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BUYING A SMALL BUSINESS

Business For Sale--Wisconsin Chocolate Shop

An overview of a business offering, including price, outlook, financial summary, and the pros and cons of the purchase.
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The Business In an antique-furnished setting, this 72-year-old concern offers 50 kinds of chocolates made in copper kettles, imprinted with antique markers, and cooled on marble tables. The truffles, turtles, and solid-chocolate molds hit the spot in four-star restaurants and upscale stores throughout Wisconsin. Retail sales account for only 42% of revenues, yet little has been done to enhance the richer wholesale end. The quality-conscious owners have limited automation to an enrober that dips handmade centers in chocolate. One full-time employee makes candy and supervises the store, while two part-timers operate the enrober, package the confections, and clean. Sated by the sweet life, the owner is ready for a new regimen.

Financial Summary 1992 1993 1994*
Gross revenues $68,864 $47,385 $53,366

Recast earnings before $23,107 $2,306 $14,612

depreciation, interest, taxes,

and owner compensation *estimated

Price $40,000, including inventory (seller financing possible)

Outlook A few huge manufacturers dominate the $11-billion confectionery industry, but the 2,000 small family-owned candy enterprises (many of them 85-plus years old) escape such challenges as new federal labeling regulations. Until recently, the industry was considered economy-proof -- confections sold well throughout the depression -- but candy manufacturers of all sizes are finally recovering from the bitter aftertaste of a recent economy gone soft as vanilla creams. The Great Lakes area, with its onetime influx of candy-making immigrants, remains the hub of the industry and a strong market. Ingredients for increasing revenues include boosting wholesale business, relocating to a larger town, doing direct-mail marketing, and advertising. Add to the product mix, and a new owner might well enrich this rather small-ticket venture.

Price Rationale Experts agree that the price is reasonable for what is essentially a sale of assets: $20,000 for the turnkey operation, plus the value of inventory. To start from scratch -- equipping and stocking a new shop in an unproven location with no established customer base -- would certainly cost more. Still, for a business in this industry to be considered salable, experts cite benchmark revenues of $300,000.

Pros Melt-in-your-mouth potential. You'll have everything you need, including an excellent reputation in a strong market.

Cons If you can't handle the marketing challenges, ownership will be only semisweet. -- Robina A. Gangemi

Inc. has no stake in the sale of the business featured. The magazine cannot confirm the accuracy of the financial or other information offered by the seller. Inquiries should be directed to First Commerce Business Group, 414-494-3122.

Last updated: Feb 1, 2001




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