Possibly buying a frameshop.....


Grumbler in Training
Aug 26, 2003
Jonesboro, AR
My husband and I have been approached about buying a local frameshop. What should we be looking for as far as 'getting what we're paying for?'. It's not a done deal, but we'd like some insight from others who have been where we are. I've been framing 10 years (this April) and the hubby has been at it for 6 or 7 years. We know how to do the job...it's the business end we're worried about.

Thanks in advance!!
First thing, take the average you'd both like to make (assuming you both will be doing this) and multiply 5x ... if the current shop isn't already pulling down at least the final number in sales then expect a rough road.

If it is doing at least that then look very hard and see if there are any gaps in the bookkeeping.

If the numbers all add up (big IF) take some business courses and get to it.

What you need to do is properly evaluate the business you are thinking of buying. You want to determine whether the business is successful, profitable, has a reputation for good quality and service, a loyal customer base, etc. If you don't feel qualified to make these determinations on your own you may be able to get help from the Small Business Association, or perhaps you have a local branch of SCORE (The Service Corp of Retired Executives- very knowledgeable and eager to help business beginners). I would also have a good accountant look at the business's books to be sure they are accurate. I thought about buying an existing gallery a number of years ago, but determined that their stated sales were pretty far off what they represented to me, and that they were asking too much for the business's "assets".

The evaluation of the business's reputation and quality are somewhat more subjective, but still important. It is often much more difficult to overcome pre-existing problems, than to start from scratch with your own place. (If you don't believe me, just do a Grumble search on posts by Emibub.) This is akin to the difficulty of reframing someone else's work as opposed to framing a piece from scratch.

Also, familiarize yourself with the pros and cons of the business's location. It is all important- Just ask Bob Carter or William Parker.

Good luck with your decision, and let us know how things are going.

:cool: Rick

[ 01-07-2004, 06:53 PM: Message edited by: Rick Granick ]
The business has been around for a number of years. He had a wonderful customer base, but he has fallen on VERY hard times this past year and we know it won't be in our best interest to keep the name. Basically, we're buying his inventory, the saws, the dm press, the van, the customer files, etc. The shop is not in a good location, so we might be looking into a relocation as well. The price he offered is basically what he put into it when he started the shop.
Originally posted by Rick Granick:
It is often much more difficult to overcome pre-existing problems, than to start from scratch with your own place. (If you don't believe me, just do a Grumble search on posts by Emibub.)
Yeah, Rick has that right. :eek: Leave no stone unturned, and then turn it over again just to make sure. You are eons ahead of me though, at least you are asking before the fact not after.

After all I know now if I were able to do it over again I would absolutely start from scratch. Don't be swayed by a cheap price or if they offer to carry the loan for you. It absolutely makes more sense to start from scratch. It will take lots of research and be much more difficult to start from scratch but not nearly as difficult as what you will face if you buy a business that may be failing or is in a bad location or that was so poorly run that you are spending all your efforts undoing all the harm the previous owners did to begin with.

My store didn't even look attractive on the surface, it was a true act of madness. So, dig really deep to see how this place is run.

I can't stress any of this enough. If I am going to be the "Poster girl for bad business decisions" I want to know that people are at least heeding the warning.....

Good luck!
Send to my e-mail address a list of all major pieces of equipment and I will give you a value of them based on their approximate value being sold as used equipment in todays market. What he paid for them is totally irrelevant.

I need

Make, Model, Serial # if there is one, Age, Visual condition.

How old is that inventory? If it hasn't sold for him, why whould it sell for you?

When I bought the store that I had, I bought it from someone else. In retrospect, I would have been way ahead of the game had I just started from scratch. Most of the inventory was old and now 6 years later, I still have some from the previous owner. That isn't to say that I would have had some left from myself either, but......

If you know you have to change the name, I wonder how good the customer list is. How loyal are those customers? Are those customers going to become loyal to you? Why should they give you their loayalty? Especially if they have had problems dealing with the current owner during the last year. Hard times can also mean a decrease in customer base.

I figure I could have started up with about a $10,000 investment for used equipment and fixtures. Maybe you could buy just the equipment. Talk to a sales rep. Ask him/her questions about how much he has been buying. Ask is there is anyone else going out of business that has used equipment. You have been framing for several years. What are your strong points, where are your weaknesses. My weakness was in dealing with the paperwork, promotions, advertising. I love the sales and framing part. Also, there is some depreciation on the equipment, you shouldn't pay him what he paid for it.

I wish I knew then what I know now. I probably would not have purchased an existing business.
Are you doing this privately, or are you going through a professional real estate agent? A professional will have determined the value of the business and set a price accordingly. I would shy away from someone selling a business on their own. I see red flags here. Bad location, hard times, etc.

I think buying a successful business is a good idea. You know what you are buying beforehand, and you have an immediate source of income.

Starting from scratch, or buying a dying business is an uphill battle, or the kiss of death. Many more shops close than survive.

Kathy, please don't let your bad experience leave you so bitter. Years from nowm when you want to retire and have a store to sell, you may wish to eat the advice you are now handing out.
I didn't mean to sound bitter....I'm tired, not bitter. :eek:

edit: Plus...even if this is my flagship store and I open up a whole fleet of Out on a Whim's across North America, including Canada I still would warn others to be very very cautious before signing on that dotted line. I still plan on being successful but the toll has been huge.

[ 01-07-2004, 08:18 PM: Message edited by: Emibub ]
Do your homework and proceed with caution.
Alan has made a generous offer to help you evaluate the value of the equipment.

If you are planning to relocate and change the name then that is probably all that is worth paying for anyway. IMHO
There are so many pitfalls you don't think about or won't even think to think about..... :confused:

What's the store's reputation? If you're getting a customer list of people who don't like the place it's no good.

You've mentioned relocating - what will that cost in addition to buying the business?

Of the exisitng customers, is there one or two "big fish" that account for a large percentage of business? Can you keep them?

Yes, you know framing - do you know business? Marketing, advertising, insurance, equipment maintence, etc are things you also need to know about. Have you looked into buying your own health insurance these day$$$ ?

We bought an existing business last year. We bought lots of good things (good customer base, great reputation), but also bought some not-good things (no advertising for the previous 2 yrs, one client that accounted for about 20% of sales)that we didn't catch. Overall, a mixed bag but something I don't regret. Starting from scratch would have probably killed us by now. Whatever you decide, GOOD LUCK!

You are reading some of the best advice you could ever get on stepping into the framing "puddle". If you want to get your feet wet, do it with some pre-planning and make sure you are getting exactly what you want and not what you "think you can make it into".

1. The customer base is only as good as what you can draw from that list of "potential" customers. If you can do as good a job or better than the present owner, you may stand a chance of keeping some of those customers. I moved my gallery about 20 miles East of where I originally set up shop and I lost most of my existing customers. Not because I all of a sudden got worse at framing but most of them didn't drive to "that town" because there wasn't enough there for shopping for them! That sounds silly but that is a reason that many won't go out of their way to follow you to a new location. And those were MY established customers!

2. Used equipment is just that, used equipment. You can find good used equipment in many other outlets other than buying it along with all the other "baggage" that goes with a frame shop purchase.

3. The inventory is still in the shop. Why hasn't it sold before now? I have inventory in my shop that is left over from years ago when I dealt largely in resale LE prints. They are good prints but they are only worth something if you can find a buyer for them. I have prints by J.D. Challenger, Terry Redlin, Ozz Franca, and many other big name artists that I am sitting on and have no buyers for. They may sell in the Southwest or up North but they are just excess prints that take up space in my flat file here.

4. Don't be tricked into paying thousands of dollars for "good will". That is as close to a scam as any term involved in selling a business. Some include their customer database as "good will" along with the built up "reputation" of the shop. What good is that "reputation" if you move the business?

I spent close to 7 years making trips down to the Gulf coast visiting virtually every town from Gulf Shores, Alabama to Naples, Florida looking for a town to relocate my business. I checked out so many demographics that it would make your head spin! I contacted every C of C, Main Street group, small business group that I could find along with talking to so many hundres business owners and checking out no less than 10 existing art galleries and frame shops that I could find. And my final decision was to start from scratch with opening a new business rather than buying an existing one. Why? Well in addition to all the reasons already mentioned, I thought that I stood as good a chance of making a successful business out of MY knowledge and skills gained from 16 years of framing as I did trying to rebuild an existing business that I had no real idea of what the real underlying reasons were for the sale of that business. Owners are never going to tell you about all the bad points associated with their wanting to sell their business. You will find those out in due time and some of those reasons may shock you.

No matter what you decide to do, base your decision on what you and your husband want for your future as professional framers. Take into consideration that, if the frame shop is going to be your sole source of income, can you and your husband take a year or two of no income or very little income until you get your database built up enough to support the two of you. There would be nothing more depressing for me than to have to take a second job just to make ends meet. And consider this, every day that you have to work another job for enough income to get by on is that many more days that your shop is either operating shorthanded or without one or both of you. And that usually means closing for those days that you are away.

I don't mean to be the harbinger of doom but it requires so much research and effort beforehand to make the right decisions and, even with all the bases covered in your mind, there is still no guarantees that you will make a successful go of it. There is no control over buyers' habits, the economy of any given area, or how the nearby competition will affect your business.

All that considered, if you are sure that this move has potential and you have done your research demographically about how your area would support a new frame shop, then I say don't sit back and 5 years from now wish that you would have just gone ahead and taken the plunge. You have this life to do what you would like to do. There aren't many second chances left today for those who hesitate and then regret passing up the opportunity to get into your own business.

Good luck and don't be afraid to ask all the questions that come to mind here on the Grumble. You will be assured of getting help from those who probably have already been down the road that you are approaching and would be glad to help you get past the various potholes.

One last thought: when I opened my first shop in 1990, I bought all new equipment. I built all new fixtures simply because I had the woodworking talents to do so. I still own all of the equipment that I started out with plus some additional stuff that I bought along the way. If I were to sell my shop tomorrow I would be selling a shop full of 14 year old equipment and fixtures. Granted, it is well maintained equipment and a workbench built as sturdily as mine don't wear out easily but I would NEVER get out of it what I put into it 14 years ago. That is fantasy. Follow your gut instincts and use some common sense when looking at what you are thinking of buying. If you feel that you would be better off going with new equipment and a better location and starting from scratch, you probably will be.

Kathy, Sorry. "Bitter" was probably a bad choice of words, but that is how you sounded to me. The problems you are facing you could be having whether you bought the business you did or started from scratch. I took little from my business the first few years. What I did have left over went back into it. I was fortunate in that I had a husband to support us while I built it up. I know your circumstances are different, but you have put money into your shop this year, so you must be doing something. I'll bet this year you will take something for yourself.

It goes without saying one has to be careful. But what concerns me is I am hearing, and have heard more than once, framers saying they would rather start from scratch. Will your advice be the same when you are ready to retire or move on and have a successful business to sell? I started from scratch and can see the benefits to buying an established business, especially if you cannot wait one or two years (or more) to take a salary. We all have grand ideas when we start out, but it takes time for them to happen.
I agree with what you are saying Pamela. My whole point was to stress the importance of knowing what you are buying and educating yourself on what to look for before you jump in. I did none of those things.....

But yes, if I build an empire and want to sell it off I would want people to find value in what I had built too. Not all existing businesses are bad investments. But, you have to know why they are selling and look under the surface.

I'll only be bitter if I end up in debtors prison or living under a bridge.
Go to the West Coast Art & Frame Show in Las Vegas later this month, and take all the classes you can schedule by MArc & Laurie Bluestone, Bob Carter, and Jay Goltz. Rob Markoff has some good advice, as well.

The cost would be a couple thousand dollars. If that seems like a lot, consider that you might learn enough to double or triple your net profit in the first year or two, which could easily be a difference in six figures.
Thanks for all of the advice, guys! We appreciate the insight and will probably (hopefully) just "start from scratch" later this year.

Thanks a million!!