So, an opportunity has come up to takover/purchase the family business. Now, I've successfully managed the business for many years, but I'm not exactly sure how to go about this. Right now I am in a very steady job, I like it, and will probably do pretty well here. On the other hand, if I can do what I've done in the past, I have the potential to own an extremely successful business, not just run one for somebody. Here's the kicker. If I were to decide to do this, I have no idea where to start. I know I would need a liscence, some sort of insurances, some way to protect myself through incorporation or the like. How would I go about funding this? Has anyone ever applied for a bank loan for a business? What all is required? Is that even a smart option? To be honest I've never been this torn about anything in my life.
Well If your going to take over the family business it should already be incorporated and have insurance etc etc,..Yes you can go to a bank for a loan..The business needs to show how it will payback the loan etc.Is there real estate involved/dwelling??
If I take it over, more than likely I would have everything in my name as to try and avoid any past issues affecting me. As for real estate, would be a lease, but a lease to my wife/mother-in-law, so the location is there, I would inherit a couple long time employees. here's the building, the portion on the left is leased out, I would have the shop on the right
+1 my only other suggestion is sit down one night make a check list of everything you may over look, want to do with the business, structure of the agreement and then go one step at a time and check off that list. Sean, one thing you need to look at is how happy you are right now before taking anysteps. I know you have made this your life for quite sometime, but it did not conform to your long term goals. Are those goals still there? Will they be available if you take on this?
If it is a family owned paid for business, why not ask if you can make monthly payments and have the family carry the paper? Also, how much do they want? Will the business support operations plus your salary plus the new purchase payments? C.
Not to sound like a smartass but after 20+ years of running my own business, your days of being drunk at 5:00 in the morning are probably over....big responsibilities!!
Sean, All give great advise. Didn't the family shut down all the stores but the one on Lomas? If so, why? That is the most important question that needs to be answered before going forward. Since you left the company almost a year ago, what has been going on behind the scenes to have the family close all of the other stores and then want to put the business up for sale? I know that you did very well when working for the family, but like Chris said, it did not fit into your long range goals. Your current career makes you happy and fits into your goals. Security is another important question. Good luck buddy. Call me if you need assistance changing over the Business License and Tax ID's.
Part of the problem what that when the divorce happened many years ago, the court gave my mother-in-law 6 stores. Prior to the divorce, the company had hada hard time keeping up this these and and keeping them manned. We walked into a bad situation having a bunch of stores, debt from the old company, and having to start a new business from the ground up, with the previous other 1/2 of ownership trying to make things difficult to run his ex-wife out of business, like a friend of his making a false insurance claim from 3 years ago for someone supposedly cutting their hand on a piece of glass we sold them for a book shelf and losing a years worth of work from it, same ex filing for an incorporation under the same name before my mother in law could under her business name with her information and running up debts under it, and paying old employees to make false reports to the DOL, then having the company he advertises with broadcast it on the news, with events that had not even happened yet (eg. the audit turned that the company owed over $300k in unpaid OT, when there had never been an audit done on the company period until the companies lawyers requested one done for the court proceedings that followed). Anyways, it's always been an uphill battle for my mother-in-law, but even before the divorce, we had been talking about centralizing the business, in the type of business we have, there are not enough good and experienced people to really keep that many stores manned. So as leases expired we cut back little by little centralizing everything out of the stores that the family owned, not leased. My quitting and attempting to go to school really wasn't the best thing that ever happened to the company, mainly because I was pretty much the best performer the company had, every store I worked at had it's best sales months while I worked there, and usually with less people it seems that I could get more out of the good people we had, and cover many bases myself. So to give an idea of the actual store I would be taking over. Right now after it's all said and done, the store needs $35-40k/mo to keep it's head above water, this is with the 1 store and 10 employees. If I took it over, it would be dropping it down to 5-6 employees since I would be managing all the back end stuff with a little help from my wife who has been doing this for better than 10 years. Previously when I was running this business I was averaging $60-70k/mo. in sales with some of the summer months in the high 80-mid 90k range. I am more than certain I can do that again as I have about 7 years of similar performance that show the same thing, a year later people still come in asking for me and talking about me, people who were very loyal to how I conducted business with them. I was able to drop down in our west side store, which was hard to find and had absolutely no advertising and still pull $36k in sales from 3 people with pretty much repeat customers and friends as my sole source of work. So that being said, I'm not concerned too much about succeeding with the 1 location, I know how to make money out of the stores. I think I am more worried about the chances of any of the past issues causing me problems if it was my company, and what I would need to do to help prevent this. I'm also worried about not having the right taxes, bookkeeping, insurance and getting royally screwed down the road. Nice thing about the situation is that I can always walk away from it into a good paying job, I'm not worried about my own personally income so much as supporting my employees and making sure the company is a healthy, stable company, I mean one of the employees is a close family friend and has worked there 15-16 years. Needless to say, when your wife springs things like this on you at 2 AM, you don't get a lot of sleep, I have a lot of homework to do, a lot of which will involve trying to get ducks in a row on the way I want to organize the business. On the positive side, there are many ideas I always thought would benefit the company, some a bit different from the way these types of companies typically do business, I just never had the power, nor desire since it wasn't my company to really press on with it. I like the industry, I did it for 9 years of my life, I didn't like the outlook ovf being stuck in the same position for 5-6 years and no chance of that changing as I was as high up as I could ever go.
Wow, that was a long time ago. A little update, on year 4 in business, cut things way back, moved things to more quality over quantity and have made a nice little niche for myself. Now I am opening a cooking store next door and trying to have 2 businesses at the same time.
Heh, don't have to go far for lunch that way Were you able to completely insulate yourself from any past liability or risk when you took it over? That sounded like your main concern. Something previously unknown from the past popping up and putting the hurt on you.
Yeah, I pretty much changed names, corporations, etc. Essentially I kept the phones numbers and location. That being said, a few things popped up that I helped some people with even though it was issues with the previous company, I explained the change, they were receptive to it and appreciative that I still helped them. I still get people wanting warranty tint work from 5-6 years ago, but they have been understanding when I explain that was a different company using different film, and not only did the shop that installed it close down, the manufacturer of the film on their car (SunGard) went out of business also, so the best I could do is accommodate them with a nice new tint job. It's been a fun experience, I don't regret it. We have been working like hell to maybe retire in our 40's and travel, I think this will be our key to that.
In hind sight, knowing what the economy did from 3 years ago to now, would you still have opted to make the move? Kudos for surviving much less thriving in today's economy...congrats!
Eh, probably as I hated my job in the call center but didn't really want to do what I liked doing for the shops around town, most of them are pretty shady. That's kind of what I am figuring, if I can make it in this economy without racking up huge debts, I will be set for when things turn around under our new president. In a couple years.
Nice update. I like hearing these types of stories. So what did you knock the number of employees down too? Are you happy that you did make the move?
I cut it down to 2 producers from 2.5 producers and 2.5 consumers. Essentially I had a sales girl I repeatedly caught not doing anything, jump-starting the company car at the park a couple times was enough for me to put her on straight commission sales. She didn't like it and decided unemployment was a better option for her, which it was. I had a tinter that decided he wanted to stay home and drink, so I let him, he was work, and he produced more than he cost, but he wasn't that good and wasn't the most reliable. Lastly I had to let a front desk person go, the numbers were way down and I couldn't see why, I got wind that he was turning work away that we could have easily taken in, so we parted ways and the company did a 180* turn. It meant a lot more work for my wife and I, but sales were up, income was down, reputation and quality of work was up, just been riding that train for a while. Last month I took on a trainee hoping he will be useful by summer and I don't have to go through the BS again with this being someone trained in my ways of doing things instead of taking in the bad habits of a previous company.
