Buying a business without OT Baller status | TigerDroppings.com

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LSUTOM07
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Buying a business without OT Baller status



Long story short.. a friend of the family owns a construction supply company that represents various vendors across a three state region. He has plans to sell the company in the next 8-10 years. I am very close with him and have discussed how he operates his company and the revenue that he is currently bringing in. I am very interested in the work he does but would not have anywhere near the money to buy the company from him when the time comes.

Is there any way for someone making in the ballpark of 150k-200k a year to purchase a company worth 6-10 million?







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Meauxjeaux
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re: Buying a business without OT Baller status


Cash + owner finance is the only way to go.

Private purchase with the business paying the note.

It can be done.

The key to making it work is

quote:

I am very close with him






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LSUTOM07
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Member since Dec 2011
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re: Buying a business without OT Baller status


quote:

Private purchase with the business paying the note.



I figured that. I would just have a hard time convincing myself that this would be a good idea knowing that his "retirement" money rests on the fate of the business, when he could just sell his company to a much larger company for a true buy out.






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StrangeBrew
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re: Buying a business without OT Baller status


He owns a rep agency? With him out of the picture, some lines may find other ways to go to market. In other words, he is the business.

As far as another larger rep agency buying his business it will not happen. The moment they buy, the lines represented will evaluate. In most cases the buying company would have competing line and as such will terminate their relationship.

I deal with a lot of rep agencies and have never seen one flourish after the principal retired.






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LSUTOM07
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re: Buying a business without OT Baller status


You seem to have a lot more knowledge on the subject than I do so I am not disagreeing with anything you have said here.

But he took over the business many years back when it was much smaller. He has since created new relations with vendors in both the commercial and private sectors while continuing to represent the vendors from the previous owner. The company has flourished since. So he was successful in taking over and expanding from the previous owner.

If I were to actually consider going into this business, I would want to work for him and learn every single aspect of the company, while forming business relations with both the vendors and customers.






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StrangeBrew
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re: Buying a business without OT Baller status


quote:

I deal with a lot of rep agencies and have never seen one flourish after the principal retired.


Well you just proved me wrong in this regard. Most of the rep agencies that I know are family business's. When the second generation gets involved they are not hungry and not into hard work. They kind of live in the past.

The guy you are talking about is an aggressive salesman. He took a business and grew it. I think you will ahve a better chance at success if you follow his model instead of looking at it in static mode.

While you are learning the business be sure to make note where you would do things different than they are currently being done.

Owning your own business will be the most rewarding and also the most challenging thing you have ever experienced.






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LSUTOM07
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re: Buying a business without OT Baller status


quote:

The guy you are talking about is an aggressive salesman. He took a business and grew it.


Yep you pretty much nailed it.

quote:

Owning your own business will be the most rewarding and also the most challenging thing you have ever experienced.


I think the challenge is what drives me. To build upon and sustain a profitable business would be the ultimate. Thanks for the advice!






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Meauxjeaux
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re: Buying a business without OT Baller status


Nice catch that it's a rep agency. I read supply business and was thinking it was a wholesale supply company.

Woah, that hits close to home.

Family business (which I am not a part of) is a rep agency I can tell you first hand that it can flourish after the principal has 'retired'.

However, I will agree on the evaluation from the lines... if OP has not been an actual part of the business for a long time prior to buying it, he'll have a very tough time.

30 day contracts and commission only is a hard way to make a living.



This post was edited on 11/27 at 9:09 pm


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El Josey Wales
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re: Buying a business without OT Baller status


Does his company rep a broad line of products or a specialized market?





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LSUTOM07
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Member since Dec 2011
503 posts

re: Buying a business without OT Baller status


quote:

Does his company rep a broad line of products or a specialized market?


A broad line of products. I think the biggest portion of sales from one specific market only consists of 20% of total sales.






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