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A friend of mine just turned 58 back in January. His in-laws gave him a small restaurant and convenience store, which they founded, sometime back in the 1990s.
He's griped for the last year or two about how he hates running the store - the constant trips to Sam's to stock up, running the register, people calling out and him having to cook, etc. Honestly, he worked about half the day between the register and the kitchen. I'm not sure what he did before this, but I don't think he had too much of a career.
Anyway, he found a couple of people willing to buy the store and the apartment he had rented above the store for $300,000 back in the winter. He got $150,000 now, and $150,000 paid over five years or so. I have no idea what his investments are otherwise, but he is not a sophisticated person in that regard. The wife works for the county court system making about $40,000. His current house is not paid for. He used the $150,000 he got from the sale of the store as a down payment on a nearly 4,000 sq. ft on a golf course that has had solvency questions in a declining part of town. He's buddy buddy with the owner of the course who promised to give him a job. The job didn't materialize. He doesn't seem to have cut his lifestyle one bit - there have been two trips to Hilton Head and another to Maui since he "retired."
I saw him earlier this week. He must have had a falling out with the course owner or didn't like the condo. In any event, the condo is now up for sale and he's now dragging everything back to the original house and planning to stay there. He's going to throw away the real estate commissions on that condo going both ways. I can't see there being a market for many $350,000 huge condos in Kingsport downwind from a paper production facility. It could take forever to get rid of.
By selling the business, he's out his only source of income. His wife will have to keep working to bridge them to Medicare age. There were all sorts of fringe benefits too - he personal car was registered as a business vehicle, he'd get his alcohol directly from the distributor, would get groceries from the store, etc.
He's sold the business, but it seemed like he sold for too little and planned for his post-retirement life poorly.
Without a lot of detail. I sold a small retail business. $X upfront, $Y per month for 2 years. They stiffed me for the last 3 months payments. There lawyer sent a letter to me. My lawyer said we could fight it but the costs to do so might not be worth it. I ate the loss.
My bottom line advice is beware of extended payments. I believe there is a way to seize the business for any unpaid payment.
I'm not lambasting you , but I'm just curious, unless he wants something-like money- from you, why do you care how he handles things?.....
My impression from reading many of SeriousConversation's posts is that he has a strong feeling of empathy for those in a rough spot. He may even feel a twinge of guilt by being in a better place. His friend/acquaintance made what appears to be a pair of very bad choices and there is nothing SC can do about it. I have close relatives making many similarly bad choices, sometimes for the right reasons but bad choices nonetheless.
I empathize with their problems. I cannot afford to save them. Sometimes I post about their situation to take a burden off my mind, not to embarrass them. Perhaps SC posted for this same reason.
And to approach the topics that Stealth Rabbit mentioned, it appears to me that very few small business owners know how to place a value on their business. Much worse is that they appear to not ask for professional help with the valuation.
The business owners find themselves living a lower quality of life than they anticipated with the sale proceeds, too quickly spend their windfall, and the business will often fail under the second owner. Maybe the new owners are enthralled by the quaintness of a business they visit once or twice, decide to buy the business because they fell in love with it, but have no real experience with such operations.
So what happened to Serious Conversation's friend/acquaintance is not atypical from my observations.
And to approach the topics that Stealth Rabbit mentioned, it appears to me that very few small business owners know how to place a value on their business. Much worse is that they appear to not ask for professional help with the valuation.
The business owners find themselves living a lower quality of life than they anticipated with the sale proceeds, too quickly spend their windfall, and the business will often fail under the second owner. Maybe the new owners are enthralled by the quaintness of a business they visit once or twice, decide to buy the business because they fell in love with it, but have no real experience with such operations.
So what happened to Serious Conversation's friend/acquaintance is not atypical from my observations.
You said it. All my life I have worked for sizable companies - utilities and such. I have no experience running a business.
A little sub shop that I have frequented since the early 90's recently went out of business. While some aspects of running such a shop appeal to me, there are all sorts of business administration issues that I have no experience or training for, that would have to be handled somehow. I am under no delusions that I could handle the "business end" of the business without some sort of training.
Not to mention, that the previous owner, who did have experience, couldn't make a go of it, so what would I have to do differently to make a go? And would the changes be realistic?
Not to mention, that the previous owner, who did have experience, couldn't make a go of it, so what would I have to do differently to make a go? And would the changes be realistic?
I've been self employed all my life. Recently my 57 yo live in SO talked about how we need a high end Coffee shop near us. She was thinking giving up a good Corporate job with insurance and Benefits to venture into the Coffee shop world was a good idea.
Hate to be a party pooper but No at 57 with a kid in college and not that much savings it is not the time to venture into the self employed world.
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