Purchasing a business.

If you, your husband or your accountant can't answer accounting questions, I would imagine, this business isn't a very good idea. You said yourself, you don't mess around, so why mess aroumd with something no one can figure out ?? Walk away and find someone else to buy...... or jist establish your own business and put some sweat into your future..

 

Without having detailed financials, your cash flow number and any valuation derived from that is pretty much meaningless. Look at tax returns, owners salaries, depreciation etc to get a true number. There are different ways to valuate a business and your accountant should be able to give you a number. If they can not, you should consider shopping for another accountant before shopping for a business.

 

I'm a risk taker and my perspective is that you are very naïve and have a funny feeling that you were far removed from any acquisitions at the companies you worked for. You don't seem to have a good grasp on reality and think that throwing money at things is the smart way to work and grow. Rest assured, what you think is a large sum of money is not and will very quickly fly out the window when your eyes are bigger than your stomach.
Now back to your valuation, why would you even offer 100k? If they take no salary then @40k it's a big loser. Now go an evaluate why it's a loser and chances are that you will find that these sort of "niche" markets are so constrained that there is little to nothing you can do to increase your margins. They probably lived off of a modest amount of money and enjoyed what they did but you are criticizing them and blaming it on them working too hard. You don't even understand their financials but you think that you can smarten it up. It's an asset sale pure and simple. At this point the assets are not producing enough to be a viable business.

 

"Speaks to your soul"?

Acquire mom and pop sign and embroidery shops and turn them into a billion dollar business?

I'm sorry, but your entire vibe comes off very plastic almost to the point of my thinking this is some kind of trolling exercise. There isn't room in our industry for more get rich quick schemes and another FASTsigns, SIGNWORLD or SignsNow franchise type business model.

Do either you or your husband have any graphic design or creative talent or experience?

You'll soon find that without any of it, you'll be paying others do the single most IMPORTANT task of any creative endeavor. If you skimp on that part of it, you'll fail. It's that simple.

Are you comfortable pursuing a business that may be committing tax fraud?

How does that jive with your business ethics, expertise and that of your accountant?

 

Who gave you the value of 70K for the equipment? Instead of your accountant I would have a business broker or an accountant who does more of this type of work.

 

Oh please......... Give us all a break. My "attude" is born of being in a craft for 40 years and seeing more than its fair share of get rich quick schemers come and go. You two gave up six figure incomes and you are financially blessed so you could come disrupt a craft whose best practitioners have decades and decades of experience, talent and skills that you think some kid can pick up in a few months. So you come here to brag about your business acumen but can't even see a loser business committing tax fraud and still expect any of us to take you seriously?

I also had a successful B&B for 8 years until the AirBnB, VRBO, etc. hobbyists killed that industry thanks to lack of regulation, government and insurance oversight. Just like the taxi cab industry is seeing itself gutted by "entreprenuers" wanting to turn driving people from place to place to yet another get rich scheme while doing very little.

Many of us weren't born under a cabbage patch in order to buy your schtick. Which frankly, comes off more like used car salesperson than seasoned corporate veterans.

Many of us have seen and SURVIVED through all sorts of labor killing technical innovations, business consolidations, wholesalers playing both ends of the business supply chain, etc.

Grossing something isn't the same as what you net or a sign of success or even competence. It doesn't even reveal what you had to invest to generate that $150k.

 

I go to the horse races all the time and if a women says a certain horse "speaks to her soul" I am putting money on that horse.
You and your husband seem to have a good grasp on business, if you feel that way, go for it. Good luck in your goals.
Don't be affected by the nasty attitudes, those are people who bet the wrong horses.

 

Have you considered investing in real estate, or some other high risk / high reward venture?

Typically, people who gravitate toward a career or business in the visual and creative arts do so for just about every reason other than the money.

Granted, a business has to be profitable, but dollar signs aren't the first thing I think of when I wake up.


JB

 

Something doesn't seem kosher here. If examining the financials leaves y'all confused on where money is going, then that business isn't being open (especially if they are trying to sell). That alone would steer me away from the business (and my business is very focused in the same thing that this business for sale is/was. While I'm only at 24 yrs in this trade and they are at 30, but I digress), because if they aren't being open here, where else are they not being open about?

I do like to mitigate my risks, I may take risks, but I like to do educated risk management.

I've got to ask what has been done as far as a C/B outlook on this purchase, how long would it would be for ROI.

I've got to tell you, customers may not go with the new purchaser. While you may like those connections that the business has, it may not translate to those being your connections now. If your lucky, you may get one order out of them and hopefully they won't notice any changes with the product output that they will stick with you, but there is still no promises on that unless they are contractually obligated in some manner. Sometimes, at least at one time, what keeps people doing business with a business is the person that they were dealing with. Take them out of the equation, that hold isn't there anymore (granted that type of loyalty hasn't been in force for quite a while).

I'm getting this "fly from the seat of my pants" vibe here. I can't put my finger on it, but that's the vibe that I'm getting. Not trying to be rude, just being honest.