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Opening Record Store

Looking for advice from my fellow audiogoners...I have the potential to move into a store front that is already being operated as a record store (lps only) and become the new shop proprieter/owner. The owner has offered me the space (rediculously cheap rent) in a good area of town. He has had his store for about 5 years now and has a steady customer base. He will be taking all of his inventory and record storage bins that were in the store.He has a web site set up already and signs out front indicating the name of the shop...I plan on rebranding the shop with name change and interior upgrades. It is not a large space maybe 800-1000 square feet. I have a rather large inventory of my own so my up front investment of vinyl would be minimal. The owner wants me to buy him out..basically give cash in return for his customer base and the potential to get my hands on pretty good collections. I am trying to come up with a fair valuation of something like this and I am looking for advice..What do you think something like this is worth? Thank you in advance.
fromunda
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amg56
887 posts
 
My advice is to carry out DUE DILIGENCE!

How many stock items are in the store? Will it attract enough turnover?

Could you put stock online or on Discogs?
🇦🇺
orgillian197
119 posts
 
I don’t understand why you’d need to pay anything.
If you're changing the name, there will be no follow
through whether you pay him or not.
Does he own the building? If so then pay him rent.
If he doesn’t, cut a deal with the real owner of it.
Then you are looking at paying $10k for good will
and a customer list. If you can rent that location,
or one close by, his old customer base will find you
without you needing to spend $$ as he is no longer
in business in that area.
oceanblu
13 posts
 
He is going to be your direct competitor. He is only leasing space he doesn't want or need. Reach out to the owners of the successful YouTube channel and record store spinmeroundstore or Noble Records another great YouTube / record store and seek their advice on what it takes. Have enough capital to pay 6 months rent, utilities and liability insurance with out any income. Wish you the best.
musikhead52
5 posts
 
I am not a business person but have a good friend that is, and has sold businesses before.  She has told me there is a formula (there is probably more than one) based on the business's annual income, of which you pay a percentage as a purchase price of the business.  I understand that having a written business plan is a must and I would agree that it would be wise to seek professional assistance from someone who knows business.  Also, check out the term "blue sky" and how it applies to a business's clientele.  This in itself could be a vital consideration.

On the other hand, it is well-known that one of the greatest obstacles to making a dream come true, are the people in your life that tell you, "you can't do it."  Maybe with the right prep, accurate knowledge, and operating on reason rather than emotion, maybe you CAN  do it.  

Good luck!

MuiskHEAD
musikhead52
5 posts
 
I mean, Musikhead.
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