buying guitar shops

Moss

Probably Macari's

Snap

I would hate to be in retail, of any form. I imagine it is hugely stressful and very hard work, unless you have something very different to sell.

THe other thing I would hate to do is run either a pub or a restaurant/cafe. Long hard hours and you have to sell a lot of stuff to make a good living, becouase what you are selling is low cost.

jpfamps

Buy a flat in London. Rent it out. You'll make more money.

Rental returns are actually pretty poor in London as a percentage of capital investment, so many "investors" are relying on capital growth, which I would consider to be risky in the current economic environment.

capo4th

Buy a Ferrari

jpfamps

samzadgan said:

Snap said:

that's a sizeable range - 200-500k. So, profit on 200k is what? 10k?? Profit of 50k is not worth it. 10% margin? no chance. Slightest whiff of trouble and at that rate, you are quickly in debt.

I wouldn't go near any business unless you margin is at least 35%

ToneControl - profit, broadly, is what's left in your hand after all your costs, which includes wages, for everyone. The owner may in fact not be salaried or salaried very low, but that would be amongst your first questions. If the stated profit doesn't include owner pay, then in reality it will be naff all (profit), making the busines worth sweet FA.

That's what you have to watch in these valuations - what's the actual true profit, and what's the multiple (on the profit) that's driving the valuation. On a retail business, that multiple shold possibly be as low as 3 or 5, never 10.

Turnover is largely irrelevant. You're looking a) for decent profit, and b) steady reasonable turnowver, as obviously it drives a), but without good profit, you are stuffed regardless.You wil be floggin a dead and expensive horse

yeah multiple of 10 is absolute bullshit for a retail business in an industry thats in decline.

and when you get down to 3x you're basically running a marginal business...and at that point the business becomes a complete nightmare to run and becomes nothing but stress...all the fun of being surrounded by guitars all day is gone when you are so close to shutting down every day.

I think you've summed up running a guitar shop very accurately.

The essential problem is that the margins on retailing guitars, amps etc are very small when compared with other retailers, eg fashion.

You are lucky on most popular brand to be getting a 33% mark up, and even this is being eroded by the internet sellers. The margins on recording gear are often even lower.

ToneControl

jpfamps said:

Buy a flat in London. Rent it out. You'll make more money.

Rental returns are actually pretty poor in London as a percentage of capital investment, so many "investors" are relying on capital growth, which I would consider to be risky in the current economic environment.

Liverpool is a better place to invest

iseverynamegone

Retail is awful. You have to pretend to like the public. Just Awful.

ToneControl

iseverynamegone said:

Retail is awful. You have to pretend to like the public. Just Awful.

just imagine being a GP

iseverynamegone

It's bad enough having to stand near the other parents at school when I pick my daughter up tbh TC .

Whine whine whine.

ToneControl

I watched the GP documentary on TV yesterday. Made me glad I avoided medicine at Uni. 

IT, all is forgiven

iseverynamegone

That's some serious forgiveness right there. I fucking T :-)

The wife is a chiropodist . To be honest most of the patients are old so that's ok, older people are ok.