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I read somewhere that most small business failures occur within the first two years of operation. I know that the biggest problem is often cash flow. Allways have a cash flow budget based on the most realistic estimates of income and expenditures you can make. Have a sufficient line of credit set up to meet expected low income/high expense periods. Even if you're projecting a profit overall you can be killed by cash shortages that ruin your credit with suppliers. If any of this is at all confusing talk to a good accountant about setting up a business plan. Find someone you can trust to tell you so if they really don't think you can make it. Good luck if you do go for it.
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You should consider doing a business plan. Business plans should not only tell prospective investors about your business, more importantly they will often show you if your business is a good idea. You can find some good books on business plans at the library. You have to be honest with yourself when you do it! Seriously consider pros and cons and just how you will make it work. Consider the market, your competition, finances, cash flow, etc. It's a lot to think about but I think if you don't go over this stuff before hand you will wish you did later.
Just because the flyfishing business sounds like fun it isn't necessarily a sound business investment. Be true and honest to youself, do the research, so that you know what the risks and the potential rewards are before you take the leap.
Of course, if you have a ton of cash lying around and don't care about the $$ (i.e. recently won super lotto), then what the heck go for it.
Good luck,
-John
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Quick math:
$300k gross sales, at a 25% margin (which is probably high) = 75k profit.
Rent and utilities at 4k per month= $48k. Total left = $27k. That includes no help, no advertising etc. Does not sound like a "Cash Cow" to me. That ebing said, figures can lie and liars can figure. But make sure you do the math before you do the check signing. A business plan is a necessity as well. Good luck
jed
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The key is "Due Diligence"
If you are serious, you need to see the books, but then,
1.check with the supplies, how much has the shop purchased over the past year? two years? What is the rate of turnover...? (How long does it take to sell an order before they reorder.)
2.What is their credit rating with their suppliers? (each of them)
3. How many other shops are there in the region?
4. How many of the "name" brands to they carry?
4. What is the spread of the brands? Top to bottom price ranges?
5. How old is the merchandise in stock?
6. The ad mentions they are an "outfitter", in Montana an outfitter license requires an exam and a fee, can you qualify?
7. Is the building included?
8. If not what would rental space cost?
9. What is the shop worth without it?
10. Could you get a better rate of return on your money in a different business?
Have you read Al Campbells article here: [url=http://www.flyanglersonline.com/alcampbell/ac111201.html:af4cc]http://www.flyanglersonline.com/alcampbell/ac111201.html[/url:af4cc]
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LadyFisher, Publisher of
FAOL
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Looked at the listing that you did the url connection to. Lot of unknowns and non disclosures, better to get all the information as mentioned above, and put it to an accountant and a lawyer for their take on the situation.
Being self employed means that your taxed at the following rate.
$15.80 for every $100 for Federal Income Tax.
$14.30 for every $100 for Medicare and Social Security.
Then there is the State Income Tax which for me (Minnesota) is $7.05 for every $100.
You will need a Business License, and a State Sales Tax License. Also there is the Business Tax, Property Tax, and other costs with having a retail property (Insurance on the building and property, and liability for injuries). If you employ anyone, you will have to pay part of the employees Social Security/Medicare Payments.
Figure that you will have a law firm on retainer, and a good business accountant you can trust and afford.
Wish you the best, but do go into this with eye wide open, and do not take anything verbal statements as fact.
You may end up owning a business, where the hours you put in, versus the time spent, makes your hourly wage less then the minimum scale.
And do not use your house for collateral on the loan. Never bet the house on any deal.
~~Parnelli
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Thanks to all who offered their thoughts. After some thought, I think I have decided to let this notion pass. I love the sport of fishing, and always dreamed that I would love to be involved morn till night. After reading some of the responses here and on a couple of other boards I frequent, I realize that the bite may be more than I can chew. Having no experience is one a big reason for this decision, as well as the fear of waking up one day and finding that muy passion for the sport wasn't burning as bright as it once did.
Thanks again and tight lines
Jeff
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fishn' fool,
Please, please, please do not let what you've read on this board discourage you from your dreams! If you really want to do something, then go for it. Just do the research first so you know the risks. And, if this isn't the best situation, then search until you find a good one. But never, ever let anyone talk you out of your dreams. Know that if you really want to be successful at something you will, despite what others may think, and even if you aren't successfull in your first try, you will eventually succeed. There is nothing that can stop you but yourself. And you'll be so much happier that you have dared to reach your goals.
Believe in yourself. There are no bites too big for you to chew! And best of luck to you.
-John
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ff,
Don't let this stop your dream. as KTOKJ said. This may not be the deal for you, but that does not mean there is not the deal for you somewhere. Just go in with your eyes open. You might also consider a partnership. Is the seller interested in doing something along those lines so you gain from his experience. Lots of options, just make sure you go in with your eyhes wide open. Good luck.
jed
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Does it sit on a hille along Rt. 15? (I want to avoid using names)
I know you've made you decision, but here is what I know.
Having grown up in the Wmspt area, they were the fly shop in the area for a long time. And for the most part still are. They have a loyal client base. There is a lot of good fishing in that area and that seems to be the goto shop. Everytime I'm back home I spend money there. The people that work in there are friendly and knowledgeable. Not to mention that the place has an undescribeable charm.
The shop has been on the market for over a year or more. Talking with the folks at the shop I got the impression that it is not something you could buy and let someone run for you. You would have to be there.
According to the Folks who publish that free Northeastern Flyshing magazine, the number of fly shops in PA have dropped by 30% over the past year to two years. Add to that the fact that Gander Mountian just opened down the road.
Since you made up you mind, I won't add my opnion. But I will say, that I hope whoever buys the shop continues the good work. It is a great resource. I would hate to see a place like that close.
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John and Jed,
Not to worry. The opinions and advice found here didn't change my mind, only helped to open my eyes to the very many parts that I didn't want to see or had too little knowledge to see. Thanks for the pep talk though, and I appreciate the motivation.
PG Flyfisher,
I would like to here you're opinion, as you would seem to be right so far.
Jeff