Advice on situation

Re: [spiers] Advice on situation


In a message dated 11/22/03 8:55:51 PM, MisterKJL@aol.com writes:
I'd like your advice on my situation:


My wife inherited an import business from her father 6 months ago. We hired
someone who was unemployed to help run it and now he no longer desires to
continue. (He prefers a 9-5 job than being an entrepenuer)

***Sorry to hear you lost a father-in-law.***


The business imports restaurant goods from Asia, warehouses them and sells &
distributes them throughout CA. Small player in a field of three domninant
players. We do have an established customer and supplier list. At its prime,
the business grossed over $360k a year (net $60k), but my father in law was
stricken with cancer a couple years ago and now the business gross around $8k a
month (down to 5 major customers from 20).


Our original thought was to try to build the business back and then some,
while we both continued our own professions. My wife and I are not sure what to
do with this business at this point.


1) liquidte the inventory?

2) sell the business outright?

3) hire someone else to run it?


What are your thoughts in this situation?

***Liquidation will not get you much, and there may be some tax implications
on the inheritance,,, you ought to check out that angle. Your father in law,
was actually the business, those relationships, etc... when one considers any
price you'd consider reasonable they'd probably find starting their own biz
cheaper. Your numbers suggests the biz nets 16%, at the new sales level of
$96,000 you'd be able to pay someone $15,000 per year if you gave them all the
net. One can make more money being unemployed.
the only thing I can think of is if one of you had a passion for restaurant
supply biz, then quit your job and build it back up. Research what happens
when a family goes from double income from jobs as employees to one income as an
employee and another income as an entrepreneur. Your accountant can model
some scenarios for you. You may be surprised at how much less household income
can actually end up as a better standard of living, what with write-offs,
etc.***

John

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