Consignment business for $62,500??

i'm wondering if this is a good price for a consignment business. comes with everything in the store. it's $62,500 OBO. turn-key operation- what is this? i wouldn't be the one buying it- don't worry. it's in a small town. wouldn't it take forever to get this money back in a consignment shop? it's all clothing w/ some jewelry and accessories. thanks for your expertise!

It all depends.

What is included in the price? At that figure, it most likely doesn't include a building, but can you assume an existing lease?

What you need to see is 3 to 5 (preferably 5) years of the owners Schedule C tax form. That is the form that the business reports its sales, expenses, and profit from the business. That will tell all. Do not fall for the "well, this is what's on the books, but it really brings in a lot more money" baloney. If it's not on the books (or tax records) no bank will believe it, nor should you.

That being done, you will know historical sales, costs, and profits of the business and will be able to decide if it makes sense to pursue.

The first question to ask the owner is why are they really selling. It probably because there is no market for that type of business in a small town.

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