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Opening Record Store

Looking for advice from my fellow audiogoners...I have the potential to move into a store front that is already being operated as a record store (lps only) and become the new shop proprieter/owner. The owner has offered me the space (rediculously cheap rent) in a good area of town. He has had his store for about 5 years now and has a steady customer base. He will be taking all of his inventory and record storage bins that were in the store.He has a web site set up already and signs out front indicating the name of the shop...I plan on rebranding the shop with name change and interior upgrades. It is not a large space maybe 800-1000 square feet. I have a rather large inventory of my own so my up front investment of vinyl would be minimal. The owner wants me to buy him out..basically give cash in return for his customer base and the potential to get my hands on pretty good collections. I am trying to come up with a fair valuation of something like this and I am looking for advice..What do you think something like this is worth? Thank you in advance.
fromunda
thecarpathian's avatar
thecarpathian
4,796 posts
 
I don't quite understand what you will actually be getting for your $10,000.
No established store name, no inventory, the cost of remodelling a building you don't own....
roberjerman
4,319 posts
 
Waste of $10K! If such a powerhouse as Tower Records with 130 stores couldn't succeed with brick-and-mortar stores ... used-record sales are best done online.
andrewkelley
276 posts
 
I’ve done this before. Here is my advice. Don’t change the name, remodel is fine. If you change the name you will lose the established customer (and have to buy new signs!) Is the current storekeeper the building owner? If not, what are you giving him 10g for? He’s just gonna go across town, tell his customers he’s moved and leave you in the dust. For 10g you should license the rights to the store name, do not t buy any asset or you will be encumbered by any debt the owner my have under that name. Just message me if you want help. I’ve re-established two business in my town. One has been here since 1951 and the other since 1974, I know the challenges of retaining a customer base while making the changes needed to survive.  
jaybe
753 posts
 
What's your mother say?
mahler123
3,399 posts
 
Totally not my field but I am with the others that are puzzled what you are getting for 10K.  If you were allowed to keep the business name and the web domain, that would possibly justify it, based on the volume of sales, but if not...
   Your friend may be taking advantage of your friendship here in a business transaction.  My advice would be to decline.  If he moves and isn’t able to rent the space (how many people want to take a space that is set up to sell records?) then you can reconsider and approach him about renting and get a much better deal
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