James and Nicky state that their experience and assistance from the SBDC made all the difference in the success or failure of their endeavor. James and Nicky first visited the NEC SBDC at Yuba College in February of 2011 as they were interested in purchasing an existing old time retail operation in Marysville. To do so would require start up information and possible funding.
The Davis’s have an extensive background as a hobby, in the quilting and sewing field so were sure that they understood the business operations. However, after meeting with the SBDC consultant and starting their business plan, they learned that obtaining useful information from the owners was going to be difficult. They also planned to immediately change the name and move the store to a new location.
During the business plan stages, the SBDC counselor suggested they consider not making immediate name and location changes, but to do all they could to learn who their target clients are and what their needs and desires were. In addition, the price the sellers were asking could not justify the investment and would not help in obtaining a loan.
James and Nicky were very persistent and diligently worked on the business plan while trying to get up to date financial performance figures. In March, the sellers decided that they were ready to retire and were open to an offer. While the inventory value was listed at $93,000 plus other fixtures, etc added to the value, the continued losses over the past couple of years did not justify this asking price. The buyers offered $59,000 with the owner carrying back some of the loan until the new owners could generate some sales.
The SBDC was instrumental in suggesting what to include in the Sale and Purchase Agreement and the loan structuring of the business. The Davis’s are still looking to obtain a loan to pay off a personal loan obtained to buy the business and have paid off the sellers note from the $33,000 in sales generated in the first few weeks of business.
The SBDC Director says that this is a good example of a client having a goal and then dedicating the time and effort required to making it happen. All of the things they wished for changed in the process, but they remained willing to listen and especially observe. The Davis’s made all the right decisions and are now the owners of this fun and exciting business. Customers who had stopped going to the business are now returning and loving the new attitude, materials, trainings and more.
Serving Alpine, Amador, Butte, Calaveras, Colusa, El Dorado, Glenn, Lake, Lassen, Modoc, Nevada, Placer, Plumas, Sacramento, San Joaquin, Shasta, Sierra, Siskiyou, Sutter, Tehama, Trinity, Yolo, and Yuba counties