Purchasing existing struggling business from family

[JKansas]

I'll try to keep it short but the details make it long.

I have a family member who has an apparel business. He is great at what he does, just not at how he does it. Behind on taxes, orders arent always on time, works out of home, etc. He has been doing this for something like 15 years, but he is really into trouble with taxes this time and there is talk of him giving up and finding another job.

I accidently saw his financials and am amazed. He does this out of his garage and with that reputation, i asked, and the response is his work is great, his timing is not, we learn to plan around it. His margins are great and again i'm amazed.

That said, we've joked in the past about me partnering with him to straighten him out. I have worked with him before, but always as employee. Now that i've grown up and gone to school (both college and owning my own), it's less of a joke. That said, I don't know that i can afford to partner with him with the mistakes he makes on taxes and the such. If i were to become involved I would want to own it all and pay him as an employee.

So i'm thinking about offering to buy his equipment for an amount reasonable enough to appease the tax man, leasing space, setting it all up, rebranding under the same name as new owners, same great work, keeping his exhisting clients, and my job would be to manage the office and orders and to promote and make new clients. I can come up with the cash to do this and have about 4-6 months of inventory costs covered at his current rate. Maybe more if I can get a LOC.

I grew up working for him and in college worked for two other shops so I have experience in set-up and function, as well as production. I love the business and have talked about it on here, it's not going away but it has evolved. He's hit that point where he's got kids and he's old enough that he's lost the passion to go out and expand it. If i can bring that passion with his work i think i can make it work.

All of this said, and my feelings aside, what I am looking for is how will someone who has owned their own business for 15+ years feel about working for a younger person that they used to employ? I can see it workign really well, and I can see it blowing up, i'm not sure at this point.

[Gary Barzel]

Well I am sure he knows that with the current trouble he has run into, it doesn't seem like there is much of a choice in getting to keep his business. That being said I don't know him personally but I would imagine if it's something he is passionate about he would want to keep the business or at least stay in the business. It would be best if you just asked him if he wants to still work in the same field, and if yes if he would mind working for you.

[JKansas]

Thanks for the response, i hadn't seen it sooner.

That is the point I am at now. I am doing what i can to help him when I can, and we've discussed it a little. If that become the case i think it will happen.

Thanks again

[MJB]

The only comment that I would make is that if you do decide to buy it out I would think very carefully about re-branding it. If the businesses is financially working and sales are coming in but the errors are the admin and backend then the guy is doing something right. The company, presumably will have developed goodwill and respect from the customer point of view. I would think carefully about taking all this away.

Mark
bigamericangiveaway.com
Increase your social media followers by owning your own
giveaway day. Prices start at $1 and increase by only $1 per day.