Adventures with Lyrical: Buying a Business (REPOST)

Shonuff said:

She owns her own metal fabrication company, and is supposed to be influential and wealthy. I have no chance, they say. They've called and made it a point to tell me that. I hate bullies. They've come up to 2.3 after we found that call. We told them we wanted a Court date.

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After all of the BS, and the accusation that we did damage (proven to be false), they agreed to a settlement of $3,200. The sad thing is that I tried to settle for a lower amount a few months ago. I was willing to accept 1,500 and told them that. Then her Lawyer said he was "coming after me" and it all escalated from there. He kept trying to intimidate us. If anyone tries to intimidate me, it makes me go after them harder. So the jackass Lawyer ended up with paying over double what I originally offered, when everyone was being friendly. Good job.

We've been making progress paying down the principal on the business. Only 39k more in extra payments to go. We should get there in the next 60 days. We've been paying the loan off by 2 to 5k a week. I'll be so glad when I'm not being choked by the business loan.

TrollfaceDeux said:

How much did you spend on your lawyer Shonuff

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The job was like 2.2 and lawyer was 1.1. So we forced them to pay our legal fees also. They knew they were screwed, and honestly, had they not tried to intimidate us, would have gotten this cheaper. In business, you can't let anyone intimidate you, no matter how much money or influence they have.

TrollfaceDeux said:

oh yeah, I am moving towards marketing and inventory managerial role for two dealerships. I can't wait to get off the floor...

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Take it from me. A dealership (or any business at all) is most successful when it is strongly branded. When I worked for an automaker, I'd see the dealership that was strongly branded making millions while the other dealership with no branding barely turned a profit. I saw everyone's P&L's.

TrollfaceDeux said:

They will squeeze even more if you do. I get that. People are like dogs. They go after the weakest of the breed.

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And all they did was piss me off to the point where I rejected multiple offers. At one point, I told my wife to tell our Lawyer to tell them to, "turn their offer sideways and stick it up their asses." When she told me that she only told them to "stick it up their asses" I made her call the Lawyer again and say it correctly. They got the point.

TrollfaceDeux said:

Our dealership is postioned right next to some of the most hardcore autogroups. We are like small flies in a big ship. That is why our general manager and I want to take these two dealership to next level.

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So advertise how you do "no-haggle, confrontation free" selling? Tell people how painless it is to shop at your store.

When we did a marketing survey of our customers for the automaker I worked for, fear of buying a car was ranked higher than fear of death. Really.

There's money to be made there, regardless of whether you are confrontation free or not. It's all BS, but people believe it. Hell, the most profitable dealer I knew advertised about how he had the lowest prices. And at the same time, his salespeople were high fiving each other in the break room about how they ripped someone a new one on their deal. His total gross (new +used + F&I) was much higher than everyone else within 100 miles. Yet, his showroom floor was packed full of people trying to take advantage of him LOL.

I've had people ask me why I didn't try to buy a dealership, rather than do what I am now. I didn't want to do that. I wanted to strike out on my own. But if I owned a dealership, I'd advertise to the moon and back about how we were different than the other dealerships, because we cared about them, are family owned, and all of that BS. Every ad I'd have would hit on this.

If you can't develop a brand identity, you'll continue to be surrounded by larger dealerships that crowd you out.

PM me if you want.

TrollfaceDeux said:

I don't want to do stupid shit like "FAMILY VALUE."

Everyone else does that now.

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They aren't doing it here. You might look at how the other dealerships are around you are branding themselves, and then pick a position they aren't in. The more profitable ones are the ones that advertise wider selection/lowest prices/family value (as you put it). You aren't advertising in a vacuum, so your branding has to be realistic (i.e. advertising wider selection when the dealership down the road has 10,000 vehicles in stock). They will see your ad, look at your lot, and then drive away if they know the other guy has a ton of units.

Another point I'd like to make is that you aren't advertising to yourself. The only thing that matters is what your customer wants to hear. We had a division where it targeted the elderly. We used to call it the Last Time Buyer's Program. We had to market to them, and none of it was anything that appealed to me personally.

TrollfaceDeux said:

Our dealership's greatest strength is price advantage like no other and straightforward service centres for our clients.

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So advertise that.

I got a PM from someone asking me about my goal to buy another two businesses, and how I've progressed.

I have not made much progress on this, as I am actively managing and running bids. I'd like to diversify. But this business needs me. So the next one I buy will be something where it would be more passive. I've looked into hotels as a potential goal next. I was surprised that some of the hotel franchises have a start up cost anywhere from $7-10 million. Assuming 15% down, it's going to take years to save that much. But it would be something where I wouldn't have to have my finger on the pulse all of the time.

sadris said:

I'm assuming you would have to personally guarantee the loan?

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If I have enough assets, hopefully not. Right now, everything is guaranteed by personal assets. It sucks, but when every bank you talk to won't come to the table without it, you don't have any other choice. If you believe in your idea, it's the only way.

The reality is most financially successful people make a "bet the farm decision" two or three times in their lives.

Cad said:

This is true, and being able to take the risk and make those decisions is what separates the rich people from the not-rich.

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There is a reason why it took me 1.5 years to find the right one. And I was doing it full time too...As I said way back when on FOH, I spent a lot of time in due diligence uncovering the seller's lies. One company had good financials, but something didn't "feel" right. I backed out of the deal. A few months later, the broker calls me up and tells me the owner walked in, fired everyone and shuttered the door. The business had a government contract that was 95% of their business. The goverment had the right to back out of the contract at any given time. The government canceled their contract, but they neglected to disclose this. I recall, from the financials, the business was a slam dunk. It was netting 300k with a selling price of 800. If I had pulled the trigger on the sale, I would have been left holding the bag on an 800k loan. The seller knew this.

When I go to buy business #2, they will probably require me to make another "bet the farm decision" and do more guarantees personally, and from this business that will be paid off. And I'll probably only guarantee one or the other (if possible).