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Old 04-28-2013, 10:15 AM
 
32 posts, read 47,449 times
Reputation: 73

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My son and I met with a man and his broker yesterday about buying a route distributorship. The owner seemed like a nice enough guy. Did not seem like a sly character. However his books were all handwritten in a composition notebook. He said he is not computer savvy (neither am I). And lots of his accounts were cash. So how can we analyze his income. The only other thing I can think of is if my son goes on the route with him a couple of days and see the actual accounts he does have and the amounts that they order. Any other ideas or things to look out for?
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Old 04-28-2013, 10:26 AM
 
1,092 posts, read 3,071,888 times
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Tax returns.
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Old 04-28-2013, 12:14 PM
 
Location: North Idaho
25,256 posts, read 33,183,633 times
Reputation: 52081
Tax returns might work or they might not. Unless you are ordering directly from the IRS, anyone can easily dummy up some fake tax returns.

With that bookkeeping system, the seller is probably under-reporting to the IRS. Maybe he isn't filing at all.

You can ask to see receipts for goods purchased and rental leases for machine locations.

Ride along, but for several weeks, because it is easy to miss a few pick-ups and machine services in order to build up a large amount of cash in machines.

Seller is charming. So what? All con men are charming or they could not work their cons. Verify everything, including teh length of time left on leases of locations.
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Old 04-29-2013, 07:41 PM
 
1,139 posts, read 3,048,134 times
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Quote:
Originally Posted by need4answer View Post
My son and I met with a man and his broker yesterday about buying a route distributorship.
Ask the broker for cost of similar route distributorship and you can then compare!
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Old 05-03-2013, 06:55 AM
 
1,610 posts, read 4,217,796 times
Reputation: 714
Ride on the route for more than a few days,go out side of the territory and ask other distributor/owners questions with out mentioning the route you are looking at.Don't buy a route where you have to join a union,a union devalued my first route.just a few tips from a former route owner for 26 years its hard work,no sick days or vacations and you get out what you put in to it.
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Old 05-03-2013, 08:20 AM
 
6 posts, read 202,375 times
Reputation: 19
You wanna see P & L...

I'd stay away from brokers.. the price is up cause the owner has to pay commission to broker.

What company?
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Old 05-03-2013, 02:07 PM
 
Location: The North
5,484 posts, read 9,700,491 times
Reputation: 4727
The people who get a good value out of this are willing to hustle and buy it from someone who doesn't hustle anymore. If you buy a great or just good business you are almost always overpaying. If you buy something which has grown stagnant and the current owner hasn't grown his relationships lately you can build some additional value.
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Old 08-05-2013, 12:31 PM
 
6 posts, read 202,375 times
Reputation: 19
Exactly.. if your buying a route at its peek and have no clue what you are doing.. man you are in trouble.. you might not do the numbers the guy selling you is doing.. but a owner that just wants to get out of there like willy702, there is room to build.

Quick sign is to look for displays.. does the guy have displays in his store? is he or she aggressive when something is on sale? if not.. those are the guys that just want out.
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Old 12-11-2013, 11:56 AM
 
1,610 posts, read 4,217,796 times
Reputation: 714
Stay away from any route that requires you join a union it's your money buying it so don't invite a. Partner to share your profits
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