Buying a Meat Shop?

Discussion in 'Homesteading Questions' started by Jena, Jun 18, 2004.

  1. Jena

    Jena Well-Known Member

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    I just learned that the meat shop I was going to try to sell chickens too is up for sale. the owner wants to retire.

    Things that make me go Hmmmmm....

    I raise enough beef that I could supply that meat shop myself. I don't have that many hogs at the moment, but I could easily increase production, I have the facilities.

    Wouldn't it be nice to have a total intergrated business? From birth to the dinner plate.

    My little mind is going a million miles an hour.

    I don't know the first thing about cutting meat. How long does it take to learn how to be a butcher? Is there like a butcher test or something?

    I am familiar with the licensing requirements for the business itself.

    I know I can find out all this information. I know this is a thriving business with LOYAL customers. Should I just go talk to the guy and pick his brain? Does that go with buying a business?

    My husband is giving me the evil eye, but he always does that. Heck, I didn't know how to raise a chicken two years ago and I'm selling about 2000 this year so phooey on him. I don't know how to run a meat shop, but I'm gonna find out.

    Jena
     
  2. uncle Will in In.

    uncle Will in In. Well-Known Member Supporter

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    GO GO GO. If you can advertise your meat as being raised on our own farm chemical free. you might get a wide customer base.
    You will need to hire a meat cutter. You are only one person, you can't do it all. It wouldn't hurt if he turns the homemakers on.
     

  3. fordy

    fordy Well-Known Member

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    ...................If this business has a loyal following ....they're loyality is TOO the Current owner. Unless HE, is willing , to spend say 6 months with you "Hand holding" and introducing you to his clientle they may drift away to other sources of meat. And that is NOT to say that you won't ultimately build your own loyal customer Base. But, he is going to want a Premium for his Blue Sky or Good Will or customer loyalty however you want to describe it. Personally , I would look into finding a location that "Has some potential" (and No blue sky) and see what it would cost to open up your OWN retail location. Your initial capital outlay(s) will be much less and the problem of knowing how to cut meat is a problem that you will have under either scenerio. ...........fordy..... :eek: :)
     
  4. pointer_hunter

    pointer_hunter Well-Known Member

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    If you know the seller, you may be able to work with him a bit. Explain that you want to buy the business but don’t know the butchering aspect. Maybe he knows someone that is a butcher in need of work. If he doesn’t want to retire next week, he’ll work with you and show you step by step how to butcher. Kind of a transition from old to new, there should be a time frame where both of you are there together, that way you can get any of your questions answered by the one who really knows. Who knows maybe he just doesn’t want the “business” but will stick around and maybe butcher for you one or two days a week. If there is already a customer base, and the facilities are up and running, I would say go for it. The major problem I could see would be you not being able to produce enough on your farm, but it wouldn’t take much to find a few other farms around to pick up the extra demand.
     
  5. Mel-

    Mel- Well-Known Member

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    jena,

    I would go pick his brain. explain the situation to him, find out from him firsthand what it will take to learn how to butcher. see if him teaching you the lay of the business for a while can be worked into the deal.

    Mel-
     
  6. A lot of good advice so far!

    The equipment is worth no more than if it was being sold in a fire sale.

    How old is the equipment and more importantly the age of the coolers and display counters.

    Will he share his "secret recipes" for say sausage or meat rubs or etc.

    How much does he make, by the books, no wink and a nod figures, and how many hours to achieve that, is it better than a minimum wage job?
     
  7. If you are comfortable with all the health & government regulations and red tape and you will have the time to run the business and your homestead, then go for it. Make sure you audit the books and have a good idea of the potential income from the business and the amount of your time it will require to run. You should include the promise of the current owners' consulting time in the contract and that they will guarantee you advice and training necessary for the transition.

    At the risk of the wrath of those that may disagree with me... If you have children, will this business take away their quality time from you? Growing children need their parents--mother and father--and this need cannot be delegated or hired away to others. It has been said that no amount of success can compensate for failure in the home. If the children are older, then there may be teaching and bonding opportunities as they work in the business with you. At any rate, carefully consider the needs of your family. When we get old, we will not regret that we did not spend more time at work, but our regret will be the time we could have better spent with the family.
     
  8. Jena

    Jena Well-Known Member

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    Thanks for all the advice so far.

    as far as starting my own....i have to a point, with my from home sales of meat and poultry. it is growing, but it's slow. if i buy his business, his customers will be back...at least to make sure that they quality and service are what they are used too. if they walk in the door, i can keep them! i know i will have to pay for that "goodwill" and it's worth the money to a point. I have to see his figures first, but i think it's a huge advantage over starting from ground zero. I would not even change the name of the place, though it is called "mike's meat". I will just become jena-mike!

    i am going to go see the SBA for help before i do anything drastic. i have run a few businesses in my life, but always from my home...daycare, housecleaning and now the meat deal and oh yeah...the farm. I've never had a "real" business before. I know they can help me with purchasing and all that. Hopefully they also can tell me things like about what to check for in equipment (thanks for the post) and things like that.

    I spent many years working in the real world. I understand the toll on the family caused by time away from home. my youngest is 10, then they are 15,17,18 and 20. the two oldest are out of the house, the middle two would be happy if i gave them a job. the youngest is the one to worry about. this place is within walking distance of my house, so i'm sure we can work out a good arrangement for quality time.

    If I can't produce enough to keep the store supplied....he gets his stuff from somewhere. I imagine he buys wholesale primal cuts and I could do the same. Now that I think of it, I don't know if retail meat HAS to be graded (I bet it does). I have a USDA processor, but he doesn't grade the meat. I don't know if he can. something else to check into.

    Keep the ideas coming!

    Thanks
    Jena
     
  9. Maura

    Maura Well-Known Member Supporter

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    The meat store in town was sold last year. The old owners had the store for about ten years, I think, and bought it as a ten year old business. They got out because of the time committment. A family run business means that it's YOU there early in the morning until 6:00 or 7:00 or later at night. They felt they needed to be able to spend more time with their teenage kids. That said, they have the store back. I don't know why the new owner couldn't make a go of it.

    I continued to buy my meat from the store since they were buying from the same wholesaler and treated we customers nicely.

    The SBA may or may not be able to help you. With a conventional business, probably yes. Have an accountant go over the books, including tax returns. When you make the commitment, have him also go over your farm records.

    The owner may be happy to be your butcher. If he was, he'd be right there if you had questions, and would know what his customers like. There will be things that you could do yourself (like cut up chickens or grind meat) and other things that you'd want the butcher to do, so you probably would not need him full time.

    Once you know how much meat he sells, you can determine if your farm can handle it. If not, you can contract with local farmers to grow meat for you (no steroids, pasture raised or corn, etc), beef, sheep, chickens, turkeys, fish. You know what it's like trying to market yourself, your neighbors would probably love to be able to negotiate with you and know they will be able to sell their meat at a good price to a public that appreciates the better quality.

    As for your family, you must already know that teenagers need you just as much as little kids, but in a different way. They can go to the shop after school to report in and help out a little bit, then go home. Making that connection, however quick, can mean a lot. Remember also, that kids need to cook dinner, do laundry, vacuum, etc, not because mom works, but because they are members of the family (and need to learn life skills). With this added responsibility, would you be able to hire some one to do some of your work? Local high school kids can put in a couple of hours after school to do farm chores. A stay at home mom can put in a few hours doing your bookkeeping. Having someone come in once or twice a week to do housework can save your sanity.

    I think this is all very exciting! :)
     
  10. Ken Scharabok

    Ken Scharabok In Remembrance

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    A couple of things to think about:

    - This would likely double your workload. Is it really worth it, especially when your husband doesn't share your enthusiasm?

    - Don't count on family as labor. Perhaps your teenagers might work the counter for a couple of years, but eventually they will move on to other things.

    - The USDA requirements for on-site slaughter may be overwhelming. For example, can you provide a separate breakroom and restroom for the inspectors even if they only come as needed? You may have to send the cattle and hogs at least to a processor, but can you be sure you will get the same carcasses back?

    - I thought the USDA inspectors also did the grading at least on beef. Grading is really an eyeball thing based on the amount of fat (marbling) at certain locations.

    - Insist on seeing their federal tax returns for at least the last five years. You do not need to see the entire return, just the schedule for profit or loss on a business. It is a somewhat common practice to under-report expenses when you are thinking of selling. Remember his expenses may not include any labor cost, which you would likely have.

    - Consider buying only on certain conditions, such as the guy will be your butcher at an agreed upon hourly rate for a specific period of time and make it a lease with an option to buy after a couple of years. With the latter you have the opportunity to walk way if it doesn't turn out for you.

    - Do a google search on butcher school. I believe there was one in Chicago. Something like a one-year program.

    - By his buying wholesale he can order the cuts he needs. If you use your own you may end up with far more stew meat and hamburger than you can sell at a profit.

    Ken S. in WC TN
     
  11. Wanda

    Wanda Well-Known Member

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    Jena
    Finding a meat cutter will be the least of your problems. Since stores have went to prepack meats, there are a lot of good meat cutters that are doing something other than there trade. You will also have to look at sales by ''cut'' if you are going to supply the meat! A carcas that supplys a set amount of steak also supplys a set amount of roast ,soupbones, oxtail, liver, tounge ect that you will have to utalize every time you supply a beef. As far as the quality grade the majority of beef is not. The usda grade used says it is wholesome for food and that it is beef :eek: By the way I like the name :D
    Mr Wanda
    Mike
     
  12. VonWolfen

    VonWolfen Well-Known Member

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    Sounds like a unique opportunity. You didn't mention if there was real estate involved or if it is just the business......may be super opp if he is selling real estate with it. Prepare yourself for some disappointments as far as small business loans go...my experience was they just don't exist..they are just shrouded in equity-real property-personal loan skins. And be prepared to throw up on your shoes, when you see the interest rates. You probably know that Small business government agencies do not loan money..that surprised me. ALL of the technical stuff will be easy for you. I think if the P&L numbers are within reason, it will work really well.
     
  13. Given your background, I would suggest that you look at this from a CSA (community Supported Agriculture) type of setup, this would relieve a good deal of uncertainty about costs and income for the first year.

    Selling a 1/4 or 1/2 beef at a time makes things much easier for you, fewer sales for same profit.

    Good Luck and do, do your due diligence in this matter, as the attorney pointed out above..
     
  14. Gary in ohio

    Gary in ohio Well-Known Member Supporter

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    Any business deal should include a year of transition from owner to owner. The owner would agree to become an employee for a period of time to show you the ropes. You didnt say the size of the shop, but there is a lot of state and federal reulations and I bet paper work to fill out.


    Before you go anywhere with this I would recomemd getting a lawyer. Then talking to a bank to get a loan to buy the business. Not knowing the business may make you a risky loan risk.

    After that I would want to get an accountant involved to audit the books nad make sure the business is solid as it may appear. Spend some time working in or for the current owner to understand the business and what its involved.
     
  15. mikell

    mikell Well-Known Member

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    I would keep the owner on for part time for training 2 or 3 days a week. That may be what he's looking for anyway. His loyal customer base will stay and give you a chance if he stays. If all the sudden he's gone thats when rumors get outa hand. Tell him you won't buy without his guidance. 4 days a week then 3 then 2 then 2 every other week or whatever reasonable agreement you can get. Good meat cutters are not cheap and there all a little different in the way they do things. But if you do good open an online store. A good meat market is a wonderful find.

    My .02

    mikell
     
  16. countrygrrrl

    countrygrrrl PITA

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    This is absolutely an idea whose time has come! :cool:

    Around here, many people who've worked for local chicken houses (mostly Tyson's) won't eat anything but homegrown chicken. Because they know how the commercial chickens are fed and raised. :no: Same for pork. And many just plain grow their own beef.

    I went to a meeting the other night, in fact, and we decided that our organization would band together to support people growing and selling free range chickens, grain fed beef, etc. not only by purchasing for our personal use, but by seeking outlets for sales. These kinds of meats and chickens are already being sold through local food coops, and to some extent through regional groceries.

    People, in other words, are finally sick and tired of that nasty commercial stuff. :no:

    There's a grocery down the road which hired a butcher. they do a thriving business.

    The only problems I can see with your idea would be with processing --- do you have to go to an outside processor? Also, i would for sure hire at least one other butcher.

    Great great idea! :D
     
  17. Blu3duk

    Blu3duk Well-Known Member

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    In the mid 70's my cousin and her husband started a meat shop in an old milk house after buyiing a defunct dairy farm to run in crease the capacity of his families beef operation. Several local state inspected meat shops objected to new competition, so in the late 70's they put in a facility that has the capacity to hand 100 beef, and 200 hogs, complete slaghter facility and it is federal inspected, family run.... they grow about 400 head of their own beeves each each and process them through the shop, they do custom slaughter for folks and is still a large segment ofthe business, they produce a couple of products and sell in 3 states under the farm brand V-X [vee bar X] mostly smokies, summer sausage, and salami from a beef or a beef pork mix. They purchase all the swine they run through the shop as they dont have the time to add another segment to the ranches. they dont do poultry as they never set up for that, in fact i dont know of a facility that handles poultry in the northwest in a bulk situtation as there is not realy any large poultry raisers around.... of course i dont know everything.

    My cousins went thrugh the SBA, and built their facility on the ranch for around $250,000.00 in the late 70's, which inclued all the freezers, and refrideration and the swine boiler tank as well using propane for economy..... even his mobile truck was run on propane cause of the discount they got for it, however that portion of the business [mobile slaughterc has kinda went by the wayside over the years as they got into the selling of products, the 2 ton truck is used for deliveries now. A problem with going into the selling end is you have a long process of getting labels approved by the FDA, and USDA for sale, a friend through that end when he was trying to get imported EMU meat sold after we had a local shop process it.

    My cousins take a couple 3 week horse packing trips into the wilderness areas around every year, as family mostly runs the shop after all these years, and actually he has went to logging on the ranch for something different to do... so it can be a boon to your farm, and if done properly you will have a lifetime business on all ends.

    I wish you luck.

    William
     
  18. Jena

    Jena Well-Known Member

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    My husband is starting to warm up to the idea. He thinks about things longer than I do. He's talking about growing veggies to sell and make it a produce store too.

    I would not be slaughtering any animals. I already have a USDA processor. The only difference I would see is that I would have him salughter and dress them and I pick them up as sides or primal cuts instead of retail cuts. I have never had a problem with him switching animals on me.

    grading is a voluntary thing that a processor has to request and pay for. I don't know if inspectors can also be graders or not. I'd have to see if my processor is familiar with the process or not. I imagine he would be.

    I see many problems with selling my own stuff, including being stuck with the least desirable cuts. I'm starting to think that I'd be better off to do what he does, at least with beef. Chickens wouldn't be a problem and pork wouldn't be as bad. I'm definitely going to have to check this aspect out carefully.

    I do see the possibilites of this being a business that can continue into retirement....when farming is just too much work. My husband is 16 years older than me and he says it ain't as fun as it used to be. This would be something that we could work at much longer, at least in the physical sense of things.

    People on my list to talk to include my attorney, my accountant and my banker (who is one of the meat shop's loyal customers). My attorney knows all in this little town and he has a way of letting you know if you're heading for a mistake without telling any secrets. My accountant probably does this guy's books too, hedoes just about everybody's. The banker likes me and has supported my ideas. I even drug him through the process of getting a state gauranteed cattle loan...i can do the same with an SBA loan if needed.

    The business does not include real estate. He leases the building from someone else who would probably be happy to just have the lease continued. I do know that I have to plan for contigencies in the event that doesn't work out.

    This is a major undertaking that needs lots of thinking and investigation. Time is probably the biggest thing...wouldn't life be great if we didn't have to sleep.

    Jena
     
  19. Don Armstrong

    Don Armstrong In Remembrance

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    COULD work well. Obviously you can't do the butchery work yourself with your hands and arms, but c/w/ould your husband be able to take on the butchery side of it? Not altogether, but in parallel with the previous owner, , work to master it, but then with an aim to tapering off so he was working less hours/less days as he brought on a good youngster to be the Meat Manager of "Mike's Meat and Produce"? Always have the fallback capability, but most of the time be able to kick around the shop running the fruit and vegetable produce sction?
     
  20. Oilpatch197

    Oilpatch197 Well-Known Member

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    That IS what is wrong with this country! The kids are messed up