-
Advice needed
JC, I hope this is ok here, if not please do as you must...
I have recently found out about a Fly fishing business that is for sale. It is advertised as a historic business with mail order, retail/wholesale, and internet clientele. The business can be moved. I have never owned a business, and the thought is scary and yet exciting to me. I came here thinking I could get a good selection of opinions from people of all walks of life, and hopefully some in the know. Can anybody give me any thoughts on questions I should ask, points to ponder, or ideas that I may not have thought of.
I appreciate any and all responses.
Thanks and tight lines
Jeff
-
ask for all tax records and financial accounts going to the beginning of the business. Inquire about sales trends in the area. Is the customer base flexing or is it stable? Be prepared to work long days. Nice to have a dream, eh?
-
Consult with a good small business accountant before purchasing, they will see things you dont.
Also as gardenfish said, be prepared to put in long hours, make that 24/7 365. Being self employed means taking a holiday is a significant logistical exercise.
[This message has been edited by Jo (edited 08 February 2005).]
-
Keep in mind that fishing for fun and running a fishing related business are different. I love to fish, but running a business that is retail is not something that would interest me.
Ask some guides how many days they spend on the water. Then ask how many days they spend fishing. It might give you a sense of what you could be looking at.
Retail sales is not for everyone. Can you say yes sir, I'd love to... when the "sir" is an idiot and you'd like nothing better than kicking his arse out the door.
Are you okay with closing at 5:00 which could mean 6 or 7?
We need people to sell the stuff we use, but I hope that you are clear that you want to be one of those people. I'd rather be your customer http://www.flyanglersonline.com/bb/smile.gif
jed
-
A lawyer friend of mine once said the only absolutely certain firing offense an emloyee of his could commit was making a record of any cash payments. I don't know if its worth remembering if you go into business, so I offer it in the FWIW category.
-
This wouldn't happen to be in Pennsylvania by chance?
-
JC,
Selling dueto health reasons.
PG Flyfisher,
It is. Do you have any information on it?
Thanks all,s o far.
Jeff
-
Maybe this it....."The owner's health has not allowed them to dedicate the necessary time to the business to keep it successful. Gross sales of $308,411. Total Asset Value of $221,500. Located in Western Montana".
[url=http://www.mergerplace.com/mp/visitor/buyers/view/15479:8dd48]http://www.mergerplace.com/mp/visitor/buyers/view/15479[/url:8dd48]
Have a nice day,
------------------
John G.
Albuquerque, NM
-
These are things all self employed learn some the easy way many the hard way.
You have no friends in business only customers suppliers and potentials and none of them will do you a favour.
Be hardnosed, a soft touch will send you broke in a heartbeat.
Pour as much financial and work capital back into it as you possibly can without going into debt for the first few years, this will pay dividends in the long term.
GET A MENTOR
Seems negative but most small businesses go belly up when people go into the with dreams and no business acumen.
-
I'm not a business man, I'm a teacher, so take my advice as you will...
I, too, have thought of starting a fishing related business but I've often wondered if I'd still enjoy fishing (as I do now) if my income depended on it.
Do all the necessary and prudent financial research, and consult openly and honestly with your spouse (if, in fact, you're involved in a relationship). A new business can add stress to personal relationships, so make sure that yours are strong enough to see you through your new venture.
In the end, you'll make the right decision. People usually do...sometimes it just takes a while to realize it.
Best of luck,
Andrew
-
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.
-
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
-
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
-
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]
------------------
LadyFisher, Publisher of
FAOL
-
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
-
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
-
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
-
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
-
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.
-
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
-
Most of the advice posted thus far has been good and worth taking into consideration.
As you read this, please keep in mind that I haven't live in PA for the past 4 years and haven't lived in the area of the shop for the past 15 years. (But I do try to get back as often as I can)
I assume you a) live in the area and b) have been to the shop. That area is not a flyfishing mecca like the State College and Harrisburg areas. Never the less it is a well established business. It has been there for as long as I can remember.
If you recall, after "the movie" came out, there boom in fly shops. Everyone with a vest and fly rod hung out a shingle. Most have since fallen by the way side. The fact that this shop has stood the test of time for the past 60 years say alot. Their reputation alone would be worth seriously considering buying the business.
The last time I was in the shop, I had a discussion with one of the guys who worked there about what he though it would take to purchase and run the business. Whoever buys the place needs to run it full time. The people who work there do so because the love what they are doing, not because the pay is great. One of the first rules in owning your own business is that the employees get paid first. There maybe times when you may have to go without a pay check.
Assuming that you've been to the shop you know that the building needs some work. If it were to stay in its current location, capital improvements will be necessary.
People don't necessarily come to that area because of the great flyfishing. Granted there is a draw, but it is not a great as other portions of the state (Commonwealth). So I assume the major customer base is from locals (walk-ins) and internet/catalog sales for rod building supplies. Thus far they have managed to hold their own.
Having live in the area, I can never really recall them doing any local advertising. Sure, you see their name at spring fishing shows and key times of the year. But I can't really recall them doing any major advertiseing outside of the normal fly fishing outlets. I know numerous people who have driven past the shop all their lives and never know it was a fly shop. That is one thing I would try to change. They need to increase their local exposure. I would also try to hook up with Ken Hunter and get a little exposure on that TV show he does on the weekends for that W-B station.
I don't know how much guiding is done out of that shop. The shop where I currently live, does a great guiding business. If it were mine to do, I would consider adding a decent guide staff. I would also consider organizing trips to other fishing destinations.
I know they offer classes and demonistrations. I would seek to increase those offering if possible. I would also try to bring in such noteables as Lefty, Bob Clouse and maybe even Joe Humpheries on occation to drum up interest in business. Half the battle is getting people in the door.
Another thought is to consider selling other items that fit in with fly fishing, like canoes and kayaks, camping and backpacking equipment. That area of the Commonwealth has some great hiking and camping places. However, in doing so you run the risk of spreading yourself too thin. At the very least, I would start out small and go from there.
I wouldn't count on the business being my single source of income, nor would I invest every last cent into the business. You may have to approach it from the stand point of a full time hobby. But let me say something about hobbies. Think of all the wanna-be Norm Abrams in the world with their little woodshops in the basement. Do you think that if they were full time carpenters that they would spend their evenings and nights messing around in their woodshop. I doubt it. So if you are thinking about buying the shope because it is a way to use your hobby to make money, then don't do it. That's a bad idea.
That shop, in its present location, would be great for someone who retired early, had a strong retirement income and could afford to purchase the business. As a matter of fact, I think that is what the current owner did. I wouldn't expect to make a lot of money on the business. But it would give one a reason to get up in the morning (as if being retired and being able to fly fish all the time isn't enough of an incentive).
Jeff I don't know what your situation is. But those are some of my thoughts, for what they are worth. The business has been on the block for over a year so it is not like it is going to be sold tomorrow. You have time to research it a little and do you homework. Without doubt, you would need to develop a business plan with long and short range goals.
Good luck with your decision. We can talk more if you want.
Tight lines.
-
I also live in PA. Maybe this could be an attractive business to buy...
In looking at the business' reported financials, I see that for the 39 weeks ended 10/2/04, their revenues rose 16% to $976.9 million while their net income rose 62% to $26.5 million. The improved net income also reflects improved margins and a greater absorption of overhead costs.
But I didn't know Cabelas was for sale?
John
-
PG,
Thanks! All good information that is actually more, much more than I had expected. No, I actually have never been to the shop, and in all actuallity only assumed its general whereabouts by looking at the phone number. You have definately given me more food for thought. I appreciate your input.
Jeff