Buy a carpet store for sale or start one?

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Buy a carpet store for sale or start one?

1/28/2008 - by: Acquireo Team - Director of Marketing, Acquireo.com

In the rug and carpet business the store and the showroom for displaying the carpeting is essential to making the sales. Smaller samples can be carried into the home, but seeing the carpeting in a larger section makes a bigger impression. For a person to get into this business this should be a serious consideration. It would be possible to start out with just a sample case, but the business will grow faster once the showroom and a permanent location is in place. A buyer in this type of business can go the franchise route or be a supplier of different brands of carpets or rugs. The franchise store will have some restrictions on what products can be sold in the store. A business that represents many different product lines has no such restrictions. It is up to the storeowner which carpet companies are represented to the store’s customers.

Location of the store is helped by being in a center or strip mall or on the corner of a busy intersection. It is preferred, but not absolutely essential as it is in other types of businesses. This is a niche market and people who are in the market for replacement carpeting or furnishing a new house will seek out those businesses that are convenient to them. Carrying brand name carpeting will help as these names can be displayed in the ads for the company in both print and media advertising. Having excellent sales people working for the business also easily influences this business. Hiring experienced people or building a solid training program will help to fill this important part of the business. It also would be wise to have in house financing for those people who cannot pay cash for their purchase.

Buyers who are looking for an existing business to buy can find listings of businesses that are for sale and business brokers on www.acquireo.com. This source can give a buyer a feel for what is available in this business market. Contacting business brokers will also help in gathering information as to the businesses that are for sale in a specific geographical area.

Giving carpet-cleaning companies a finder’s fee for recommending your company can lead to some very motivated clients. It is possible that they will run across customers that need to have their carpet replaced and just not cleaned. It would not hurt to cultivate owners of these businesses in your area.

Finding the motivated seller of a carpet business

Local business brokers may have such listings and the Internet will have many more. A buyer may need to expand the idea a little as many of the businesses that are for sale are multi-flooring businesses and not just limited to carpeting.

The reason that the sale is being offered is a strong indication of a good deal or a risky deal. Legitimate reasons to sell the business are the selling party is older or the heir of a deceased owner. These sellers are usually very motivated to make a deal and may even be willing to take payments for part of the purchase price. Poor health can also be a consideration by the seller to want to let go of a successful business. All of these reasons are factors that could make the sale more favorable to the buyer.

Long standing in the community also helps to make the deal a better one for the buyer as people are likely to know of the business and its reputation. These are just some of the first reasons to look at a business that comes to your attention.

Obviously the financials of the business will need to be studied for trends. A yearly increase in business is a very good sign in a profitable business. If the sales have been dropping the reason must be ferreted out. It could be something as simple as the top sales people left the company or retired. It also could mean that there is a new competitor in town that is getting the business.

The business broker who is handling the sale will sometimes have all of the answers to your questions. But it is still a good idea to look at the deal very carefully yourself. Questions like the lease assumption, when will the rent negotiations be open again or repairs on the building that is part of the sale. Again these are serious questions that must be made clear to the buyer.

If the price is very high, places to find the money

Lenders in business buying can be approached to see if they would consider your deal. Some angel groups will help put a deal together if they feel it is a solid investment. Partnership arrangements of short or long duration can be put in place to get the money. And as a final place to get the funds, the old owner may be willing to take a payment deal if the down payment is high enough. While finding the deal, you should also be exploring how you will come up with all of the funds needed, if you do not already have them available.

Conclusions

This business of selling carpet, rugs and other flooring is a high capital venture. It is not likely you could do such a business out of your garage. You may be able to work a deal with an existing owner to work your way into an ownership position. You could also lead a partnership group into a profitable situation if you know people with investment money.

A high growth area would be a natural for rapid increase of sales and a superb business opportunity. Sales is the name of the game in this business and a staff of sales people who can make it happen is the best way to grow fast. You will need to have one or more top sales people working for you in the business. People will stop by to look, but they must be sold in order to do business with them. A walk-in is an opportunity not a sure sale.


author: Acquireo Team

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