Ok, i'm turning to you guys for some help...

[Hockeyplayer]

Well as some of you know i've either managed or worked at furniture stores for the past several years. For two years in Chico and Ukiah and this past year at an Ashley Homestore down in SD.

The guys I worked for and whom I consider pretty close friends offered me their Chico store pretty far below market Value. The store grosses between 600 and 800K a year (50-80K monthly and I need about 40K before I start turning a profit) They offered me everything including inventory, FF & E including the lease for 80K. The lease has 2 years left at ~$1 a square foot which comes out to around 6K monthly; it's triple net so i'm responsible for all repairs on the building. They also have options that will extend for the next 10 years if I choose to exercise them.

The benefits include buying an already established business that has been around since '94. I would already be set up with prominent vendors (mainly Ashley) and I wouldn't have to go through finding a building and setting everything up. I would establish my credit and history as a dealer and that would make it much easier to expand down the road. From what I understand; the hardest part about starting a business is getting it started with no business history or credit. My parents are more than willing to loan me the money and have never been afraid to invest so they are all for it.

The things that are keeping me from pulling the trigger are: I'm only a Junior in college and this would require me to take a break or quit completely. I'm set to start school this Thursday down in San Diego which means I need to decide NOW because this deal won't be around forever. I would be borrowing close to 100K from my parents and that scares the crap out of me. The store has been slowing down a little bit lately with the additions of new bigger corporate stores coming to town. It's still turning a profit but not nearly the kind it was 2 years ago.

With this business I have the potential to make 30K a month but there is also the possibility that I could lose a decent chunk of change.

If anyone can give me reasons in favor of or against it would be appreciated because I am completely on the fence.

[jt09]

If you can swing it and it's a solid business decision, bolt. I stayed around to finish school and it has cost me greatly. You go to school to get a good job - this is a CAREER! Take the opportunity if it's right.

Set aside some cash for school/retirement as well, but that sounds like a great opportunity.

[chavez]

Hockeyplayer, I can't help much with the decision, but if you get the store, I will come up there and shop at it.

[Hockeyplayer]

jt09, That's kinda what I wanted to hear. I've been looking at figures of what graduates make with business degrees and it's not really that impressive. I'm pretty sure its a solid decision the only thing that scares me are the big stores that are coming to town. Then again you can't expect to be successful if you don't take any risks...

chavez, Thanks buddy.

[jt09]

Hockeyplayer, you would OWN a business! To me, that's GOLD. Yes, it has risks, but damn dude....

Oh yeah, I want nice end table for this advice. Unless you fail miserably. Then I want you to forget I ever said anything.

[Hockeyplayer]

jt09, I think you're right. I need to stop being a pu$$y. It's been very profitable for 10+ years. Why can't that continue?

[Dragonlady8]

You can always go back and finish your degree or take a semester/year off or take one class for the time being until you get a better feel of the situation.

[ontrider]

Hockeyplayer, if you know the business well enough, go for it. You won't be making that kind of money in a cube after school. Smaller shops can still do very well, just focus on customer service and make it a personal experience. There's nothing worse than going into a store and feeling like nobody is helping you or cares. Also, starting a business is one of the hardest parts, getting it profitable. You already have an ESTABLISHED business, so all you need to do is make it even better and it sounds like you have the know-how to do it. School is overrated, if you're successful in what you do on your own you don't need a little piece of paper to vouch for your credibility. Good luck!

[Hockeyplayer]

Thanks guys. I'll let you know what I decide but I'm pretty close to logging on to my schools website and dropping all my classes for next semester.

[Buergday]

Sounds like a sweet opportunity to me. If you're confident that you can run things then you should go for it.

However - Did they tell you why they're selling it? Is there something that they're not telling you? It seems kinda strange to sell a historically profitable business.

Another thing to remember is that Chico State has a great Business program. You can always go back to school in a year or two, once things are up and running with the furniture store.

Good luck Matt!

BTW - Sorry I missed you at Boardstock. I didn't get to go Sunday either. I suck.

and, just for old time's sake....

[Hockeyplayer]

They want to sell it because they have a new nicer store in Ukiah (not the one I was working at) that's doing a quarter million a month and want to open another in Yreka that's about the same caliber. Basically they're just moving on. BTW: Thanks for the picture and for flaking on me at boardstock. You do suck.

[204Waker]

Jesus man... now is the time. You are only a junior. You dont have a wife/kids/house/mortgage etc...

Now is your time. Sure you have a little to lose, but in the greater picture, you have nothing to lose! It's not like if this fails you won't be able to feed your kids or provide for your family.

I say go for it. If you have the business sense, then capitalize on this opportunity. Big deal.. new chain stores are coming. That just means you need to differentiate yourself. Don't sell furniture, because those other 2 chain stores are going to do that. Sell service, that is what people will come to your store for, and then sell furniture.

[htownbdr]

Sounds like a no brainer...That is, as long as there is not something you are missing. Them gieting rid of that store for 80K is basically giving it away. Which makes me think something is up. Usually if something is too good to be true, it is.

The numbers you gave, even at the worst case, make economic sense. For example, you say that it at least grosses 50K a month and that your overhead (I am assuming includes inventory too) is about 40K. That means basically it has an EBITDA of 10K a month, or 120K a year. So, even at worst case scenario, a business should be worth one year profits plus the inventory. So, if you are getting it for less than 1 year profit and getting the inventory in that deal, it would be a no brainer...As long as there isn't something you are missing. Like, the market is about to tank for furniture in your area for some reason and that is why these people are getting rid of it.

Just some thoughts.

[Trainwreck]

I say go for it. Don't let the "big guys" scare you off. You know as well as any of us that they are going to be the ones with the hard sell outlook and no one wants that.

There is a guy who lives in a 4 or 5 million dollar house right behind the Marine Max that I work at. He owns a little place called Hilton Furniture and his only real competition is Gallery Furniture and the famous Matress Mac.

Go for it brother. College won't take you as far as you could take yourself with an opportunity like this.

[Wakebrad]

[Tracktor]

Get the "books" for the last few years and have an CPA go over them with a fine tooth comb. Sure, they can still hide stuff but if there are anomolies they should show up. It's never a bad idea to have an uninterested third-party take a look at a deal like this. If the accountant gives a thumbs up or at least a risk analysis you are comfortable with then go for it..............