Buying a business

[TopProducer]

Recently I met with a friend of mine who has been looking at selling his pizza business. He took it over right before the pandemic from the previous owner who had run it for 13 years.

He was able to turn around and get it running right and has made enough money to basically pay off what he owed on it in a year (during the pandemic) and currently brings in about $1mil a year. He is thinking about selling out because he is more of the Jon Taffer personality. He went in fixed up the business got it running like it was supposed to, and now he's kind of bored with the whole project and is looking for something new.

I have been looking to add another stream to my income, but the downside is that it's 2 hours away. Does anyone have any experience running a brick-and-mortar business remotely? He's still looking at about a 2 year timeframe before he gets out, so there may be a way to work out systems and processes, but I don't know if it would be worth trying to attach my name to it with the distance hurdle.

Thoughts?

 

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[BizyDad]

Recently I met with a friend of mine who has been looking at selling his pizza business. He took it over right before the pandemic from the previous owner who had run it for 13 years.

He was able to turn around and get it running right and has made enough money to basically pay off what he owed on it in a year (during the pandemic) and currently brings in about $1mil a year. He is thinking about selling out because he is more of the Jon Taffer personality. He went in fixed up the business got it running like it was supposed to, and now he's kind of bored with the whole project and is looking for something new.

I have been looking to add another stream to my income, but the downside is that it's 2 hours away. Does anyone have any experience running a brick-and-mortar business remotely? He's still looking at about a 2 year timeframe before he gets out, so there may be a way to work out systems and processes, but I don't know if it would be worth trying to attach my name to it with the distance hurdle.

Thoughts?

Plenty of pizza places, and restaurants in general, have absentee owners.

How good of a leader do you have in place there?

If he is the leader, and he goes, you can expect things to start to go downhill.

But if he has put in the right systems, and has the right people running those systems, then all you should have to do is manage the managers. And that's something you can do remotely. Maybe you have to show up for a meeting with your managers every so often. That's doable.

 

[TopProducer]

Plenty of pizza places, and restaurants in general, have absentee owners.

How good of a leader do you have in place there?

If he is the leader, and he goes, you can expect things to start to go downhill.

But if he has put in the right systems, and has the right people running those systems, then all you should have to do is manage the managers. And that's something you can do remotely. Maybe you have to show up for a meeting with your managers every so often. That's doable.

I think that is my largest concern when I think about this. A large part of the reason the business turned around the way it did was because of how he was managing it. I'm afraid that if he left there would be an attrition in the culture he built, especially if a more traditional manager came in.

 

[BizyDad]

I think that is my largest concern when I think about this. A large part of the reason the business turned around the way it did was because of how he was managing it. I'm afraid that if he left there would be an attrition in the culture he built, especially if a more traditional manager came in.

Why don't you offer to buy a majority percentage? Keep him involved as a minority owner.

Get him to commit to staying on board for several months to train up the next manager.

And then you manage that manager, and he gets to keep a small percentage of trailing profits for his trouble.

And if everything goes sideways, he still has some skin in the game to help you pick up the pieces if things go wrong.

 

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