I did stumble upon a thread a couple of years ago in here, but wanted to see if there are any other perspectives on buying a business, now that the economy has shifted etc.
Friend of mine who owns a business is considering getting out, as he's approaching retirement. He'd like to sell one part of the business to me- the operating store and everything inside of it. The property is leased to him, so I would be the sublease company for up to 10 years, which is what the new lease was just renewed to. On the property, he has a kitchen, where he makes the product and also delivers it to a couple of his other stores and would like to keep it now, but eventually sell this as well. So, I guess you can say he has a distribution/kitchen business and store locations, but we are just talking about 1 location for now.
So, the simple math- store does 8-10k a week in gross sales and I'd be buying the equipment and an operating business. Staff and systems stay the same, I just slowly step in and he will be around to help me for 6 months as part of the purchase. For now, he would distribute dough balls, sauce, cheese etc to me and if I didn't want to buy from his distribution business, I'm free to buy them from wherever, but he cautioned me on his brand and flavors for 20 plus years and the pallets of the existing customer base. I don't want to change a thing, from staffing or anything- just want to meet the folks, solicit feedback and observe. If they believe they can improve the companies top and bottom lines, I'm all ears.
What is the business worth? I've seen numbers all over the map on multiples of weekly sales etc.
What would be some options to purchase the business vs an all cash purchase? Is free cash flow the most important to fill the void, if I wrote the check vs structure payments over time?
My goal would also be to increase the store sales and keep the overhead static, as my sense is his passion for marketing and other channels to increase revenue are waning.
Any feedback, suggestions, advice etc., would be greatly appreciated!