Any pointers?

The place is a mo, and pop store in Maine. He sells fuels, beer, soda, sundries, etc. He makes pizza, subs, dogs, burgers, etc.

The place is small but pretty busy. He's sitting on 13 acres and the asking price is 220K. The current owner lives in the basement apartment under the store.

I would likely try to secure some funds from the VA, but in all reality, I'm not an educated man.

I have run businesses in the past. I ran the club in the Coast for 6 years and I was the GM of a restaurant for 18 months

I don't even really know where to begin.

This would require me to quit my job with the USPS and move back to Maine or at least seek a transfer with the USPS and carry mail till I'm comfortable that we'll be OK.

I was a cook in the Coast Guard so food and customer service are right up my alley.

 

You can't carry mail and run that business unless you hire someone to run the place for you while you are out.
But you already knew that.....
Are you ready to work very long hours 7 days a week?

 

I'd check with the local Chamber Of Commerce to see if you can find a public business report on that place. You will want to see if it's a profitable or waning business venture. The mom-n-pop places are dissappearing everywhere. One place i use to investigate local businesses is loopnet.com Best of luck to you.

 

Without knowing anything about the value of the land, I'd say that would be something you'd want to know. Also, you need to see the books on the place over the last several years. I've heard that setting a price to sell a business should be approximately 5x the annual income of the place. If this store has made $44k over the last few years, the price is about right, based on the little info here.

 

Something Does not seem right about the numbers in my head. That being said, I truthfully know nothing about the location you are speaking of! Definetly check the books for at least the last five years. 13 acres, an established buisness and profit for $220,000 sonds a little fishy!!

Good luck with whatever you decide.

 

Try and find a good manager to basically run it for you if the profit margin is enough for his pay.

Then you could keep your current job without TOO much hassle, and have a place to retire to.

Tangible assets are never a bad thing.

 

You can't be an absentee owner and have someone run a cash business for you. I just won't work. Unless it it someone you really, really REALLY trust.

Even the books may be skewed. The owner is living in the basement for cryin' out loud.

Does he pay himself a check every week? If so, how much? Does he have health insurance? If so, how much?

Tim, you have to first look at where you are and where you will be if you make this move. I would bet money that your personal cash flow will suffer....significantly.

Also, what do you think the VA will do. Don't count on much, if any $$$$. The SBA has Vet programs but, you still have to find a bank that will take the note. They do have education/training programs for current and future small business owners which may even be mandatory for SBA/VA programs. You could take the classes where you are now?

Finally, you need to look into your wallet and ask yourself if you can carry the payments on a $ 200,000+ note....if you have no revenue from the business.

 

Good points....

 

Damn...You're good!! Out of reps for ya, but I tried!!!

 

My daughter, who is 17, works part time at a convenience store in my home town, population about 700. Sounds like the store you are considering buying sells the exact same type of merchandise as the one my daughter works in.
One of the biggest problems that the store owner has is trying to find and keep good employees. You've got to remember that the employees will be making minimum wage, and as far as a work ethic, quite often you won't get the cream of the crop. Quite a few times, he has found that the employees were basically stealing him blind, despite the fact that there are surveillance cameras everywhere. Occasionally, one of them quits without giving any kind of notice whatsoever or they just don't show up when it's time to open. Actually, some of the best help they have is high school age, but the older employees always whine because the young employees are not old enough to sell alcohol and an employee over 21 has to suddenly punch the register keys. (That law might vary in your state)
A few employees have also sold alcohol to underage customers and the owner has been hit with some heavy fines.
My recommendation to you: Before you buy this store, work in it part-time, especially on weekends, the late/early shift and see for sure if this is exactly the type of work that you want to do.
My daughter will be going to college in another year and can't wait to do something different.

 

Don't forget the tax bite when you are considering your expenditures and cash flow. That's some kind of convenience store if the footprint is 13 acres . It's probably not that big but your property tax bill will include that area which adds to your overhead without being necessary to the operation of the store. You might be able to subdivide and sell off that unused parcel but initially it will cost you some money in taxes and possible insurance. Consider the opportunity costs associated with leaving the USPS - benefits / how close to retirement / etc. A lot to evaluate but you won't know until you look into it. Good luck with your research.

 

Tim currently lives in VA and the store is in Maine. So sticking his toe in the water probably won't work out but, that is a GREAT idea.

Don't get me wrong. I am a BIG fan of business ownership and highly respect the guts it takes to even consider it. But, if someone has a job....a relatively good one for these times....I am more apt to play the devil's advocate than the cheer leader.

Let me see if I get this right. Tim is from Maine. Has family there and his beloved daughter is going to be leaving for college in.....wait for it....MAINE!

Sometimes you just gotta do what you just gotta do but, you have to know that when you think you know everything about the opportunity....you find out you know little. Same thing with the money....there is never enough.

So back to the deal. $220,000 for the land. the building, the inventory, the good will, the business and future earnings....think about it. This one needs much further investigation.

In the meantime, let's borrow some money....

If you can get money, you will likely have to lay out $ 40,000+ so let's say you borrow $ 180,000. At 7% interest the prin & int will be about $ 1,300.00/month. Then property taxes and what ever else Maine has up their taxing sleeve to reach in your cash register. The best you can likely get is a 25 year note because of the realestate...without it you would have a hard time getting a 20 year term.

If you can lay out $ 40,000+ to get the loan, you have to consider your lost USPS income and what the variance will be. Then you have to determine if you can stand it....and for how long?

Then the ownership. The first thing you have to do is.....nothing. You didn't build it. Don't try to change it and make it better until you understand the business and your existing customer base. Remember, you are the new kid on the block. Not the long time customer base that has an emotional connection with the current owner that actually LIVED ON SITE. You cannot replace, or enjoy, those relationships with the signing of a contract.

There is much, much more to consider. Be very methodical and try to keep your heart out of it...at least don't make it any more part of the equation than it already is.

 

Spot on.......

 

Lots of good advice here Tim...if you decide to go for it...be prepared to give up your life...these mom and pop stores are all consuming. Another thing to consider...Mainers are a tight knit bunch...they might not take kindly to an outsider.

Good luck!!! BTW...the store wouldn't be near Orono by any chance...would it???

 

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I thought about buying a local small bar in my area but after checking those forums out I realized that its not for me at this time. Maybe when I'm retired I may look into it again.