Adventures with Lyrical: Buying a Business (REPOST)

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Shonuff

Shonuff

Mr. Poopybutthole
5,538
791
We just met with the sellers for two hours, and it might work. I'll post my thoughts later. I do know that they've won a bunch of service awards, and have a good reputation. Also, they are considered to be the largest handyman company in the area.

The way this is set up, with three customer service awards, and designated people for selling, I could fold this into my other office, and have my wife oversee the secretaries and CSR reps.

Overview wise, I think that this might be one of the better companies I've looked at. Hell, they have a sterling reputation and sales keep growing every year. The seller is the same age (61) as the other seller who I bought my business from. He says he's ready to retire.
 
P

Picasso3

Silver Baronet of the Realm
11,333
5,322
Beware imperial overstretch but that does sound like a winner to me. You need to cultivate managers you can trust...if that's possible.
 
Shonuff

Shonuff

Mr. Poopybutthole
5,538
791
Picasso, if you are waiting on a response from me, it will be a long time, as you've been on ignore for the last two years.
 
Shonuff

Shonuff

Mr. Poopybutthole
5,538
791
Eomer_sl said:
My, someone's salty. It was a completely benign response:
Click to expand...
I was salty at him two years ago? I dunno, to be honest, I'm pretty sure there was something he posted about race I didn't like. I can't remember.

As my wife and I have had time to decompress, the one thing that sticks out is that they said they slow down enough in December and January to have to take off and go on vacation. Sound familiar?

When I bought this company, it was a rollercoaster ride. We made 20k profit the first month (October). I thought I was in heaven. And then I lost 40k until February, and then had a bunch of emergency work come in.
 
P

Picasso3

Silver Baronet of the Realm
11,333
5,322
I think i negged him with the comment "for being black" when there was some race discussion, he took it very seriously and pm'd me in a rage.
 
Shonuff

Shonuff

Mr. Poopybutthole
5,538
791
I met with the Broker again this AM. Unfortunately, I don't have long to mull over this decision. Any business in this area that nets 10K+ a month doesn't stay on the market long. The rich people gobble it up, and add it to their portfolio of businesses.

The seller made a comment that December and January are their slow months. I don't want to own two businesses hemoragging (sp?) cash at the same time. I requested the P&L's for December and January for the last three years.

If the numbers aren't too bad, we'll proceed.
 
Palum

Palum

what Suineg set it to
27,164
42,804
Good luck. There's pros and cons here - on one hand you have crossover business opportunities and on the other you are buying into the house maintenance/improvement market even further. I think all opportunities being equal I might look at other businesses not housing related, but that might be me thinking about the challenge as well as diversity in business opportunity vs. practical aspects.

Of course, the you might be able to double up on ads and such as well. Are you planning on combining branding or moving towards that goal long term to make one large service company or are you keeping your eggs in separate baskets?
 
Borzak

Borzak

Bronze Baron of the Realm
25,787
33,663
If you were in the south your guys would be begging for time off unpaid during hunting season. Hapened every year in our shop. You could give some guys 2 months off during hunting season (it last 5 months here) without pay and they would take it. It would coincide with your slow time, it didn't coincide with ours,
 
opiate82

opiate82

Bronze Squire
3,078
5
Lyrical_sl said:
I met with the Broker again this AM. Unfortunately, I don't have long to mull over this decision. Any business in this area that nets 10K+ a month doesn't stay on the market long. The rich people gobble it up, and add it to their portfolio of businesses.

The seller made a comment that December and January are their slow months. I don't want to own two businesses hemoragging (sp?) cash at the same time. I requested the P&L's for December and January for the last three years.

If the numbers aren't too bad, we'll proceed.
Click to expand...
You do realize that outside of MAYBE retail, pretty much every business is slow during those months? Hell, even retail struggles in January. People just flat out don't have much disposable income after X-Mas...
 
Shonuff

Shonuff

Mr. Poopybutthole
5,538
791
Palum_sl said:
Good luck. There's pros and cons here - on one hand you have crossover business opportunities and on the other you are buying into the house maintenance/improvement market even further. I think all opportunities being equal I might look at other businesses not housing related, but that might be me thinking about the challenge as well as diversity in business opportunity vs. practical aspects.

Of course, the you might be able to double up on ads and such as well. Are you planning on combining branding or moving towards that goal long term to make one large service company or are you keeping your eggs in separate baskets?
Click to expand...
I don't think 10% of my current business comes from Real Estate purchases. In the last two weeks, I haven't run one estimate tied to a house sale.

I'm not sure anyone gives a damn about cross branding, BUT I do have lots of customers with high income and low time that would be a perfect fit. I don't hit too many homes where the income is lower than 60k a year. I've marketed towards middle and upper middle class people for years. I might be able to target them through direct mail. There's nothing wrong with these people, other than they don't have time to take care of their homes. I work 7 to 7 (mainly because I want to), and when I get home, I don't have time or patience to do "Honey-do's." It's like a client of mine said, she adds so much value to her company, that she'd rather pay someone to clean her house, so she can work.
 
Shonuff

Shonuff

Mr. Poopybutthole
5,538
791
I'd like to point out that the business model looks good in theory, but I'm waiting on the financials. I've done due diligence on 38 companies, and only two of them passed my tests. I could get the financials and they could be FUBAR. Remember on FOH when I talked about the gym chain that was netting 600k a year, but after due diligence, found out that it was actually losing money? I knew it five minutes after looking at the bank statements. You can't claim millions in sales, and only have 20k go into your bank account every month. They did. And then the tax records should also corroborate. What I do is ask for records that all touch on the same thing. People only usually falsify one record, if you ask for it eight different ways, they'll slip up.
 
Shonuff

Shonuff

Mr. Poopybutthole
5,538
791
opiate82_sl said:
You do realize that outside of MAYBE retail, pretty much every business is slow during those months? Hell, even retail struggles in January. People just flat out don't have much disposable income after X-Mas...
Click to expand...
I always thought it was just the businesses I was in. A friend of mine is a Chevrolet dealer, and he has the best month of the year in January, because he spends a shitload in advertising a big sale. I know it's anecdotal, but how many businesses have you seen struggle in those months, because they stop advertising entirely?
 
C

Corndog

Lord Nagafen Raider
520
130
So far my best month of the year has been Januarys. With November and December being just under it. Tropical fish is a winter sport as I call it. I find people have lots of extra money to spend after Christmas. Basically it's non stop gift cards from my store, and visa gift cards etc being spent on fish. February is also very strong for me. Tax return time for anyone getting money back.
 
Borzak

Borzak

Bronze Baron of the Realm
25,787
33,663
Do people get an aquarium for christmas and then need stuff/fish to fill it in January? Just guessing. I can see lots of people buying "part" of a gift and then making you finish it out or giving a gift card to help.

In the past our busiest time of the year has been January thru March and includes some 60+ hour work weeks and again for about a month in August.
 
Palum

Palum

what Suineg set it to
27,164
42,804
Lyrical_sl said:
I don't think 10% of my current business comes from Real Estate purchases. In the last two weeks, I haven't run one estimate tied to a house sale.

I'm not sure anyone gives a damn about cross branding, BUT I do have lots of customers with high income and low time that would be a perfect fit. I don't hit too many homes where the income is lower than 60k a year. I've marketed towards middle and upper middle class people for years. I might be able to target them through direct mail. There's nothing wrong with these people, other than they don't have time to take care of their homes. I work 7 to 7 (mainly because I want to), and when I get home, I don't have time or patience to do "Honey-do's." It's like a client of mine said, she adds so much value to her company, that she'd rather pay someone to clean her house, so she can work.
Click to expand...
I don't mean house sales as a direct driver, but rather that the housing market and home 'improvements' can suffer tremendously during ebbs and flows of the market. I would be curious if you had financial records from either company back during the recession years to see any contraction.
 
Shonuff

Shonuff

Mr. Poopybutthole
5,538
791
Maybe I don't have time for another business right now. They sent over about 15 pieces of documentation last Friday, and I still haven't had time to go over them. The problem with me absorbing my Manager's job, and my wife absorbing the Secretary's job, is that we have very little free time.

I'm also not enthused about dropping 100k on the down payment, losing 30k in my existing business, and 20k in that one, until March. That's a lot of cash going out of the door. That business holds the same cycle mine does.

I would have been all over this earlier in the Summer, but I was paying down a bunch of equipment. That money could have gone to this business.
 
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