I currently sell at a farmers market in a small town and do cakes on the side. A woman came to the market one day and said she was selling her bakery about an hour away and asked if I was interested. I'm excited about it and I'll be going with my family to do a walk through in one week.
It's an established bakery, but she has recently had to reduce her business due to the declining health of her husband (also the reason they are selling). I've never been to the town that it is in. It's only slightly bigger than the town I sell in now, but she says there are no store front bakeries within 40 miles ( we live in a rural area) of the little downtown area that the bakery is in. It's within blocks of the courthouse, community college and police station. She has deals with the local community college that would be passed along to me and I would sell at the local farmers market there to building up a customer base. I'll also be mapping out what store fronts within a mile we would be in competition with.
I have discussed just a little bit with her about the bakery. I'm the type of person that once I actually see the place in person I'll be able to grasp everything better, but she keeps asking me if I have any questions. I don't understand a lot of the business aspect of this, but thankfully I have a bunch of people in my life that do understand this. I have asked for copies of her business plan, bills, expenses, etc. Any suggestions of questions I should make sure to ask her in a week? She said I could contact her anytime and any questions I have she'd be happy to answer. Thanks!
There are many people on these boards with more experience than me in buying a business, but here are my suggestions:
1) You need to see P&Ls for at least the past year, farther back if you can.
2) Does she rent her space or own? Is she selling just the business or the building? If she owns the building and is keeping it, what would be the lease terms for the bakery? Is there any chance that the landlord will raise the rent to a rate that may not work for you?
3) How much for the key? (I've come to find out that in some areas key money is not the norm).
4) What equipment comes with the sale of the business? What recipes? Website? Trademarks?
5) How many employees does the bakery currently have? How long have they been there? You have to have a way to gauge how loyal the employees are to the current owners, because I've read many instances of employees staying on after a sale but the new owner gets attitude and pushback when they try to change things.
6) What are the most profitable/high volume items the current owners have, and is it something that you feel comfortable doing? Example, let's say they are known for their breads, but you don't really want to do breads, you want to concentrate on cakes, will that be an issue in terms of your future sales?
7) Is there a manager(s) in place, or were the current owners managing the business?
Here is a question for you: It seems that the bakery may be a bit of a commute for you. If it's an hour drive from where you currently reside, are you willing to spend 2 hours on the road each day on top of all the time it takes to run a retail establishment? If you have a family of your own, how would they feel about this? Is moving feasible?
Hope this helps.
I found in the beginning, it cost less to open my own business, rather than buy someone's stuff. I started small and bought new equipment as I could afford it.
I also have a cupcake trailer and sell at our farmer's markets. I run both of my shops out of one big location now, which is 10 minutes from my house. It sounds like there may be a need for your store in your own area.
You might want to check out doing your own thing. And get a good accountant.
Good luck what ever you decide. I just wanted to share what I did.
And keep in mind that it is an hour away. Do you really want to be traveling 2 hours for work every day. I know city people do this but I know that a lot of country people hate doing it. It can become a real drag on your life, I know from experience.
I'm curious, how did it end up?