..buying a pool hall.

[jtaken]

Greetings. I don't post here often, but I read a lot of your guys' insightful thoughts on a daily basis. I just like to hear what young entrepreneurs have to say about the current day business man.

Anywho, I seek advice, if you don't mind.

I frequent this pool hall in my city, its the only pool hall in a 25 mile radius. The owner, an older gentlemen, is having some personal problems, and is looking to sell the business. It's in a decent location, pretty much smack dab in the middle of two other pool halls, ~25 miles apart. He already has a customer base, and all the equipment he is selling along with the business.

He gave me some figures, roughly saying that he averages ~2000 including utilities and the lease for the property, and he makes around ~3000...profiting 1000 per month. Some he puts into refurbishing the equipment.

He does all this without advertising anymore, basically just has a loyal customer base that keep coming back to the joint.

He wants to sell the business for 10-12k. My gut instinct is "too good to be true". To buy an ESTABLISHED business for that price seems obsurd. But, he does say that he just doesn't care anymore.

Basically, what I'm trying to find out is what am I missing. I go and talk to my CPA next week, but I figured I'd find some mixed opinions on the issue. What do you all think of this deal?

ANY and ALL feedback is greatly appreciated.

Thanks again,
Jason

[dkattis]

Hey Jason,

I sent you a private message. Would be great if you can respond.

But anyway, I feel it would be a good buy. If the owner can show actual figures, I'd see what your CPA has to say, and really look into buying it. I see what your saying about the asking price, seems to good to be true. But if he supports and shows evidence, it looks promising. Best of luck

[BC SEO Guy]

if those numbers are accurate then buy it and make it even more profitable by hosting tournaments etc... is it pool only? does it have any video games in it? does it sell food and beverages?

[Phranksizzle]

That sounds like an amazing deal. I would ask to see personal sales records and bank account statements. DEFINATELY get a CPA to look into his books. It could be true -- ya know. Older guy just wants to retire or do something else. Probably burned out on it. And you could easily remarket it. Make sure you look at the lease and see how much the rent, triple N taxes are on it. Verify all his bills (electricity/water/beer/etc).

If you just BARELY have 12k to buy it from him -- don't do it. Make DAMN SURE you have enough money to support yourself personally before you take the jump. I'm not trying to scare you, but just think about it. Also I would give it a full month, to think about it, ask to work under him (for free) and see the ins and outs of the business. Theres a lot of knowledge this guy can bestow upon you.

Frank
21

[BC SEO Guy]

That sounds like an amazing deal. I would ask to see personal sales records and bank account statements. DEFINATELY get a CPA to look into his books. It could be true -- ya know. Older guy just wants to retire or do something else. Probably burned out on it. And you could easily remarket it. Make sure you look at the lease and see how much the rent, triple N taxes are on it. Verify all his bills (electricity/water/beer/etc).

If you just BARELY have 12k to buy it from him -- don't do it. Make DAMN SURE you have enough money to support yourself personally before you take the jump. I'm not trying to scare you, but just think about it. Also I would give it a full month, to think about it, ask to work under him (for free) and see the ins and outs of the business. Theres a lot of knowledge this guy can bestow upon you.

Frank
21

^^ this is some good advice to follow

[jtaken]

@Frank

Definitely man. I'm not looking to rush into anything. He does say he has a few guys coming to talk to him, but from the way he explained it, it was a college grad looking to buy the business real quick AKA rush into it. He told me the guy only came to look at the place twice, didn't really ask too many questions, just showed that he "REALLY REALLY" wanted it. I'm writing a business plan as we speak about the matter, doing some number crunching, calculating worst case scenarios and the like.

I also am fully employed right now, this would be more of a side project. I currently do freelance web development, and if this kicked off I may just stop doing that.

I appreciate your guys' input.


Jason