[no2pencil]

Anyone here at Dream In Code ever bought a business?

Has anyone ever sold their business?

I've got an opportunity to buy a competing business & I have a ton of questions.

Most importantly is the name. The name of the business I'm buying has been in our local town/city for the last 20 years. I'm potentially buying the integrity, & well known customer service of a local computer repair shop that has services our are for the last 20 years. With that being said however, I'm not willing to give up what I've spent the last 7 years work my tail off to establish! I'm not willing to turn my back on my creation, just because something else has come along.

The other thing that I really don't like is the location. It's quite hidden. There is a ground level store front I've had my eye on, & would love to move my new... well creation/merger there. I'm thinking about leaving it as is for a few months. Three, maybe six at the most. Letting everyone know it's moving. Then when it moves, everyone should have familiarized themself with the new location. Sure I'll lose some folks, but you've got to crack a few eggs to make an omelet.

In this day & age where a customer informs themself via the web, & telephone conversations, how much of that will carry over? I would own everything, so it can all be converted. With todays web 2.0 business world, how much interaction is still left at the brick-&-motor level?

I'm interested to read anything you have to offer, so please... let me know what I can't foresee, & what I should be asking myself, & consultants!

Thank you so much!

[nooblet]

I've done both. However, they were both online businesses. While I have experience in the Brick and Mortar side of things, I've never purchased or sold a Brick and Mortar so my advice would be limited to only areas that would overlap (which in this case is probably very limited considering the business structures are also very different). However, whatever questions you may have specifically, feel free to PM me. Keep in mind I know nothing of your area, the numbers or plans for the business before and after the acquisition should you plan on going through with it, and so with what limited info you've provided, I can't really answer much (but I'll try). Also to answer what you can't foresee, it would be good to know what you've already taken into consideration. And why are they selling...

[Shane Hudson]

I wish you the best of luck with this, and would like to comment on your question.

Quote

With todays web 2.0 business world, how much interaction is still left at the brick-&-motor level?

A lot. Of course, social networks etc. help with interaction but many businesses (and especially banks quite surprisingly) that tried to automate or digitalise a lot more of their work are now tending to go back to having human interaction.

Human interaction is ESSENTIAL to a business and especially the customer service. For example, there is a small computer business in town which are great. On many occasions I have been in there for half an hour just taking about Pros/Cons etc. I could easily have found a forum or something online with the information needed, but I (and so do many others) prefer talking face to face.

What kind of business are you thinking about buying? That might be the deciding factor on whether it would benefit from moving etc.

This post has been edited by Shane Hudson: 13 February 2011 - 12:07 PM

[rgfirefly24]

Have you thought about making it a child company to your parent company? When i Worked for an ambulance company we bought out a rival company but kept the name and operating location. That was done because so many people knew the name, and trusted it. If you absorb the name then you will have to earn the trust of the customers all over again in most cases.

[macosxnerd101]

The big deal with the integrity of the business you are buying is relationships, and those start with the Employees. At my dad's store, most of his employees have been there for 20+ years (and most are on social security). There have been articles on many of his employees, and they bring a lot of business to the store. So if you go through with the purchase, it's important to keep those Employees happy and morale high. Trust me, if Employee morale suffers, so will business.

In terms of name, I'd personally lean towards the one with more publicity and integrity in the town. I completely understand how you feel about your own creation, but in terms of drumming up business, the one with more publicity will probably be better. Going off on a bit of a related tangent, the family business was opened in 1929 in the city where I live as an extension of the parent in Baltimore. There were a few other branches on the east coast, including one in DC. My great-grandfather and his partners bought their branch from the parent company during the Great Depression, and kept the name. Even today, we get occasional business and brand recognition from people in DC or Baltimore for those stores (same name, but are now independents).

Hope this helps some.

[Choscura]

Keep the old company's name, move it to a new location, put up a sign that says ("In association with {0}!", your company's name), and leave flyers at the other business's previous location that have a map from the previous location to the new location and have a small voucher (5% off with the presentation of this flyer!) so that there is an additional incentive to go to your new location instead of just going to the next closest place.

[no2pencil]

Choscura, the map with a coupon is a brilliant idea! I'm not sure if keeping the existing name is even an option. I was viewing some information on the web & it seems that their incorporation status was revoked by the state in 2009.

These are all great ideas. Thank you everyone, for your input, collective thoughts, & contributions!

[Craig328]

I've sold an online business before but not a brick/mortar biz. I had wanted to drop on and suggest keeping the name and location for awhile and see if there's things you might do to improve the business. You're considering buying it for a reason...do you really wanna tinker with it right away if it's worth buying?

You mentioned the name is important. That's a good start. You also mentioned the corporation status was revoked a couple of years ago. You can contact the state and inquire as to why it was revoked. A lot of times it's due to a lapsed business license which you should be able to easily rectify. That said, they may have been doing business as a DBA in which case if you have a corporation, you can probably shift the DBA filing with the state to your own corp and your customers probably wouldn't know the difference. However, if they corp status was revoked for any other reason you need to be very careful there. You almost want to do something like a title search for the business so you don't discover down the road that you bought a nice viable business...along with a truckload of undisclosed debt. In fact, the background search is normal due diligence anyway but I thought I'd mention it to make sure you're using a lawyer and they're advising you properly.

Also, there's the issue of non-compete agreements between the seller and you. He sells you his business, moves down the block, opens up another identical business and then proceeds to call all his old customers and before you know it, you've bought an empty sack.

[no2pencil]

Craig328, on 14 February 2011 - 05:03 PM, said:

You're considering buying it for a reason...do you really wanna tinker with it right away if it's worth buying?

It's directly located to a business that I'm already tight with, but would quickly become direct competition. There is also no way I could be even contend with said business that I would be next to. I'm really going for the downtown area, & this is about 2 miles away from there.

Craig328, on 14 February 2011 - 05:03 PM, said:

You also mentioned the corporation status was revoked a couple of years ago.

Turns out it's not the same business. Weird. Same name, next town over, different owner on the registration.

Craig328, on 14 February 2011 - 05:03 PM, said:

Also, there's the issue of non-compete agreements between the seller and you.

This is most certainly a priority. Thank you for the tips!

rgfirefly24, on 14 February 2011 - 12:17 AM, said:

Have you thought about making it a child company to your parent company?

I don't know how one would do this. When I questioned my bank contact about having two federal tax ID's, he said it really would make more sense to have one business consume the other, & only use one federal tax ID.

[Craig328]

no2pencil, on 17 February 2011 - 03:28 AM, said:

rgfirefly24, on 14 February 2011 - 12:17 AM, said:

Have you thought about making it a child company to your parent company?

I don't know how one would do this. When I questioned my bank contact about having two federal tax ID's, he said it really would make more sense to have one business consume the other, & only use one federal tax ID.

I'd recommend you speak to an accountant about that rather than the folks at the bank. The primary reason you might consider a parent/child company set up would be taxation considerations...and your accountant will have likely forgotten more about that topic than most bankers will ever know.

[rgfirefly24]

I'm not an accountant, nor a banker, nor really have any good knowledge about the parent/child relationship in business except for what I learned at the ambulance company. Basically what I was told was that if you have a child company that is currently in a loss then there is some kind of offset or something to the parent for sustaining a loss from a child.

[no2pencil]

rgfirefly24, on 17 February 2011 - 09:57 AM, said:

Basically what I was told was that if you have a child company that is currently in a loss then there is some kind of offset or something to the parent for sustaining a loss from a child.

The main reason for this would be if I billed one company from the other. It allows both companies to make an income, but allows one to have substantial write offs. Or it allows one to operate, as you suggested, in the negative, but I can still make a profit plus get tax writeoffs at the end of the year. At least that's my understanding of this setup.

I'm not really looking to go that route at all.

[Valek]

Most of what I was going to say has already been addressed in this thread, but from my experience, the biggest thing you should focus on, no matter the other details, is service. Not just service for your customers, but service to your employees as well. If you make your employees happy, they will enjoy their job more and put more into it and keeping the company going and thriving, because they want to keep that good job. In turn, this will make your customers happier, so they're more likely to come back to you for your products and services again. Look at what competing businesses in your area offer in terms of service and one-up them so that customers have that extra incentive to come see you first

This post has been edited by Valek: 18 February 2011 - 03:56 PM

[no2pencil]

Thanks for all your input on this.

After much deliberation, I've opted to not buy the business, & actually went in with a business partner to assist with renting the store front. They need the storage in the back, & will offer half the rent, & I get the store front. Win.

Pics will come soon, check our Facebook page, & I'll update here too.

[ForcedSterilizationsForAll]

Can you install RAM over the inner webs?