Buying a business

Dh has worked on and off at a very successful sports retailer for 10 years. He has watched it change owners twice. Once because the guy who built it up was retiring and the second bought it as an investment and sold it. The guy who bought it basically drove a 50 plus year old successful business to the ground. It is a seasonally business and we are going into the off season. The guy has about 100k in debt.

Dh wants to buy the store. ILs are well off and are willing to loan 130k interest free to get the business back up and running and through the winter. Even in the worst of times the store profited 100k plus and if the current owner didn't cause this much debt I wouldn't be concerned. Dh runs that store very well. It went down because the owner was spending too much of the profits. In two months the guy spent 70k!

How would you feel about all this?

Re: Buying a business

Do it.

He's been doing it for 10 years, he may as well reap the benefits of it, right?

Re: Buying a business

Definitely not enough information to make a call on this. Also, you need to sit down with a cpa and look over the books together and get the whole picture before you sink any money into any venture.

Re: Buying a business

Re: Buying a business

My parents own a sporting goods business on LI and has since the 1970's. They have their ups and downs but would never recommend owning a similar business. The cyclical nature of it makes them very tight and nervous every winter and so busy that they can't sleep in the summer. They make very good money now but do to the economy crash in the early 2000s, they have a lot of debt (had to take out loans to keep the business afloat) that they are now paying back.

I'm not trying to scare you too much but there is a lot that goes into this business.