I am planning on buying a 12 year old store in my neighbourhood. The seller either wants to sell it at 72000 and I get a sub lease in which I pay him $3200 for the next 5 years of the lease or pay the seller 95000 and he gives me a new lease ( landlord approved) for 5 years and rent $1600 ( including RE tax). Now if I pay him 95K in advance I do get the benefit of a low rent for the next 5 years but I will only have about 40k left to run the store. I might have to do a little renovation too. I dont know what to do, will I have sufficient cash left to run the business till it catches up. the current owner is not willing to show me his tax papers saying they are too personal. I have no way of knowing how much he makes. I like the location being close to my home and right outside the subway. I think if I make some improvements I might be able to run the store a little better. Please advice. by the way I have no experience running a c store.
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Convenience Store Decisions Community » Ask the Experts
sub lease or a new lease
(4 posts)-
Posted 7 months ago #
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I could never recommend that you purchase a store where the seller does not provide you financials. They do not have to give their personal tax return, but at a very min. they should provide a store P&L.
When I began in this industry 30 years ago we used a simple paper based P&L system. Today most independent retailers use something like QuickBooks which can create a store level P&L. Armed with information you can then make a better decision regarding the two alternatives should you elect to move forward.
Posted 7 months ago # -
Run very far away if the owner does not provide financials. He could have the financials prepared for viewing without providing his confidential information.
It would be very tough to begin the operation of a C Store with only 40K to work with. You could spend that alone on licensing, etc. Try to remember in business that if they are not willing to share, more than likely, they have something to hide.
Also, have you considered using a broker to handle the sale. Remember, there are lots of things to consider. Liquor license transfer/purchase, licensing for food service, etc. I am not familiar with the procedures in your state, but a broker or business consultant could help in this situation.
Good Luck in your endeavor.
Katy
Good luck, and I am sure there are more opportunities out there.Posted 4 months ago # -
I agree with the other two responders,,run!! I have swold a c store before and was willing, with a bonifide buyer, to disclose EVERYTHING. Why not? They are going to pay you money for the business, you should know everything about it---everything!
Profit & loss is easily made, beware of them...if they have a program like Quickbooks, have them show you everything, and then back up their information that is on the P & L. Also, P & L shows somethings, but not everything, a P & L, along with a balance sheet gives you a more better picture.
If you are uncertain---hire somebody to look into it further for you. And, if the seller agrees to show you info, I am always the one to get your monthly payments down, so I would opt for the lower monthly payments myself...providing the store can pay for it.
MarkPosted 3 months ago #
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