I am the dad of the 25 yr old son who wants to buy a sausage shop in Alberta Canada. Son has been doing retail meat for 2.5 years & full butcher plant for 4.5 (40% kill floor, 45% cut & wrap, 15% sausage - sausage in the last 6 months only) but loves the meat industry & his heart really likes it. Existing owner health is failing, and people drive hours to get"his" products. Existing owner closing shop in 6 weeks regardless if sold or not - hopefully we can negotiate that a bit longer before he leaves. We would appreciate all advise from the experienced ones as to how to do a smooth transition and not loose to many clients because 'the magic sausage maker' in the back - isnt in the back... it is the new kid & his wife taking over. This is a deli & sausage making facility, 3 person shop. Old owner has a couple famous recipes. I am sure we will have several threads going in the next few days in regards to the purchase of this plant & your (experienced!) opinions are highly valued.
Are you buying the Business? The Business and it's assets? Just the Building?
Not sure if you know or not so I am going to post like you don't so don't be offended if you do.
When you buy a business like this you have to make sure of everything that is included in the sale. Are you getting those famous sausage recipes? Are you getting his customer list? Are you just getting the building and the equipment?
You need to include your offer a clause that the current owner stays own to help with transition and teaching of his famous recipes
I would recommend a scale back version where the current owner scales back his time over a 8-12 month period or until your son and his wife get it down to where they don't need him
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Joe Parajecki
Operations Manager/ Partner
Kettle Range Meat Company, Milwaukee WI
Member Meat Cutter Hall of Fame and The Butcher's Guild
have an outside accountant look at his books, financial info and especially both business and personal tax returns for the past .3-5 years. Remember when you look at the bottom line to factor in your cost of of buying the business and assets as the previous owner would not show that expense on his financials..Also if you hire outside help do not forget workmans comp. and tax implications. My brother once bo ught a butchershop from an oldtimer many years ago and it turned out that the owner cooked the books and kept 2 sets of books claiming that he was making much more than he was. My brother struggled for 7 years before he had to close and go back to work at a chain store. wrting I am not trying to scare you, but you must do your due dilegence before you commit to the deal.. I agree that the current owner should stay on for a while to show his customers that he has confidence in your ability to carry on his successful legacy . This must be in writing as part of the contract. You will need to hire a business attorney familiar with puchase contracts to do this. DO NOT BE PENNY WISE AND DOLLAR FOOLISH IN THIS ASPECT!! It wll cost much more to undo and pursue a lousy contract than to have a great one in the beginning. Good luck and keep us informed on your progress...DON
So much meat business seems to be happening around there. I might relocate to that area myself. Good luck.
Make everything the best it can be, sell it at a fair price and still make a good profit. Treat everyone like they're your dying grandmother. Employees customes and vendors are all on your team.
Big Beef made an excellent suggestion. Ask the current owner to stay on as a mentor temporarily. Learn everything u can from him! Spend as much time as possible with him in the shop even before the buy out is complete. Get to know the customers while he's still there! The custom meat plant I worked in until recently is for sale. Prospective buyers have come in to observe and even get their hands dirty. Without working with Gary and learning about his customers first hand, that plant may be on its way to closing. U must find a way to get to know the customers NOW! Without them, no amount of marketing will do u any good.
