Buying a surfshop?

Any advice about buying an existing shop? It’s on the Atlantic north of New York. It’s less than a new car. Thanks

Don’t! Treat the place like the plague and run for the hills!! Even better still, just take your money and burn it, it will cost you less…

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Any advice about buying an existing shop? It’s on the Atlantic north of New York. It’s less than a new car. Thanks

[Does it come with glassing racks and permits? A CNC shaping machine? Shaping Bays? Sanding room?]

No shaping, glassing or any permits of the sort, but I would like to shape boards (on the downlow of course) in the basement. I know retail to be quite tricky ie: big trouble, but figured someone here would have some advice. I hope i'm not barking up the wrong tree here. Thanks.

Are you talking about a factory or a retail surfshop?

Be sure you get numbers on what the business has done, esp. in the recent past. The economic downturn has been brutal on retail operations that are posting terrible numbers this year. Most the guys in the industry that make boards are doing 10% of the business they did in past years.

If it is a retail shop and you are really keen on doing it, try to diversify your offering in a way that will stimulate foot traffic to come into your store. If the shop previously only had surfboards, gear and clothing, think about how you can stimulate the business.

This could mean the addition of rentals if you are near the beach and the only one doing so, or perhaps you have extra space or existing space that isn’t producing a healthy income per square foot of that particular space. You might be better served by opening up a Natural foods cafe offering soups and sandwiches or smoothies and protein drinks in that spot of the store, or a coffee bar or fish taco stand…you could dress it up as a grass shack and do it in a 10x10 ft space. You might look around your area, have the space and morph it into a surfshop, juice and/or coffee bar, video rental.

The possiblilities can be endless…think outside of the box. I once went to a place in Marin that the owner of a laundromat took the building next door to him, knocked a hole through the wall and opening an adjacent bar. People would stick their clothes in the washer or dryer and go have a drink while visiting with other locals. It worked.

It would be a good idea to offer repair service through the business. Why? Because it offers a valuable service to your customer while guaranteeing two visits (drop & p/u) exposing customers to your offering.

Yes the economy is soft, rather frightening really, but if everyone is afraid of pushing on and making businesses happen, the economy will only remain in its current condition.

Rewards favor the brave.

Entrepeneur in French translates to ‘risk taker’. It’s up to you to decide if you are willing. Oh! What are my credentials in advising you? I started my first retail surfshop in 1970 when I was still in high school. After 2 years and great sales we wet under due to inexperience and an irresponsible partner. Then after going on some surf adventures to Central AmericaI returned and was hired by a local surf shop (Surf n Wear in Santa Barbara). I quickly went up the ladder and became the GM and buyer as well as created advertising and directed all vital operations. I expanded that operation from one store into a chain of stores. Then after a break and more surfari, Pat O’neill asked me to interview with his dad, Jack and I managed O’neill’s Surfshop which had had 7 managers in the year and a half previous to my arrival. I analyzed what difficulties the business was having, redesigned many aspects both physically and operationally, and subsequently exceeded 20 of 22 monthly sales projections they had layed out for me to meet. One of them by as much as 48%, which blew them away.

I then left, learned to windsurf, tooled around as a beach bum, surfed my brains out, and continued down the road of life.

Cool, Do it!!!

Then you can give us all the bro deals!

Here's the benefits of owning your own shop:

1) You can buy inventory....that you own!! No returns to the manufacturer, you buy it, you own it...Fantastic!! when it doesn't sell, or you picked the wrong line of clothing for the fall season, you can mark it down and sell it real cheap.......Just like TJ Maxx!!

2) You get to hire punks that don't know shit about life, work  ethic, or surfing for that matter....but think they do. Combine that with the young kid attitude and there fantastic ability to steal you blind when you turn your back, and your living the dream man....living the dream!

3) You get to work long hours. And the best sales hours are when everybody else of off work, i.e., Sat, Sun, evenings etc.  and don't forget about the holidays, especially Christmas eve.Fantastic!!  Plus being the bossman, you get to be there everyday...all day!  If you are too skinny, just think about all the opportunity to add that "fighting weight" back on!  Walking across the parking lot to go hit the Popeyes Fried Chicken for a fast lunch of solid grease....But remember the fast lunch part or section 2 (see above) will hit you in the the cash register, or wetsuits will walk out the back door.

4) if you wanted to be single, or remain single then this is the perfect job because if you want to go on a date or see your wife and kids......refer back to section 3.  Nothing makes a woman happier than having a absent man around the house.

5) Maybe after 3-5 years you'll have someone that you can trust to become your shop manager, just to have them leave for college or some far off exotic surf spot on 2 days notice. usually happens around the holidays....surfers get warm water sick and need to travel to warm locations around November 30th.

 

Stay away from the surf industry. One of the most widely respected surf shops in San Diego is Mitch's Surf Shop.  Mitch is there everyday.  Mitch likes to go fishing & sometimes surfing on his days off....Mitch hasn't been fishing or surfing all year.

At the price you're talking about you are just paying ror the iventory and some of the build out.  Unless there's something else, it's probably that price because its not making money and the owner just wants out.  A good business normally sells at 3x profit.  Since you're mainly buying the inventory, check out it really good, make sure its in good shape, current season for clothing, ect.  Check it out during different times of the day, with no ac a place can get so hot no one will shop there, random things like that.  You might want to sit out side all day and watch it on a weekend.  See how the traffic is.  You also have to find out what's paid for and what is not.  Could be alot of unpaid inventory there.  Is the landlord cool?  Might not like signs, loud music, ect.

Running your own business can be amazing.  There's nothing else like it.  Its risky and alot of work but you're in control.  This biz doesn't sound like you can walk in and just keep the door open.  Its going to need new ideas and stratagies to make it.  If you have the right ideas and enjoy the work than do it. 

VPravada is right. It’s smart to get a feel for the business. Hanging out on a week end doesn’t cost you any investment but time. As far as what I said about numbers…they don’t lie unless the books are cooked up to look good, and the only way to counter false statements is to require tax returns that coincide with the numbers claimed for the business.

The inventory may be ‘perishable’ meaning it becomes dated and has to be drastically marked down after sitting for X amont of time or even purged. I was fortunate enough to be a very gifted buyer throughout the 70’s which led to increased sales for the operations I worked for. I also learned that ALL BUSINESS IS NEGOTIABLE, and in our current economic climate, that is more true today than ever. 

It is important to be cognizant to the fact that it is a different time now, and the internet has drastically impacted brick and mortar stores.Back in the 70’s and 80’s, our ‘lifestyle’ related products were predominantly sold in specialty shops back like surfshops, ski shops, and the like…now days corporate conglomerates have caught up; fashion and social trends are spotted in a nano second, branded, manipulated, exhausted and it’s on to the next.

In today’s societies, no stone has been left unturned in order to make a buck. From Pac Sun to E Bay, to Craigs List to the Pennysaver to countless internet sites. From Sham Wow to Oxy Clean to Diamonds to Surfboards. Hock it.

No doubt you already get it that working for yourself has its pros and cons. But where I’m sitting (California) there are 12% of the populace out of a job with many more threatened. Then you have many more people that are making less than 50K per year working long hours amassing no savings while taking a lot of sh-t off some higher up flunky that doesn’t know their ass from a hole in the ground.

The story about Mitch’s may well be true, but if you don’t try you don’t get. It’s up to you to decide if you want to carve your own path or be a self defeatest and sit on your hands.  I personally would rather try something and fail, than to wonder what could have been my entire life.

Can’t never did nuthin…we learn from our failures not our successes.

 

Many here have been down the path you contemplate.  (me too)     Most would probably advise against it.  (me too)     That being said, following ones dream can be rewarding in many other ways.      I always disliked that the surfboard market seemed to be driven by the desires of uninformed 15 yr olds, following fashion/magazines/peer groups.   Not a sound base for a business, IMO.    Good luck to you, if that is what you choose.

I agree with BT wholeheartedly. Both of us have been around the block many times.

There is a real lure to be in business for yourself. Most Americans dream of having their own business and being successful. So much so that studies indicate that at least 1 in 3 try some sort of business for themselves whether it be like what you are considering or Amway, Avon, Krispy Creme, Aflac, or a  franchised business.

I think you get the message here: don’t go into it starry eyed or thinking you will be able to support a family. Also don’t forget there are more millionaires in America, Russia and other countries than ever before.

 

P.S. If the current owner is attributing a lot of the purchase price to “goodwill” aka established customer patronage, the figures should reflect this. The questions you have to ask is “how many years at this location?” “How many years in business overall”? “Same type of business or a complete switch”? And again…tax returns. Numbers tell the story better than anything.

Aloha belch,

Good advice given here so far from those who have been there and done that whether in surf business or other.  Bottom line: NEVER MAKE A BUSINESS DECISION BASED ON EMOTION.  Take a careful inventory of your personal life, project ahead five years, and ask if this will take you there.  "If you don't know where you're going any road will take you there".  jConversely, "Behold the turtle, for he makes no progress unless his neck is out".

Enjoy the ride!

richard mccormick

on the downlow means even you are confused if your shaping down there.

Any bad riding boards will be blessed with threats and blackmail overthe legality of your shaping bay.

 

No one should attempt business unless they’ve been thinking about it for a few years.

You never passed us any numbers as to gross, taxes paid, etc…which most definetly implies

that you are at least a few years away for sensibly attempting any business venture.

 

 

Belch I own a shop, and can't answer this one for you.

I've been in business for 17 years and have had probably 8 or 10 weekends off during this time.

I have worked every holiday including Christmas for the last 17 years.

Good employees eventually get better offers, bad employees linger forever.

My product turns up at department stores and sales reps shrug their shoulders and blame corporate.

I could list negatives forever.

Am I happy I own the shop? Yes. Do I enjoy the work? Yes

A few questions

Why would you buy an existing shop?

Why not start one yourself?

Does the purchase price include Real Estate?

What accounts does this shop have?

What other shops are in the area and what accounts do they have?

Surf Shop = Hobby

I have a surf shop. But I also have a real business too.

In my case I took a totally different approach.

As far as products, either we make it or we go to Hawaii and get it. This gives us a couple of things that make us different from every other shop. I know that the products I sell won’t be discounted right after the Fourth of July by every other shop in the area. Also I know that my products won’t be at the stores out at the mall. Also I get to take a business trip to Hawaii whenever I feel like it.

We also have a web presence and do a good portion of our business there. Many of our products are only available at our store or our website or a few very carefully selected retailers.

I think having a small surf shop today selling the brands is a tricky situation. If you are in a good location the chances are that one of the brands will open a company store near you to compete with you. If they don’t then maybe one of the larger surf chains will do it.

It’s tough to be a little guy in this business today.

You say it’s North of NY. What are you going to sell in the winter?

 

 

Geez, Thanks for all the info I knew you guys could provide. A little backround is needed. The shop is owned by a friend of mine who wants to travel the world and surf (who dosen't) He is willing to sell it to me for less than the stock is worth (retail, that is) because he feels I can carry on the legacy of the shop and wants to sell it to someone local who isn't gonna exploit it with junky beach sh!t and crap. That may sound kinda fishy, but our surf community is very tight knit and real family related.

The shop grossed just under $200k last year and is actually up in sales this year. There is very little debt to be carried over, under $5k. Yes, it is a small shop, but the rent is fairly cheap $1500. mo. and is in a great location 2 miles from the beach.

I'm gonna add a smothie/juice bar to help stimulate business, and keep preaching community and family.

Hey Balsa, We surf all year up here, but most of the kooks (paying customers) hibernate. The shop is usually only open weekends Jan thru May. The shop sells the loins share during the summer, I'm an electrician so that means I could/will continue to do that during the off months.  I was at your shop this winter and met your wife, real nice place with a great vibe. My daughter bought a hotrod Ford (matchbox car).

Thanks again to everyone for chiming in, it is helpful to hear others perspectives, especially the cynical types who are most likely burnt out on this stuff , but truly bristling with knowledge. I appreciate all that is passed on and realize that mistakes are to be made and learned from, but who really knows whats lays beyond the unknown road.

Straight to the top of the bottom.

    

 

   

Under those conditions it seems to be low risk. Keep it core and enjoy and keep your real job.

Go for it!

Belch, good luck in whatever you wind up doing with the shop.  I don't have any advice or wisdom to pass on, just a question.  If you were to not shape or glass on the downlow and were doing it legit, what kind of permits would you need?  Does anyone know what kind of trouble a backyarder like myself could get in without proper permits?

 

Ken

I don't think anyone mentioned it in this thread yet, but Doc kind of wrote the book on running a surf shop some time back. It's in the archives...I'd link it but I suck at searching the archives.  Worth the time for you, though. Highly reccomended.

I don’t think you will have any 55 gallon drums of resin and a acetone wash station?

Keep your resin under 5 gallons and your acetone under a gallon and keep it in a fire proof cabinet.

 

What lines are you going to get? If your not getting at least  on of the four Billibong, Quik, Volcom or Hurley as a main line and your in the name brand business, forget it.   If it’s a cool little lifestyle shop and they are selling it to you less than a car, ask yourself why you think you could do better than they did.

 

How old is the inventory?

 

Huge question:  Can you make it if the rent was absolutely free?   Think about that one for awhile, because the mark up is low and things are not retailing for full price right now.  Target is now cool.

 

Surf retail for non established shops is not good at the moment.

 

Owning a shop sounds way more cool than it actually is.  Your dealing with the public and no one is loyal for the most part.

 

I’m also not burned out on it, I love it, but it is what it is at the moment and it’s been that way for awhile. Since you have another job that can pay your bills, you stand a better chance than most.  If you have to make a profit right away forget it.  That’s just good business.   Also…I would fight the urge to start another business inside of a business like a smoothie bar.  One is hard enough. Believe me.      Don’t sign a long term lease right away.  Ask the owner if he will give you a 60 day out clause if your sales don’t hit a certain level and make that level about $100,000 more than the shop  is doing at the moment.  The landlord will not want to lose an tenant.   Don’t personally sign for anything.  Ever.