Sounds like a clusterfuck to me. On Feb 23, 2016 4:57 PM, "That One Guy /sarcasm" <[email protected]> wrote:
> Salons are service industry with subcontractorish environments, so it's > not all that different than wisp, except it's all broads. > The salon my woman works at is failing, poor management decisions, > partners who are family (mother funded, daughter managed) mother owns 51 > percent daughter 49. At one point it was an established and successful > business, but feelings got hurt, partners fighting, a staff coup that took > a substantial amount of clientelle, facilities not maintained. No clear > company structure as far as owners getting paid. A 7 thousand dollar and 13 > thousand dollar note owed to the mother partner, etc. Management software > client capture went from over 800 clients to under 200 captures over a one > year span indicating to me the "staff" quit putting a lot of services on > the books and was pocketing the cash. It was an llc but they quit paying it > and transferred it into what they refer to as a partnership with the 51 49 > thing, I have not seen that documentation > > I assume a lot of this could be correlated to many of your purchases of > family run wisps. > > This has the potential to be turned around, the salon had a good > reputation, and volume at one point, and its the only full service one in > the town, so it's not completely failed. There also is room to incorporate > some other sources of revenue into the mix. > > The 51 percent partner wants out, they would like to simply recoup the > majority of their outstanding debt and was their hands of the matter. > Initially this was offered to us for 7k but that left an outstanding > liability of 13 on the business to the same person, and that note is secure > via a mortgage extension. That didn't sound like a good risk so we told > them to get a better proposal consisting of buying out that half of the > partnership as well as a second proposal for buying out the entire > partnership. The "assets" including minimal revenue of a single occupied > station for a year was informally estimated at around 34k. > > The daughter partner who is the primary "contractor" had a 45k recorded > revenue. I don't recall the revenue from the other occupied chair of the 5 > chairs and the retail had substantially dropped, I suspect due to it > becoming free when nobody was looking. > > Recovery could take place, as they offer the full spa set of services, > however they currently are limited in their massage and facials by > contractors who don't show up. This can be resolved fairly quickly for the > massage therapist by recruiting one I'm aware of who is looking for a new > place to operate because her stand alone office did not generate the > revenue to justify the expense and overhead. Also my it job has allowed me > to build good personal relationships with a lot of beneficial businesses, > primarily the beauty school for recruiting fresh "contractors" to fill the > empty chairs, they just don't come with clients. > > This is a more rushed scenario than I would prefer, this was a 3-5 year > plan, but circumstances presented. Our lust for business ownership stands > to cloud judgement, and that in itself is enough to walk away. > > We have a meeting later this week for presentation of the proposals. What > I don't know is what documentation in particular I should request. I can > ask for "financials" but I don't know what that actually means, or what > further information to ask for. > > I'm reaching out here because you guys are my favorite cheap dates, and a > lot of you have experiences more valuable than any advice I could pay an > attorney for. After this next meeting is when our expenses start, so we > need to be able to make a personal judgement at that point if it's a good > enough opportunity to go to a lawyer and start paying for the non > refundable advice. It's also when we make the decision of how foolish we > want to look in front of our bankers. I like my banker though, and he might > be in poor spirits and need a good laugh. > > Smart me knows this is not the right time to take risks like this when I > only have 7 short years til my boy needs a college education and if this > goes south, mom and dads financial support will be out. But the potential > makes it worth looking at, like watching a train wreck. There are also some > other long term prospects this makes possible so that benefit alone makes > it well worth an investigation. > > I really would appreciate some sage advice from experience in small > business. > > > From what I have seen, there is no formal business structure, in other > words I don't see >
