation.

Look at his profit and loss statement for the last 5 years.

Exactly. Make sure he shows you all of his liabilities and which ones you are responsible for. Also get an inventory list on what you are getting. Is he financing it or does he want you to get your own? Make sure you consider the interest expense in your monthly nut(your bills). Tell him you only want to buy the assets and not the stock(if it is a corporation) so you can depreciate your assets instead of carrying his accumulated depreciation forward.

I would also get a lawyer to pen the deal in writing friend or not business is business. Good luck.
 
curling said:


Exactly. Make sure he shows you all of his liabilities and which ones you are responsible for. Also get an inventory list on what you are getting. Is he financing it or does he want you to get your own? Make sure you consider the interest expense in your monthly nut(your bills). Tell him you only want to buy the assets and not the stock(if it is a corporation) so you can depreciate your assets instead of carrying his accumulated depreciation forward.

I would also get a lawyer to pen the deal in writing friend or not business is business. Good luck.

Wha?

curling, is that really you?
 
do you know anything about teh furniture business at all? Because all this advice is extremely generic (though it makes common-sense). None of that advice has anything to do with the furniture biz...might as well be selling widgets.

Furniture stores :

1. they have to be big, so rent is high. Lots of square feet are needed to show all the furniture. (Compare this with a store that sells Matchbox cars)

2. You are often showing display items, because people will want other colors and it takes a few weeks to make them. Yoyu and your salespeople have to understand the cocnept of "any color and fabric" and be able to deliver that message to the consumer.

Combined with #1 above, you have to select which pieces are most likely to be sold or attract other buyers - there is no value to putting out 10 similar beds, for example.

3. Financing. Most people can't afford to spend $10,000 cash on a few pieces of furniture. Therefore, you may (depending on size and volume) be able to get intothe fiancing business. This is extremely lucrative if you do it right, but it;s not for the fainthearted or inexperienced.

4. Where are you getting your furniture? Here on the East Coast, much of it is made in the Carolinas. I am sure you can do better than that distance wise, but given the size and weight of the furniture, shipping is a big issue.

There are a few other things I would do too. It's in your best interest to PM me.
 
Most small furniture stores here are falling by the wayside.

The 'big-box' stores are sucking up all their business and driving them out.

This is happening in almost every area of the retail business.

Ie foodstuffs, furniture, hardware and home repair, electronics....etc......

(at least here, it is)

It's hard to remain competetive against million dollar corps.
 
i didnt see rainman

MattTheSkywalker said:
do you know anything about teh furniture business at all? Because all this advice is extremely generic (though it makes common-sense). None of that advice has anything to do with the furniture biz...

...There are a few other things I would do too. It's in your best interest to PM me.

i know dill about the furniture business. my brother does (who i will talk to about being a partner with me). he has been making furniture, and selling it on the side, for a few years now. i think this is something he would be interested in. i have no idea where i would be getting the furniture from. im sure the current owner will help me out wherever needed. the current owner also owns the building and property- so i would be paying rent to him. im not sure what he will be charging. its not something that im going to set in stone- its just an idea i am playing with. i want to work for myself instead of working for someone else. i know you like helping out people in situations like this so i will gather some questions with my brother and see if you can help me out. thanks for everything
 
Your best bet: Hire an exprienced CPA and have him go over all the financial statements. Remember, as the story goes, I can just sit down and make up some financial statements which will not trully represent reality - just b.s to make my company look good. That's why I suggest a very thorough investigation of paper trails and money; make sure he doesn't use the business for money laundering - it's always an issue.

Mr.X
 
I don't know much about business

but if I can share anything it would be to follow your instincts,

and also to come up with your own unique formula on how to run that business

yes you should consult busniness models and tohers ideas

but ulitimatley the business should be an extension of your self.

thus it wil run smoothly cus it is YOU
:)
 
DepressiveJuice said:
im thinking about buying a furniture shop from someone. the owner of the shop is a gym buddy of mine. thats how far our relationship goes so i dont truly know much about him. he said he is selling it because he needs to put his concentration on his other shop. anyone have any tips on knowing if a shop is doing good business or not? can i ask him to show me his past accounts receivables and accounts payables?

Due diligence.

You must investigate every aspect of your new venture.

No one sells a business that is profitable.

What do you know about furniture anyway? Think about it.
 
have him hire a cpa that will audit the business and give reasonable assurance that his statements from the last 3-5 yrs are valid
 
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