Off topic: business opportunities

[CP]

I'm looking into possibly taking over an existing business that makes sub-system kits for old cars (I can't elaborate at this time). I won't have much information when I initially meet with the actual owner, and was hoping I could get some suggestions from the elders and/or small business owners here on how to proceed. I was informed about this opportunity by the owner's accountant through a networking group, and I don't have much information at this time.

I graduated with a small business management degree, so I'm familiar with the appropriate financial documents, general small business operations, how to manage customers, advertising, etc. What I'm not very familiar with is how inventory is handled from a volume and variety standpoint (how much product to have on hand based on monthly sales), how to handle R&D of metal products (most likely sub-contracted out to the existing owner on a part-time basis), and other nuances of keeping a (possibly home-based) business afloat in a small niche market.

During our initial meeting, I am hoping to gain some general knowledge about the business, its sales volume, if it can financially support me year-round, what issues it has suffered in the past, where the owner sees it moving in the future, and why he is looking to move on (I was told retirement).

What are some of the more general, important questions that I should be asking the current owner during our first meeting (assuming he's not just going to turn his books over to me on the first visit)? Any advice is much appreciated.

[Don P]

cy -

Why don't you go ahead and have your meeting. Certainly afterwards you'll have many specific questions to deal with. It's quite difficult to "arm" you w/o knowing much about the business oppty you're investigating.

COM has many senior execs - some retired (like me) and others still active that could potentially help in a face to face setting.

Put out another call after your meeting.

[cfossum]

Cy,
Finding vendors to make metal parts for you is easy, you can always use the existing vendor list for now and look for alternative sources at a later time, at your convenience. I could even help to point you in the right direction.
What I think you should consider is the likelyhood that you will maintain the exising client base. If the product is geared toward one-time puchases, then my point will be invalid. But if the majority of the business is repeat, then you should expect an immediate decline in sales as many folks form a relationship with the sales person or proprietor, rather than with the product. New ownership in a business is good only if the clients didn't like the old owner. Often, people move on when their favorite contact moves on. I witnessed a Harvard graduate buy and take over a small manufacturing firm that I once dealt with. They're all but out of business now, because he doesn't half of what the original grumpy engineer knew. Good luck!
-Carl