I got offered to buy a company

[DaHeezy]

One of the companies I represent wants out of their business and proposed selling it to me. Not that the business is tanking, but because they just don't have the passion to keep growing this company and it's a small percentage of their whole business

It's a cake company that does easy bake all natural plant based protein ingredients. It's pretty much quick bake cakes but for people who want only plant based ingredients. You put the powder in a mug, put a couple of tablespoons of water, nuke it for 90 seconds and you have a moist delicious cake

They want to sell me the company and all it's machinery. It's the only machinery in Canada that can produce the product. I've been representing them for about 6 months and they were trending up rapidly

I don't know if I want to buy the business though. I don't see myself owning this business, or any type of business. Brokering suits my skillset more. It's less work with high pay. But if this company if run properly it could literally make millions

I got some thinking to do this week

On top of that the brewery threw me a bone too. I've been doing so well they want me to be their sales director. Decisions decisions

[highwhey]

i would run the other way. pretty sure i will be bald from stress by end of year.

owning a business is very rewarding in financial terms, but managing people is a bitch. trying to instill in them the attitude and get them to buy into your vision is an uphill battle.

i

[nathanjizzle]

life is a bitch. anything that is diserable requires magnificent amounts of time and money.

[DaHeezy]

[QUOTE=highwhey]i would run the other way. pretty sure i will be bald from stress by end of year.

owning a business is very rewarding in financial terms, but managing people is a bitch. trying to instill in them the attitude and get them to buy into your vision is an uphill battle.

i

[highwhey]

That's why you work on and in the business first. When you generate sustainable flow you hire a solid management team. That's where business owners go wrong. They start the other way first.

What makes this business sustainable is I'm buying the facility and it's machinery. There's a ton of potential to outsource. Lot's of these confectionery companies would pay a premium for this type of kitchen. It's the only one in Canada doing this right now. That's where I can see this going.
i get what you're saying, but an established business like the one you mentioned will not be cheap at all. you'll have to pay 3x or more their revenue to purchase it. which means it will take a few years to recuperate your money.

at least that's how it works in the states. i spoke to a former owner who sold his business and that's the information he provided.

and owning a business when you have a management team in place means significantly less profit especially in the food industry, a low margin industry.

[RoseCity07]

I've heard it's best to buy a company being sold for the second time but it does sound like a good deal. Just know you better be paying pennies on the dollar for that machinery. You have a lot more power than you think. Try to get it for as cheap as possible not at a price they set.

[Jasper]

One of the companies I represent wants out of their business and proposed selling it to me. Not that the business is tanking, but because they just don't have the passion to keep growing this company and it's a small percentage of their whole business

It's a cake company that does easy bake all natural plant based protein ingredients. It's pretty much quick bake cakes but for people who want only plant based ingredients. You put the powder in a mug, put a couple of tablespoons of water, nuke it for 90 seconds and you have a moist delicious cake

They want to sell me the company and all it's machinery. It's the only machinery in Canada that can produce the product. I've been representing them for about 6 months and they were trending up rapidly

I don't know if I want to buy the business though. I don't see myself owning this business, or any type of business. Brokering suits my skillset more. It's less work with high pay. But if this company if run properly it could literally make millions

I got some thinking to do this week

On top of that the brewery threw me a bone too. I've been doing so well they want me to be their sales director. Decisions decisions

unless you are TOTALLY versed in the company I would stay away.
I will give you an example -
A friend of mine is in the business of supplying tee-pee poles for tee-pee's.
You have to peel the poles and doing by hand would be unbearable.
They have a machine that does it. He had one other competitor in USA and the guy was retiring from Montana - my friend bought his machine.
So my friend is the ONLY person to supply tee-pee poles in USA.
How lucrative ?? thousands.

[Draz]

Sounds like a small business?

Businesses like that you have to be on sight there hand in hand to help with operations and customer service. Never trust people getting paid less than $20 an hour to provide great service..

Your time will decrease. It's nice if you have money to spend and can do it but if you aren't passionate about the business either you'll find yourself in the same position.

[DaHeezy]

i get what you're saying, but an established business like the one you mentioned will not be cheap at all. you'll have to pay 3x or more their revenue to purchase it. which means it will take a few years to recuperate your money.

at least that's how it works in the states. i spoke to a former owner who sold his business and that's the information he provided.

and owning a business when you have a management team in place means significantly less profit especially in the food industry, a low margin industry.

I've been their broker for almost a year now so I know how much the business is valued at and where it can go. I can get it for a significant value. I can get it for pennies on the dollar. I would inherit the production team as well which is very well managed. Plus I'll be working on the business.

Like I sad, the value is not on the food, it's in the machinery which can be outsourced. I'm buying it to potential turn it into a third party manufacturing site. HUGE money. Especially when it's a one of a kind facility. Nobody else is doing it

[DaHeezy]

unless you are TOTALLY versed in the company I would stay away.
I will give you an example -
A friend of mine is in the business of supplying tee-pee poles for tee-pee's.
You have to peel the poles and doing by hand would be unbearable.
They have a machine that does it. He had one other competitor in USA and the guy was retiring from Montana - my friend bought his machine.
So my friend is the ONLY person to supply tee-pee poles in USA.
How lucrative ?? thousands.

I see your point. But you can't compare teepees to food based products. The scale is WAY more bigger. I know a brewery here in Vancouver that leases out commercial vats. There's inhouse beer makes good dough but they essentially increased their profitability by leases space and material. This food company is much larger than that.

But yes, there is risk in every venture going into manufacturing.

[DaHeezy]

Sounds like a small business?

Businesses like that you have to be on sight there hand in hand to help with operations and customer service. Never trust people getting paid less than $20 an hour to provide great service..

Your time will decrease. It's nice if you have money to spend and can do it but if you aren't passionate about the business either you'll find yourself in the same position.

You could have just QFT my second post. I essentially said the same thing.

I've spent a decade as a small business advisor so I'm pretty good at navigating through risks and scaling small companies. So there's where my passion lies. If I can scale it and grow it there is potential to flip it, or sell to a large corporate.

[Bosnian Sajo]

This goes without saying, but if you DO decide to run this business...don't think that it will be successful without you there every single day. If you seriously consider taking over, I'd ask the person who is running it right now to accept you as an apprentice for 1 year and THEN take over their business.

It's not a ridiculous thing to ask, especially since you mention that it's a one of a kind business, it's not like you can just find anyone with experience baking cakes in mugs lol.

Coming from a family that ran it's own business (and still does to this day), I can for sure tell you that running your own business is so much more than a full time job. You worry about the littlest things and (if you are successful and actually care) will find yourself repeating the phrase "there is ALWAYS something to do at the shop". My parents constantly use that phrase...I ate my parents and covered it up by tying their remains to an anchor and tossing them out into the gulf of Mexico. I'll tell ya though, there is nothing quite like being in the shop at the end of the day once the last customer has left and you've locked the doors/prepared everything for the next morning. It's a sense of pride that is just impossible to get from working for someone else.

Owning your own business is great.


EDIT: after reading your post above this one, it seems that I am just regurgitating the same thing that you and others have already mentioned :oldlol: ah well, at least you know it's fact.

[Bosnian Sajo]

unless you are TOTALLY versed in the company I would stay away.
I will give you an example -
A friend of mine is in the business of supplying tee-pee poles for tee-pee's.
You have to peel the poles and doing by hand would be unbearable.
They have a machine that does it. He had one other competitor in USA and the guy was retiring from Montana - my friend bought his machine.
So my friend is the ONLY person to supply tee-pee poles in USA.
How lucrative ?? thousands.


Hmmm....not for long...:D

[DukeDelonte13]

if they are actively shopping a business to get out of it.....

Probably not a great idea.

[PullupJay]

https://media1.tenor.com/images/38cde847cb397b812079d08ed47196d3/tenor.gif

[DaHeezy]

This goes without saying, but if you DO decide to run this business...don't think that it will be successful without you there every single day. If you seriously consider taking over, I'd ask the person who is running it right now to accept you as an apprentice for 1 year and THEN take over their business.

It's not a ridiculous thing to ask, especially since you mention that it's a one of a kind business, it's not like you can just find anyone with experience baking cakes in mugs lol.

Coming from a family that ran it's own business (and still does to this day), I can for sure tell you that running your own business is so much more than a full time job. You worry about the littlest things and (if you are successful and actually care) will find yourself repeating the phrase "there is ALWAYS something to do at the shop". My parents constantly use that phrase...I ate my parents and covered it up by tying their remains to an anchor and tossing them out into the gulf of Mexico. I'll tell ya though, there is nothing quite like being in the shop at the end of the day once the last customer has left and you've locked the doors/prepared everything for the next morning. It's a sense of pride that is just impossible to get from working for someone else.

Owning your own business is great.


EDIT: after reading your post above this one, it seems that I am just regurgitating the same thing that you and others have already mentioned :oldlol: ah well, at least you know it's fact.


Good on your parents for practicing those values and passing it on. There were so many business owners I've worked with in the past that thought they were buying a gold mine and thought they could plug someone with management experience in to run it and walk away rich. I always advise you have to work on and in the business.

[DaHeezy]

if they are actively shopping a business to get out of it.....

Probably not a great idea.

Again, I've been their broker for almost a year now and this company is profitable and trending up. They run several businesses and this one was consuming the most time. They are selling because of time management, not because of a failing business. If they were failing, then I've failed too as their broker. They just don't have the time and investment to see it though and want to focus on their more profitable businesses.

[rufuspaul]

Go with the brewery. People will always want beer, not so much shitty vegan cake in a cup.

[DukeDelonte13]

Again, I've been their broker for almost a year now and this company is profitable and trending up. They run several businesses and this one was consuming the most time. They are selling because of time management, not because of a failing business. If they were failing, then I've failed too as their broker. They just don't have the time and investment to see it though and want to focus on their more profitable businesses.


Ok so they are getting out of the one business they manage that's the biggest hassle to run, and its not as profitable as their others.

However you wanna phrase it.

Like i said, they are shopping it for a reason.

Be weary of other people trying to peddle "great investment opportunities". If it was so great they'd keep other people the f*ck away from it.

[DaHeezy]

Ok so they are getting out of the one business they manage that's the biggest hassle to run, and its not as profitable as their others.

However you wanna phrase it.

Like i said, they are shopping it for a reason.

Be weary of other people trying to peddle "great investment opportunities". If it was so great they'd keep other people the f*ck away from it.

Did you ignore the part where I said I'm their broker? I have literally all the inside information I need about their profitability. I literally bring their product to market. It's not like they are actively shopping it. Selling to brokers or distributors is a natural progression for small companies. Why would I even consider it if this company wasn't already currently making me money or if it wasn't profitable?

Being the least profitable doesn't mean it's a bad business. It just means what it is. If a company is making $1.12 to the dollar vs a company that consumes more time makes $1.05 to the dollar what do you do? It's not like they can't run that business, it's just making a smarter investment. Sell it to someone that can invest the time and make a small profit.

You're interpreting this as some shady business trying to pawn off a dying business. Far from the truth. Like I repeated already, I am their broker. There is no risk at all.

[DaHeezy]

Go with the brewery. People will always want beer, not so much shitty vegan cake in a cup.

They approached me to be their director of sales. Not into working for someone and work a 40 hour week. If the money is right..

You'd be suprised how much they generate. The market if shifting into this whole plant based stuff do to treatment of animals. Think where Beyond Meat is going. It's the next evolution in health foods.

The machinery alone has multiple options. Cupcakes, doughnuts...all these confectionery companies to source out. It cuts the baking time by a substantial margin. Right now it's got more potential to make bigger money

[Bosnian Sajo]

They approached me to be their director of sales. Not into working for someone and work a 40 hour week. If the money is right..

You'd be suprised how much they generate. The market if shifting into this whole plant based stuff do to treatment of animals. Think where Beyond Meat is going. It's the next evolution in health foods.

The machinery alone has multiple options. Cupcakes, doughnuts...all these confectionery companies to source out. It cuts the baking time by a substantial margin. Right now it's got more potential to make bigger money


So in that case, I say jump on it. You know it's legit because you're their broker, you assume the business has potential to be bigger than it currently is...what's the worst that can happen? If you don't like the business, you can always flip it if you can prove that it is indeed profitable (which you have already stated you can).


Huge responsibility, but shit why not dude. Also, idk how that company makes their money (is it on customers coming in buying product, do they ship...do they do wholesale which is what I wanna mention), but if you can find businesses that are willing to sell the product in their stores...it might open up a whole new door for you. Wholesale, while still a demanding business, is a lot more laid back than serving customers day in and day out. You can actually get away with hiring people to make the product while you just worry about the logistics.


Food for thought. I'm interested in how you got into becoming a broker though. Like I realize you probably spent time as an agent, but how does one make the leap...is real estate doable as a side hustle for someone who has a full time, 40hr work week?


Inshallah by the beginning of next year I want to buy my first property (most likely a foreclosed home in a nice area) and figured it would be of value for me to get a real estate license and be my own agent...save the 3% (1.5 technically, right? split with w.e firm you're signed to) which would in turn pay for the license by itself and I could start my side hustle. It's an idea, not something I'm 100% doing just something I've been discussing with my pops (whom I highly highly value his financial advice in life...never has steered me wrong). What do you think about that, any input or advice?

[DaHeezy]

So in that case, I say jump on it. You know it's legit because you're their broker, you assume the business has potential to be bigger than it currently is...what's the worst that can happen? If you don't like the business, you can always flip it if you can prove that it is indeed profitable (which you have already stated you can).

The biggest decision I have to make is pretty much drop the brokerage and go into full-time work for myself. I would lose all the accounts I've been building. The long term gain of buying this company is where I need to decide which basket I want to put my eggs into.


Huge responsibility, but shit why not dude. Also, idk how that company makes their money (is it on customers coming in buying product, do they ship...do they do wholesale which is what I wanna mention), but if you can find businesses that are willing to sell the product in their stores...it might open up a whole new door for you. Wholesale, while still a demanding business, is a lot more laid back than serving customers day in and day out. You can actually get away with hiring people to make the product while you just worry about the logistics.

Currently the company is making money selling wholesale through distribution. Because we've hit large Canadian accounts like Whole Foods and gone through some of the smaller distributors the cash flow has been sustainable into a positive net EBIT and is trending upwards. They do some direct to customer online but it doesn't push the needle. They have never entertained outsourcing because they were more interested in building the brand. Which is the meal ticket I wanted to exploit. This is where the new grind would be if I were to take over. I would inherit the operation including the staff so that side of the business could still run



Food for thought. I'm interested in how you got into becoming a broker though. Like I realize you probably spent time as an agent, but how does one make the leap...is real estate doable as a side hustle for someone who has a full time, 40hr work week?

I took the leap while working at the advisory firm. There were some poorly run distributors some of these businesses I had been working with that had severely little margin to work with. I went straight to the manufacturers to ask what was their wholesale price to distribution to see if I could salvage margins for my businesses. Turns out the distributors were eating up all the margin. I started with two manufacturers and proposed a contract to broker for them and get out of the distribution company they were with and go direct. I still had my business contacts so it was a natural marriage. I managed to save money for both parties and broke off some nice change for myself. I grew one company from a million dollar company 2 years ago to now a 5 million dollar company. I've just been acquiring more manufacturers to my profile including this current one. All in the food distribution industry.
I pretty much do this all from home. It was all networking.


is real estate doable as a side hustle for someone who has a full time, 40hr work week?

If you do real estate as a hobby then yes it's doable. But, if you want to make a career of it then no. Find a real estate team that is small but growing and see what the market trends are in your city.


Inshallah by the beginning of next year I want to buy my first property (most likely a foreclosed home in a nice area) and figured it would be of value for me to get a real estate license and be my own agent...save the 3% (1.5 technically, right? split with w.e firm you're signed to) which would in turn pay for the license by itself and I could start my side hustle. It's an idea, not something I'm 100% doing just something I've been discussing with my pops (whom I highly highly value his financial advice in life...never has steered me wrong). What do you think about that, any input or advice?

My cousin went the exact same route. Flipping foreclosures, fixing it up and reselling. But you have to be really building savy. You need your building inspectors license too. Fixer uppers take time as opposed to buying newer developments and renting out. the former takes time, the latter is a quicker more scaleable route. But get your license regardless because it will be an asset no matter what route you decide.

[highwhey]

how

[Duderonomy]

i would run the other way. pretty sure i will be bald from stress by end of year.

owning a business is very rewarding in financial terms, but managing people is a bitch. trying to instill in them the attitude and get them to buy into your vision is an uphill battle.


Tell me about it. I was training a girl and work and she listened to nothing but had an answer for everything. Ahh the old days when apprentices listened, watched and learned from example.

[DaHeezy]

how’d you convince manufacturers to deal directly with clients? in my industry these distributors/reps plaugue our industry bc not only do they eat up profit, they suck ass. need a product in a pinch? good luck getting that distributor to call you back within a reasonable time. it’s not sustainable to have to go through one person per region.

Because I already had the network of businesses in my back pocket. I knew all the logistics in terms of their systems and servicing. I also pretty much knew what the distributors were making so basically cutting out the middle man and proposed them a contract to essentially do what the distributors do at the fraction of the cost. The only thing they would need to take care of is the transposition. It was an easy transition because these manufacturers were still growing. But although they had a fantastic product they heavily relied on the distributor to grow their brand so that's where the money was sunk. through me they are making way bigger margins, and so is the retailers as I am able to bring their costs down as well

Distribution is going the way of the dog. Direct purchase is where the money is at, which is why I got into it at the perfect time 2 years ago.

[Bosnian Sajo]

I took the leap while working at the advisory firm. There were some poorly run distributors some of these businesses I had been working with that had severely little margin to work with. I went straight to the manufacturers to ask what was their wholesale price to distribution to see if I could salvage margins for my businesses. Turns out the distributors were eating up all the margin. I started with two manufacturers and proposed a contract to broker for them and get out of the distribution company they were with and go direct. I still had my business contacts so it was a natural marriage. I managed to save money for both parties and broke off some nice change for myself. I grew one company from a million dollar company 2 years ago to now a 5 million dollar company. I've just been acquiring more manufacturers to my profile including this current one. All in the food distribution industry.
I pretty much do this all from home. It was all networking.




Oh shit, I misunderstood you then. I thought you were in real estate brokering, thus the real estate question lmfao :facepalm


But hey, good shit. Sounds like a pretty good position so I understand the difficulty of jumping into a whole new thing.

[DaHeezy]

Oh shit, I misunderstood you then. I thought you were in real estate brokering, thus the real estate question lmfao :facepalm

No, not a mortgage broker. I'd find that job too be boring. Essentially your shopping for lenders. I don't see any real challenge in that. Brokers and agents aren't mutually exclusive but they do separate jobs in the transaction process



But hey, good shit. Sounds like a pretty good position so I understand the difficulty of jumping into a whole new thing.

It's definitely a good problem to have. Really a win/win.

But I've actually decided against it. The biggest investment is time and I'm having way too much fun with the excess free time I have. It is still in my best interest to see if this company does sell that the new owner is still heavily invested in growing the brand.

[DaHeezy]

When it rains it pours. Another company I represent just offered me over the weekend a National Sales Manager position. It'[s a company that does promotional gear mainly for the hospitality industry. Serious bank but a lot of travel. HO is in Florida and the Canadian office is in Toronto but willing to move it to Vancouver if I take it.

What great problem to have with all these offers. I'm actually gonna buy a lottery ticket today