2. misc-audio
  3. 161901-2723

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
ml8764ag's avatar
ml8764ag
502 posts
 
Table jockey... I disagree...he should seek info WHEREVER he can get it...and keep the good stuff and disregard the bad. By posting here...he may get valuable input from his target customer base...

op... while I suspect it will indeed be an uphill battle...doesn’t mean it can’t work...keep doing your due diligence and don’t let the gadflies get you down!
kjohn1234
23 posts
 
From a former business broker, the value is determined by PROVE-ABLE profit. Inventory, if sellable, at his cost,fixtures depreciated. If the word potential leaves his mouth,leave. 
nonoise's avatar
nonoise
10,823 posts
 
Can you be seen from a mile away?
If so, don't do it.
twoleftears's avatar
twoleftears
5,318 posts
 
Let's break this down.  You pay him 10K.  You also need to pay rent, and do upgrades to the interior.  You have no idea whether the customer base will stay with you or follow him.  You'll need an advertising budget.  Insurance.  Utilities.  And you plan to spend 8-10 hours six days a week running the place.  Or hire someone.  How much does that all add up to?  How many of your own used LPs do you need to sell to recoup even all that initial outlay?  How long will that take?  What will you be living on in the interim?  Is this a hobby that you can afford to pour $$ into, or will it be part/whole of your livelihood?  In short: "does not compute".
lloydc's avatar
lloydc
751 posts
 
Good advice above.  I agree with those above who question whether you would be buying anything more than a headache and a quick loss.     No reasonable businessman is looking for a record store in California to buy.  You might approach it in terms of how much the seller should be paying you.  He wants to get away!  You could make a counter offer, once your due diligence reveals the liabilities he is trying to escape from.
   Don’t ever do anything like this without an attorney.  They would need to create an LLC to own this money pit, for a start.  California is a regulatory nightmare. 
More to discover