Need Business advice

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Abram86

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I looked at an empty building today that used to be a Dent removal/body work shop until last week when the owner moved into another location.
He wants 260,000.00 cash for it. Then he had me look at another shop that looks like a warehouse. I can fit up to 5 cars in there easily, but he wants 1000.00 per month. It'd be first month plus 250 deposit. He'd let me lease it for 3 months at a time. He was kinda hesitant because the building doesnt have drains so he mentioned he has a corner spot at his shop I can use to rinse down the cars then i can take them back and do interior. He also said his sign says detailing but he's gotten away from it due to not having time for it but he would send the detail customers to me. His business is well known. His new shop is a few feet away.
As I was sitting tonight a thought came to me to meet with him and tell him to let me use that spot for 25% of profit per month and he doesnt have to worry about anything.
I figure it might work because I wouldnt have to advertise and he said he'd send his details to me.
What do yall think?
Xtreme Auto
 
Are you saying you will offer him 25% of whatever your monthly profits are to use his corner spot and the warehouse? How will you show proof of profits? Would that be limited to $1000 a month? Sounds like you have some negotiating to do.
 
I've never negotiated before or even done anything like this before so I dont know where or how to start.

Xtreme Auto
 
I spoke with the owner and he will lease me out that wash bay and I offered 25% of gross income each month until my business picks up then It will go to 35%. He says he gives his customers vehicles a quick wash down free of charge but he wanted to know how much I'd do it for him. Should I tell him I'd do it free of charge if he keeps it at 25%? They are also willing to advertise my business in their front office.

Xtreme Auto
 
Sounds like you could've made a way better deal, so basically youve given away 25%-35% of your profits already? Good luck!
 
cleanmycorolla said:
Sounds like you could've made a way better deal, so basically youve given away 25%-35% of your profits already? Good luck!
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:iagree:

I would not be giving away any percent of my income. I think you should stay mobile unit you have a steady stream of customers. Once you have a steady stream then you can think about getting a fixed location.

With a fixed location I think most over look the additional bills and fees that need to be paid every month. (water, electric, sewage, garbage, rent, and so on)

Remember that if you have a fixed location the these bills still need to be paid and if business is slow then how will these get paid?

Just some things to think about :props:
 
Evan.J said:
:iagree:

I would not be giving away any percent of my income. I think you should stay mobile unit you have a steady stream of customers. Once you have a steady stream then you can think about getting a fixed location.

With a fixed location I think most over look the additional bills and fees that need to be paid every month. (water, electric, sewage, garbage, rent, and so on)

Remember that if you have a fixed location the these bills still need to be paid and if business is slow then how will these get paid?

Just some things to think about :props:
Click to expand...

100% Agree. DO NOT GIVE ANYONE ANY PROFIT....PERIOD! Stay mobile until a better opportunity comes up. It always will.

:iagree:
 
I just figured it'd be better than having to pay a guaranteed amount per month. If not for this opportunity I wouldn't ever have a chance to get a building on my own.

Xtreme Auto
 
Abram86 said:
I just figured it'd be better than having to pay a guaranteed amount per month. If not for this opportunity I wouldn't ever have a chance to get a building on my own.

Xtreme Auto
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I own my own business and just stay away...period. That is a horrible deal. Who pays for the taxes on the profit? Does he look into your books for making sure he gets compensated accordingly?

What determines 25-35% of profit?
Why pay an extra charge just to do business?
If you are so set on getting this business (which I would not), why can't you do a rinseless wash or waterless wash?

Is he willing to negotiate a fee less than 25%....say 5%.

Why did the previous tenant move....for real?

I recently turned down a 2nd location in a prime area (Corona Del Mar, CA a ritzy place) as the rent was very reasonable. I did a physical inspection of the place and found out even though it was in a prime spot...I would be the 5th business in 6 years!

Not a good thing as to why would my business do better. Additionally, the last business that was there was in my field of business and they accepted insurance which I don't.

Abram86, I cannot tell you what to do, however, based on what you have let us know in this thread....this is not a good opportunity....walk away as I said before another opportunity will come its way. I just hate the fact you have to give a % of your business to do business.....not good!!
 
Kamakaz1961 said:
I own my own business and just stay away...period. That is a horrible deal. Who pays for the taxes on the profit? Does he look into your books for making sure he gets compensated accordingly?

What determines 25-35% of profit?
Why pay an extra charge just to do business?
If you are so set on getting this business (which I would not), why can't you do a rinseless wash or waterless wash?

Is he willing to negotiate a fee less than 25%....say 5%.

Why did the previous tenant move....for real?

I recently turned down a 2nd location in a prime area (Corona Del Mar, CA a ritzy place) as the rent was very reasonable. I did a physical inspection of the place and found out even though it was in a prime spot...I would be the 5th business in 6 years!

Not a good thing as to why would my business do better. Additionally, the last business that was there was in my field of business and they accepted insurance which I don't.

Abram86, I cannot tell you what to do, however, based on what you have let us know in this thread....this is not a good opportunity....walk away as I said before another opportunity will come its way. I just hate the fact you have to give a % of your business to do business.....not good!!
Click to expand...

He used to do detailing until he got into body work full time so he's willing to let me get his detailing business. Its a new location on a busy intersection. I was the one to inquire on him letting me get that part of his business and im sure I can come up with a counter offer for him.
Im remaining full owner of my business im just basically paying rent by a percentage of my income

Xtreme Auto
 
Abram86 said:
He used to do detailing until he got into body work full time so he's willing to let me get his detailing business. Its a new location on a busy intersection. I was the one to inquire on him letting me get that part of his business and im sure I can come up with a counter offer for him.
Im remaining full owner of my business im just basically paying rent by a percentage of my income

Xtreme Auto
Click to expand...

Sounds like your making a bad decision based on your current financial state. Sure it would be beneficial right now but if you are successful, in a few years you could be paying triple what your rent should be. thus basically devaluing your business, taking profits out of your pocket.
If you have a solid business plan then ask him for a lower rent to start or if you dont have the finances wait until you do. Dont make a deal based on percentage of profit because you are too eager.
 
After taking into account your expenses and time, and your time is an expense, you would be giving away most of your profit.. That deal is insane. Don't let the excitement of having a shop blind you.
 
Abram86

The 2nd location that I turned down was at a real busy area, considered one of the highest gross income areas of Southern CA, and at a busy intersection. 2 Busy restaurants are in the same shopping structure.

I still walked away as you have to look at the whole picture.....will you succeed? How will you succeed? Just because it is in a busy area, why would it succeed? Remember, I would be the 5th business in 6years! Not good odds for me to succeed.

As for your case...how MUCH business will this guy give you? I am 100% Sure everyone in this thread sees this as a walk-away from opportunity. We ALL see it logically....not emotionally as you seem to be.

Any how, that is my opinion.
 
RawDetail said:
After taking into account your expenses and time, and your time is an expense, you would be giving away most of your profit.. That deal is insane. Don't let the excitement of having a shop blind you.
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Ill see if I can do 20% for 3 months then if business booms for me then he can accept 10% per month or I can have the option to leave.

Xtreme Auto
 
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