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  • Thinking about purchasing a business that fell into my lap, but need some advice

    updated 1 year, 1 month ago 0 Member · 1 Post
  • Luna

    Member
    August 31, 2021 at 12:13 pm

    I am currently employed with a company as a Systems Engineer for a telecommunications company, I make decent wage, and I love what I do, but I was just offered a chance to purchase the company my Father works for. He works for a carpet store that sells to builders, subcontractors, and homeowners. They also subcontract installers to install flooring for them. The company has been in business for over 20 years and seem to be fairly successful. The original owner passed away a few years ago, and his wife is looking to sell the company to someone who will continue to run it similar to how it is run now. It is a very family oriented company. My father wants to be apart of running the business but is getting older and does not really want the extra stress of owning the place. My parents used to own their own flooring company when I was a child so he and my mother both have experience with this type of business, and are willing to run the company basically as it runs today. I am going to be taking the current owner out to dinner to discuss things further within the next week or so. What are some things that I should remember to better prepare myself for the meeting? This is the first business I will have owned, so I want to make sure all things are in check before even thinking about pulling the trigger. I was going to ask for the last 5 years financial records including all overhead costs, rent for the building, employee wages, quarterly earnings, utility costs, etc. As a baseline to see what the company is actually profiting after it is all said and done. She has mentioned to my father that she is willing to let the company go for around 250k dollars, she only wants enough money to basically get her through the remainder of her life, she is very elderly, I would say in her upper 70s, and her step daughters want nothing to do with the business. What would the company need to be profiting yearly to make that $250k price tag worth it? Also would it be feasible to keep my current job as long as I had a quality staff to keep the business running how it should? In the future I would love to own my current company, and have already been in talks with the current owner of my company now and he is looking to sell for around 5 million dollars. Would owning the first company help me pursue buying another business? My last major concern is getting a loan to purchase the company. I do not have 250k dollars laying around to throw into this place if it is worth it, however i have a decent savings, and a great credit score. What kind of loan should I look into, and what advice can you give me to get me on the right track. Thanks again everyone and I look forward to hearing what everyone has to say. – by /hq/FartinDarton – –

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