Good day to you, readers. I'm writing this on a Friday, one week after making the offer on the store. Needless to say, it's been a little busy here in my world. I'm still working full-time at my current job, so I am certainly looking forward to this weekend, when I can take a little time to breathe.
I mentioned in my first post that I've attended an awful lot of meetings during the last month. I'd like to talk a little bit more about that today.
It's funny, when you go to buy a small business for the first time, and suddenly realize you have absolutely no idea how to buy a small business. It's kinda like there's this lightbulb in a little thought bubble above your head, but instead of going on, it goes dark. And then, those doubts start creeping in and you think, what on earth am I getting myself into? Remember when Donald Rumsfeld (cue uncontrollable shiver) talked about the “unknown unknowns”? That was basically me, last month.
It was surely a relief to begin talking with and learning from people who do this sort of thing for a living. Let me tell you about all the helpful people I've worked with to this point:
My initial contact, and primary source of information through this entire process is Gary, the commercial business broker. He is actually the sellers' agent, but, as he said at our first meeting, he will end up working a lot more for me by the time we're all done.
I first met with Gary on April 15. I asked Jan Irene to come along to the meeting, as I highly value her business expertise and her perceptive impressions of people. I came prepared with a long, long list of questions. I had brainstormed everything I could possibly think of to ask about the store. Gary still jokes about my huge list of questions a month later. He was very well-prepared to answer just about everything I asked, and I immediately felt I could trust him. Also, he didn't make me feel dumb for asking really basic questions, he just took the time to answer everything. So far so good!
Later that week, I met with the current owners of the store, Carl and Jo, together with Gary. They answered all my new questions about the day-to-day operations of the store. I felt very comfortable with them, which is important as we'll be working closely over the next couple months. Carl demonstrated the excellent, perfectly customized point-of-sale and inventory management system, which was especially impressive. I felt I could see myself stepping into these peoples' shoes.
Throughout the next couple weeks, I continued meeting with Gary every few days. But there was an issue. I knew I would love the job. I knew I wanted to own my own business. There was one huge thing I didn't know: how much should I offer?
Business valuation is a tricky thing. What I've learned is, there are a lot of different methods, and each will give you a different value. But for someone like me who has no experience with this type of transaction, it ends up just feeling like one big guessing game. So I decided it was time to call in the big guns and hire a CPA and small business consultant named Kyle. After just one hour talking with him about my valuation questions, he had me thinking of the purchase in an entirely different way: as an investment. Well, duh. Talking with Kyle was absolutely critical to me feeling comfortable with taking the next step...an offer.
To sum up, here's what I've learned so far:
Next up: fundraising!!
Love to you all. Amy
I mentioned in my first post that I've attended an awful lot of meetings during the last month. I'd like to talk a little bit more about that today.
It's funny, when you go to buy a small business for the first time, and suddenly realize you have absolutely no idea how to buy a small business. It's kinda like there's this lightbulb in a little thought bubble above your head, but instead of going on, it goes dark. And then, those doubts start creeping in and you think, what on earth am I getting myself into? Remember when Donald Rumsfeld (cue uncontrollable shiver) talked about the “unknown unknowns”? That was basically me, last month.
It was surely a relief to begin talking with and learning from people who do this sort of thing for a living. Let me tell you about all the helpful people I've worked with to this point:
My initial contact, and primary source of information through this entire process is Gary, the commercial business broker. He is actually the sellers' agent, but, as he said at our first meeting, he will end up working a lot more for me by the time we're all done.
I first met with Gary on April 15. I asked Jan Irene to come along to the meeting, as I highly value her business expertise and her perceptive impressions of people. I came prepared with a long, long list of questions. I had brainstormed everything I could possibly think of to ask about the store. Gary still jokes about my huge list of questions a month later. He was very well-prepared to answer just about everything I asked, and I immediately felt I could trust him. Also, he didn't make me feel dumb for asking really basic questions, he just took the time to answer everything. So far so good!
Later that week, I met with the current owners of the store, Carl and Jo, together with Gary. They answered all my new questions about the day-to-day operations of the store. I felt very comfortable with them, which is important as we'll be working closely over the next couple months. Carl demonstrated the excellent, perfectly customized point-of-sale and inventory management system, which was especially impressive. I felt I could see myself stepping into these peoples' shoes.
Throughout the next couple weeks, I continued meeting with Gary every few days. But there was an issue. I knew I would love the job. I knew I wanted to own my own business. There was one huge thing I didn't know: how much should I offer?
Business valuation is a tricky thing. What I've learned is, there are a lot of different methods, and each will give you a different value. But for someone like me who has no experience with this type of transaction, it ends up just feeling like one big guessing game. So I decided it was time to call in the big guns and hire a CPA and small business consultant named Kyle. After just one hour talking with him about my valuation questions, he had me thinking of the purchase in an entirely different way: as an investment. Well, duh. Talking with Kyle was absolutely critical to me feeling comfortable with taking the next step...an offer.
To sum up, here's what I've learned so far:
- Take your time and think it through...think of every aspect, every possibility, every negative
- Bring a level-headed, trusted person with you to all meetings, a second ear to listen for you
- Ask every question, don't be afraid to look dumb
- Find experts and utilize their knowledge – it will be well worth any money you'll spend
Next up: fundraising!!
Love to you all. Amy