might make a move... need some advice.

hey guys ive been trying to find the right place for sale now for sometime. Ive found one that I think is pretty good, just want some advice being this will be my first store. (been doing this for 12 yrs . Im 24) Place is located in north NJ Bergen county, it was completely refurbished 20 months ago and is very clean. 1200 sq ft store in small mall with 3 other stores. They are asking $119,000 their annual sales are 260,000 as of now. avg 5k a wk. the rent is 3200 as of now. and they are showing a yearly profit of 75,000, i need to confirm if that is owners salary or still minus payroll because they only show a wkly payroll of 600. just wondering what would be a suitable offer to make on this place?

Something sounds very, very wrong with those numbers. A place doing $260,000 per year dropping almost 30% to the bottom line? A 12% labor rate?

i dont completely understand this sheet i have. I need to confirm with the broker. it says
annual sales 260k
cost of goods sold 65k
gross pofit 195k
payroll 52k
payrol taxs 5k
c.c 1k
linen 1200
advertising 1500
liscense’s 200
phone tv 1600
professionals 500
office expense 200
insurance 2300
utilitys 12k
maint 1000
rent 39600
misc 2k

total expense 120k
profit 75k

it shows cook 300 a wk
delivery 200 a wk
counter help 100 wk

i believe the owner is working everyday

Ask for the tax returns sales tax and corp or personal. I agree. Stores doing 260K and paying that much rent dont make 75K


Two things I am wondering about. You say that the current rent is $3200 a month. By any chance does the owner of this pizza joint own the strip mall also? The other thing like others have questioned… the numbers just do not add up correctly. I am wondering how much “cash” business this guy is doing under the table. I do not see how it would be possible to do $600 a week in wages for 3 employees. The numbers seem made up. A perfect 20% for wages… 25% for COGS… utilities at $1000 a month… it all just looks very fake. Be very careful and investigate this one a whole lot further than you have. Good luck.

Even if the numbers are right, its way over priced. The only way those labor numbers could work is if the owner is working open to close every day. You could go get one or two jobs and make the same money “without” having to put any money down, or be on the hook for a lease. If you are going to put that kind of money at risk you need a proper return “without” you figured in the labor.

Something else to think about. You need to think about worst case scenarios. If sales go south, you have to figure you can pick up the slack. If you go into such a deal already figured into picking up the slack what are you going to do???

I want his cc processor and linen service, and 200 a month for insurance to include delivery? wow I am getting hosed then.
I would ask to spend a week in the store without a doubt, and yes lets see the tax reports and I would talk to all vendors involved, it just seems fake (to exact) also you have 3 part time employees?
assuming minimum wage at 7.35 you have one cook working right at 40 hrs (good luck finding a minimum wage for that job) driver just one? really on a friday… and a counter person working about 12 hours a week?
This guy sure gets a lot accomplished with that

Assuming this guy runs his place like 90% of the world. His tax returns are bs.I probably live 10 mins from this store. I can tell you right now. This guy is not making any money. while killing himself working.

1- if your doing 1/4 of a million. Your restaurant is worth 75,000 max.
2- " you need 2.5 for every 1,000 you make"-pizza2007. you avg $500.00 on slower days and 1100-1200 on busier ones. your labor figure is way off.It is not cheap around here.
3- No taxes? school or county?no water bill? Very low utlities for this area.food cost under 25%? not in the tri state area.

I’d start the action @ 50,000. You may end up at 60-65K. good luck.

same road block every time i find a store… i think im going to see about going to work there for a week and see what the cash flow is… they are hiring and dont know who i am… works in my favor

It seems a little off to me, but very close to my situation. If it’s a small store, even with small volume (we’re the smallest shop in town). If it’s set up correctly and run efficiently, your break even point can be very, very low. A very simple solution is to ask for vendor receipts and an inventory list for the last 6 months. That is going to tell you more than any other document you could request. You just can’t fake that, if the cost of sales is to low, he has another vendor he’s not telling out about and isn’t doing the volume he claims. If it’s to high, then he’s faking sales numbers and isn’t selling as much as he claims. I think vendor receipts are the most important document you can get, plus, they should be able to present them to you in less than 5 minutes if they’re a legitimate business.

If I was pulling $75K at my place, I wouldn’t put it up for sale. I’d hire some decent replacements, take $30K to never have to go into the store again and start a new gig. That’s just me though.


You can investigate this offer by watching the store for several weeks. The sheet the broker gave you is completely fictional, imo. Does anyone on this board do $250K/yr sales??? If so, do your numbers match up with the broker’s sheet?

For me, costs and percentage’s really drop with VOLUME! $250K is not volume, and at lower volume, percentages RISE. The broker probably just read somewhere what stores do, and then wrote ideal percentages in.

At any rate, pay attention to this. DO NOT PAY $100K just to work 365 days a year at $2.00/hr if you’re lucky! You can pay me $50K, keep $50K, and I’ll quadruple that $2/hr pay and give you some time off & vacation!!!

Good luck!

My break even point is a little lower than that. My mortgage payment is really high for our space, but I’m paying it off in 10 years. It’s still nowhere near the 3200 this store is paying. Payroll is way to low too, I see no way of keeping payroll that low and doing 5K in business. That’s only 80 hours a week of payroll at minimum wage, I’m lucky if I can get away with that just for Friday and Saturday.

COGS is at 40%, that’s way to high. The rest of it looks right on for what I do with my store. I spend a lot more on marketing though.