[h-cost] Buying a costume business
From: Sylvia Rognstad [EMAIL PROTECTED] Subject: [h-cost] Buying a costume business I just heard about an opportunity to buy a costume business and recalled that someone of one of these lists was discussing such a prospect that came up in Denver, CO. I am a costume person, not a business person and know absolutely nothing about such purchases. I was wondering if anyone has any knowledge of costume rental/construction businesses or if anyone here owns/runs one and might be able to give me some insight. All I know so far is that the owner wants 30 grand for 2000 costumes and equipment, I assume. Sylvia, The methodology that is normally used for valuing a business is called Valuation. There are many books on the shelves in the business sections of bookstores and biz-schools. You are looking at a business that combines elements of the service industry and retail industries. The inventory sounds like it's primarily comprised of short term durable goods with a relatively long shelf life. One very readable book is _The Darkside of Valuation_ which takes the reader thru a step by step process of valuing Starbucks. The process is the same, irregardless of the size of the business. Some things you'll do: * You'll evaluate current income expenses. You look ahead to see where you can expect sudden or seasonal changes in either and map these out. * You evaluate the discounted cash flow the business produces. * You'll find some comparatives in similar business. While this is harder with private businesses, some business brokers do maintain records certainly keep up with the gossip. * You'll have to estimate future growth (in part this will be based on what you think you can accomplish). Using all of the above you come up with an estimate of the value of this biz. You might even take this valuation with you to the bank to show asset value (and to establish the fact that you did carefully consider the value). This doc will also help if you need the biz itself as collateral for any business loan you may want. (That's much better than offering your house as collateral!) Of the top of my head, I suspect you should get some experience running the storefront and keeping the books of this particular shop to gain some understanding of the business and whether you wish to purchase it. Secondly, you should ask the current owner what method s/he/they used to value the business and evaluation it in against your own work. Next, in an unrelated comment, you might wish to consider an assets-only purchase to reduce business risk from any outstanding warranty, unpaid taxes, loans or debts. If, on the other hand the value of leases and other obligations is better than the current market, then you might want to purchase the whole business. Your best info will come from key reccurring customers and from any major suppliers (perhaps that trucking or shipping company). Make a point of visiting the major creditors such as banking officer, landlord(s) and lienholders. You should probably have the seller introduce you face to face. This should be an overt aboveboard investigation not some cheesy TV private eye routine. Apparently she has done very well in the business over the years. Is there any way to find out what her profits have been? Can I see her tax records? You can see I'm very green about business matters. If the business is public (which i sincerely doubt) then the records are public. If it's privately held, then the only legal way to do it is to ask nicely. If she says no, walk, no run! away from this opportunity with all speed. ...need a lawyer YES! but not til after you do the valuation. I suspect this is either an S-corp or a std corporation. The lawyer will ensure that all the things you purchase end up in your possession. FYI, my MBA is in finance with a valuation emphasis. I'm happy to answer questions. --cin Cynthia Barnes [EMAIL PROTECTED] ___ h-costume mailing list h-costume@mail.indra.com http://mail.indra.com/mailman/listinfo/h-costume
[h-cost] Buying a costume business
I just heard about an opportunity to buy a costume business and recalled that someone of one of these lists was discussing such a prospect that came up in Denver, CO. I am a costume person, not a business person and know absolutely nothing about such purchases. I was wondering if anyone has any knowledge of costume rental/construction businesses or if anyone here owns/runs one and might be able to give me some insight. All I know so far is that the owner wants 30 grand for 2000 costumes and equipment, I assume. Sylvia ___ h-costume mailing list h-costume@mail.indra.com http://mail.indra.com/mailman/listinfo/h-costume
Re: [h-cost] Buying a costume business
I don't know much about the costume business, but in business in general the first thing thing to learn is to never assume. Alway find out 100% and get it in writting. There are a lot of shady people out there. You're going to also want to inspect and document the condition of every costume so that you can reasearch what they're worth. You don't want to end up with one nice costume and 1999 crappy ones. Tania -Original Message- From: Sylvia Rognstad [EMAIL PROTECTED] To: Historical Costume [EMAIL PROTECTED] Cc: [EMAIL PROTECTED] Sent: Sun, 2 Jul 2006 13:50:43 -0600 Subject: [h-cost] Buying a costume business I just heard about an opportunity to buy a costume business and recalled that someone of one of these lists was discussing such a prospect that came up in Denver, CO. I am a costume person, not a business person and know absolutely nothing about such purchases. I was wondering if anyone has any knowledge of costume rental/construction businesses or if anyone here owns/runs one and might be able to give me some insight. All I know so far is that the owner wants 30 grand for 2000 costumes and equipment, I assume. Sylvia ___ h-costume mailing list h-costume@mail.indra.com http://mail.indra.com/mailman/listinfo/h-costume Check out AOL.com today. Breaking news, video search, pictures, email and IM. All on demand. Always Free. ___ h-costume mailing list h-costume@mail.indra.com http://mail.indra.com/mailman/listinfo/h-costume
Re: [h-cost] Buying a costume business Costume design book I read
Someone asked me the title of the book I read on film costuming. It's _Costume Design 101_, by Richard LaMotte, a guy with about 30 years of experience in the Hollywood costume business. There is, as I said before, a great deal of information in this book about how the film costuming profession works, and very little about how to design or build costumes. Then again, there are many other books on the latter. This book might help you/Sylvia to see the rental business from the other end--how film companies use costumes and what they want out of a rental business. We've sold a lot of books to costume rental businesses. As far as I can tell, aside from any filming that may be done locally--and in many localities this is probably not very much or very often--they rent to theater companies, professional, semi-professional, and school; and also to individuals for theme weddings, murder mystery parties, Halloween, and any other event anyone might want a costume for. Some of them even stock costumes for people who want them for their sex lives--French maid costumes and so on. Whoever is rented to, I gather there is a lot of loss and damage. I've been told that for every rental you need a standard contract that makes the renter pay in full for all loss and damage, including total replacement if necessary; and you need to be the one who legally evaluates what has gone wrong and how much to charge for it. Frankly I would not advise getting into any business at all until you know a great deal about how that kind of business works. Fran Lavolta Press http://www.lavoltapress.com Sylvia Rognstad wrote: I just heard about an opportunity to buy a costume business and recalled that someone of one of these lists was discussing such a prospect that came up in Denver, CO. ___ h-costume mailing list h-costume@mail.indra.com http://mail.indra.com/mailman/listinfo/h-costume
Re: [h-cost] Buying a costume business Costume design book I read
Thanks for the info. I really need to know how this woman's business works and aside from just discussing it with her, don't know where else to go.I don't need any info on design or construction. I guess I just need to know if it looks like this can be a profitable business and I dont know where to find that out.Do you think the book you mentioned would help?I know this business doesnt rent to film companies. It sounds like she does some small theatre productions, lots of Halloween, Renaissance, weddings--the full gamut. The one thing that is making it intriguing is that it is in a beautifully scenic location, but that could be a drawback too because of the small town nature of the place. Apparently she has done very well in the business over the years. Is there any way to find out what her profits have been? Can I see her tax records? You can see I'm very green about business matters. On Jul 2, 2006, at 2:32 PM, Lavolta Press wrote: Someone asked me the title of the book I read on film costuming. It's _Costume Design 101_, by Richard LaMotte, a guy with about 30 years of experience in the Hollywood costume business. There is, as I said before, a great deal of information in this book about how the film costuming profession works, and very little about how to design or build costumes. Then again, there are many other books on the latter. This book might help you/Sylvia to see the rental business from the other end--how film companies use costumes and what they want out of a rental business. We've sold a lot of books to costume rental businesses. As far as I can tell, aside from any filming that may be done locally--and in many localities this is probably not very much or very often--they rent to theater companies, professional, semi-professional, and school; and also to individuals for theme weddings, murder mystery parties, Halloween, and any other event anyone might want a costume for. Some of them even stock costumes for people who want them for their sex lives--French maid costumes and so on. Whoever is rented to, I gather there is a lot of loss and damage. I've been told that for every rental you need a standard contract that makes the renter pay in full for all loss and damage, including total replacement if necessary; and you need to be the one who legally evaluates what has gone wrong and how much to charge for it. Frankly I would not advise getting into any business at all until you know a great deal about how that kind of business works. Fran Lavolta Press http://www.lavoltapress.com Sylvia Rognstad wrote: I just heard about an opportunity to buy a costume business and recalled that someone of one of these lists was discussing such a prospect that came up in Denver, CO. ___ h-costume mailing list h-costume@mail.indra.com http://mail.indra.com/mailman/listinfo/h-costume ___ h-costume mailing list h-costume@mail.indra.com http://mail.indra.com/mailman/listinfo/h-costume
Re: [h-cost] Buying a costume business
Thanks for the info. I have a friend who is an accountant I may be able to ask for help, but do I really need a lawyer? On Jul 2, 2006, at 4:49 PM, Kathleen Hanrahan wrote: Sylvia Rognstad wrote: snip All I know so far is that the owner wants 30 grand for 2000 costumes and equipment, I assume. Make sure of these things! Will you get the rights to the company name? Can you take over her lease/take over her space/store front? Can you get her customer list? Will you be able to take over any of her current contracts (building lease/future contracts - weddings, etc.)? Will she tell you about any competition that she has (the costume rental place in the next town/the tuxedo rental place two streets over/the woman in town who makes all of the costumes for the school plays/...)? Would she introduce you to her customers (so that they think kindly of you)? Also what kind of hours does she put in? Can you put in those same hours (or maybe more while you are starting out!)? You would want a copy of her budget (list of expenses/income). How much are her expenses? You have to be able to make more than that to make a go of it. Thanks for the info. I really need to know how this woman's business works and aside from just discussing it with her, don't know where else to go. If you want information about the costume rental business (generally, as opposed to this woman's business that you wish to purchase), ask business owners in this category (costume rentals) that are not in her area (competition!). Tuxedo rental stores (and bridal shops?) may partially fit this bill. snip Apparently she has done very well in the business over the years. Is there any way to find out what her profits have been? Can I see her tax records? Yes, this is the first thing that I would suggest. For ideas on what you should look for (from the business point of view), I'd look at some internet sites: Nolo http://www.nolo.com/ Select Business Human Resources Then select Buying or Selling a Business from the Main Topics There are several articles that seem to give useful information. Also, what about asking her for referrals - business/customers that she deals with. Does she pay her rent on time (implies that her business is doing well)? Were you (a customer) satisfied with your rental? Were your problem(s) with the business/business woman solved? Of course, the official answer is always, Have your lawyer and accountant take a look at whatever you are going to do. ;-) Kathleen a new-to-the-list lurker and a VERY small business (computer-consultant) owner ___ h-costume mailing list h-costume@mail.indra.com http://mail.indra.com/mailman/listinfo/h-costume ___ h-costume mailing list h-costume@mail.indra.com http://mail.indra.com/mailman/listinfo/h-costume
Re: [h-cost] Buying a costume business
Quoting Sylvia Rognstad [EMAIL PROTECTED]: Thanks for the info. I have a friend who is an accountant I may be able to ask for help, but do I really need a lawyer? yes. Believe it or not, the lawyer is probably more critical than the accountant! susan - Susan Farmer [EMAIL PROTECTED] University of Tennessee Department of Ecology and Evolutionary Biology http://www.goldsword.com/sfarmer/Trillium/ ___ h-costume mailing list h-costume@mail.indra.com http://mail.indra.com/mailman/listinfo/h-costume
Re: [h-cost] Buying a costume business
I was afraid someone would say that. With 2 girlfriends who have gone through recent divorces and spent a fortune, I hate to have to deal with lawyers. On Jul 2, 2006, at 5:11 PM, Susan B. Farmer wrote: Quoting Sylvia Rognstad [EMAIL PROTECTED]: Thanks for the info. I have a friend who is an accountant I may be able to ask for help, but do I really need a lawyer? yes. Believe it or not, the lawyer is probably more critical than the accountant! susan - Susan Farmer [EMAIL PROTECTED] University of Tennessee Department of Ecology and Evolutionary Biology http://www.goldsword.com/sfarmer/Trillium/ ___ h-costume mailing list h-costume@mail.indra.com http://mail.indra.com/mailman/listinfo/h-costume ___ h-costume mailing list h-costume@mail.indra.com http://mail.indra.com/mailman/listinfo/h-costume
Re: [h-cost] Buying a costume business
Quoting Sylvia Rognstad [EMAIL PROTECTED]: I was afraid someone would say that. With 2 girlfriends who have gone through recent divorces and spent a fortune, I hate to have to deal with lawyers. on the list for Margo's Patterns, they recently had a similar discussion about sewing for people, lawyers and contracts. Having lawyers and contracts won't keep stuff from happening, but it can help keep molehills from developing into Mt. Everest. If you've got the time, you might want to pop over to the list and 1) check the archives and/or ask your question there. http://groups.yahoo.com/group/MargosPatterns susan - Susan Farmer [EMAIL PROTECTED] University of Tennessee Department of Ecology and Evolutionary Biology http://www.goldsword.com/sfarmer/Trillium/ ___ h-costume mailing list h-costume@mail.indra.com http://mail.indra.com/mailman/listinfo/h-costume
Re: [h-cost] Buying a costume business
In a message dated 7/2/2006 7:03:31 P.M. Eastern Standard Time, [EMAIL PROTECTED] writes: I have a friend who is an accountant I may be able to ask for help, but do I really need a lawyer? Do you fill your own teeth, or go to a dentist? Contract equals lawyer--yes indeed! Maybe this is obvious, but I haven't seen it addressed yet--WHY does the owner want to sell? Bruce Williams, who has a syndicated radio show and wrote the book, In Business for Yourself (not sure if it is still in print, but I recommend it), would always ask people in a similar situation--are you buying a business, or a hobby? In other words, does it really throw off any money? Ann Wass ___ h-costume mailing list h-costume@mail.indra.com http://mail.indra.com/mailman/listinfo/h-costume
