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Okay. Yeah, sorry. Yeah, we're good. We're good. So you are Tiffany?

Yes.

Okay. I want to hear everything you got going on. And thank you for coming on, by the way.

Thank you for having me.

Absolutely. We don't get very many female callers, so I always love it when we do.

Oh, awesome.

Yeah. So what. What are you dealing with?

Yes. So I bought a business last summer, and it was. I was looking for a business for a while, like, probably a few years, and I ended up with this one that I bought. It was supposed to replace the income of my current job that pays very well. And just because I'm in, like, corporate, I'm trying to get out of, like, big corporate. So it was supposed to replace my income. I did all the due diligence. I had a lawyer, I had an accountant, I had a broker. It was.

You did everything right.

Yeah. We were also going through the sba. So the SBA did all their due diligence for months. Like, we did due diligence for a very long time. And the day after the closing of the business, we found out that pretty much everything the previous owner told us was a lie. So the day after the closing of the business, there was supposed to be, like, seven employees. The day after the closing of the business, he told me there was no employees anymore. They walked out months ago. He never told us. Oh, my gosh. He even gave us, like, documents, like, he gave my accountant documents saying, like, here is all the employees. Their salary, their job titles, their start date. Like, this is how many hours a week they were. And this was all after they all walked out on him and he didn't tell us.

And was this real quick? Were you not able to validate this? Because he was saying something like, I don't want to spook the employees, so I'd rather you not meet them until after close. Was that kind of his? And that's. That's a normal reason. Right? Like, that shouldn't even be a red flag to you.

Right. So when I originally went to the business, so we were doing due diligence for so long, it was. I believe we started in February, and the closing of the business wasn't until August. So I was. We were. When I originally went to go see the business, all the employees were there. They were working. Everything looked smooth and well run, and it was fine. And then I went another time, like a month or two later, everyone was still there, so I thought everything was fine. And then he. A couple months later, he gave us all the documents for the Employees said that they still work there, and we didn't know. A month before that, they walked out. So then that was just the tip of it. That was when it started the day after, and then the day after, like, it was officially closed. And then I said to him, well, I, like, you need to hire new people. Like, I bought a business with seven employees. And he was like, oh, no, I'm not gonna hire anyone. Like, you need to do that. And I'm like, now how am I gonna do that when you didn't train me yet? So I don't even know.

I don't know anything.

Yeah, and that was the other thing. Like, when we first. The day after closing, when we had our meeting, it was like, the. It was supposed to, like, start training that day, like, virtually. And the very first thing he said to me was, okay, so what do you want to know? And I was like, everything. Like, what do you mean? And he was like, yeah, but, like, you don't need to know everything, right? Like, just, like. Just, like, name some things you want to know about. And I was like, no. Like, you need to show me how to run the whole business. Like, that's what you're getting paid for now. So, like, show me how to run the business. And he just, like, didn't have anything planned. He didn't know what to tell me. And then I found out there was no employees, because I was like, okay. I was like, I guess if you want to start somewhere, I guess I need to figure out how to pay the employees. So how do you pay the employees? He's like, oh, there's no employees anymore. And I was like, what?

And it's one thing if that happened, like, the day before, right? Like, we're leaked, but six months.

Yeah, like, no. He literally told us, like, multiple times that all the employees were there, they were running the business, Everything was great, and they were not there that whole time.

So can you tell me, like, the industry, like, to help provide some context, I'd love to know, like, the average, like, the. Just a range of revenue or profit, at least, that you expected, and the industry and, like, a rough geography and be as broad as you like.

Yes. So it's placed in New Jersey. It is a custom merch, like, promotional product business. And he claimed that he. The revenue was $750,000. So mind you, he gave us all these P and L statements. And, like, the accountants went over it, the SBA went over it, the banks went over it, and everything looked fine. And then I, like, obviously, the day after closing, you're not going to realize how much revenue is coming in or out. So it was probably like a couple weeks after. And then my accountant, like, did the first month of the P and L statements, and he was like. And he, like, sent it to me. I'm like, this doesn't look right. Like, why is this so much lower than what his always was? And he was like, we went through it multiple times. Like, this is what you brought in, and this is like, everything. And it was.

And they were. They were reconciling with the bank, and, like, they had all the info they needed.

Yep. And they. He basically. So he. When he. So he didn't show me how to use anything. I basically had to figure it all out on my own. And I hired three. I was able to find three employees that came on. And he basically didn't train them either. Like, we all had to figure things out on our own. And he. When he. All he did was set my email up to replace his email so that if anyone emailed him, it would just go right to me. And I guess he didn't realize that that means I would also have access to his old emails. So I found emails from him and his accountant that, like, his accountant sent him the P. L statements to send us, and they were not the same P and L statements he sent us.

He changed them.

Yeah. The piano statements directly from his accountant were very in the negative, and he. The ones he sent us were very in the positive.

So now what did he change them from to. So what were they when the account. What were they actually. Versus? What did he show you?

So I don't have the numbers right in front of me. Just a rough estimate. So he sent us in June. He sent us the first half of the year. Well, I guess it was July. He sent us January to June from last year. And he said that the cash flow, like, after paying all the employees, after taking his salary, like, all expenses, it was positive, like $300,000. And then that's what he sent us. And then when I found the one from the accountant, after all expenses, it was like, negative $150,000.

Oh, my goodness.

Yeah.

And then it wasn't even a sellable business.

I mean, right? Not at all. And then probably, like a couple weeks in, I found out that he sold equipment that was supposed to be included. And then I started getting all these calls from vendors that he didn't pay. So because they're all the employees walked out. He had to start outsourcing everything. And so a lot of the customers he just was ignoring. He wasn't even answering. He was kind of just like, well, I'm selling it in a couple weeks. So like he just wasn't being bothered. But then some of them he was outsourcing. And then he never paid those vendors to. For the work that they did. So then they were reaching out to me, like, you need to pay this. Like you already got the stuff. And then it was a lot of stuff. Like he sold equipment, there was no employees, he lied about the revenue. I literally haven't. This was supposed to replace the income from my current job and now I'm working full time at my current job and running this business and I haven't taken one penny from the business. And we're negative every single month. And I like, we're. The business is running off of credit cards and that interest is like building up and we're at like the bare minimum of employees because or else the business won't run. Like, I have someone making the products. I have someone who's like helping the customers and everything. And then someone who does like the graphic design stuff and all that. Like, I can't get rid of any of them really. And that's the only other way I can really cut revenue right now. Like I got new vendors that are a little bit cheaper. I like raised prices a little bit, but I can only raise them so much without people thinking we're absolutely insane. Yeah. And I just don't know what else to do. Like that interest is really racking up on the credit cards and we are in the middle of a lawsuit against him. But that takes a long time. And like I keep putting my own personal money into it every month and I can't even quit my job over the employees positions because one, I wasn't trained on anything and two, there were still negative. So like I, the only. It wouldn't make sense. I wouldn't be able to take their income anyway.

Yeah. So let. First of all, you got the lawsuit going, which is great. We won't even talk about that because you're already working on that. What are your, like, what are your options? Like what would you prefer to do in a perfect world if you could turn this around? You know, because you've got like run away, you've got hide, you've got get a job, you've got shut it all down, declare bankruptcy, you've got turn it around, grow it paid marketing. Like what do you want to do and what, what do you think are the options in front of you? The most realistic ones.

Yeah. So I've tried to do some marketing, but again, like, I can only do so much because we're already negative, so I can't put out a ton of money on that. Ideally, like, obviously I would want to make what he told me I was making so I could replace my income. I. I don't know. I think, like. So I have talked to the lawyer about bankruptcy, but we're trying to go through with the court dates and all the lawsuit before we actually go through with that to see if it's necessary. I just, like, don't see how it's, like, realistic to raise the revenue that much in the amount of time that we would need it to be raised that much.

So if you. If you can't, then what do you think you'll have to do?

I.

So let's talk about how you might be able to.

Yeah. So I. So right now I'm just kind of waiting for the court dates and the lawsuit and say, like, that doesn't go in my favor for whatever reason. I don't really see how it can't. But say it doesn't. I think, like, my only option would be to try to, like, sell the business and who's going to want it? I mean, the only thing I'm thinking is, like, if I sell it to another similar business that might want, like, the equipment and the customers that we do have, and they would have to get rid of their employees because they're going to already have employees. But it's not going to. Like, someone who's not in the industry isn't going to buy the business when it's negative.

Are you able in the chat here to message me the domain name and I'll keep it private. I would really like to look at the website just to see exactly what you do.

There's a chat?

Yep.

How do I. It's not letting me do it.

You could even email it to me if you want.

Let me email it. It's not letting me do it for some reason. Maybe I have to.

I just messaged you. Did you see it come through? Is there a notification or.

There we go. Got it. Yeah. So I sent you the.

All right, there it is. Yep. And then.

So, yeah, I don't. Unless, like, there's a company who would want to do, like, a merger.

So is it. Is it screen printing? Mostly?

Yeah.

Or just custom merch.

So, yeah, it's like, specialized in screen printing apparel, but we do everything. Embroidery. We can do pens, postcards, literally anything.

And what's up with the two locations here.

So. Yeah, that's the other thing that's a little sketchy. So it is just in Jersey. He claimed that he was opening another location at the other one, and it turns out like, he wasn't. He was just making that up. And then he also claimed that he was franchising it. And then we found out that also wasn't true.

Yeah.

So that other location does not exist. It's. We keep trying to take it off and there's like, issues with the website, but it is just the one location.

How long had he been in business and how did he acquire the customers that he has?

So that's the. So mind you, I'm just getting this from him and he hasn't been truthful about 95% of the stuff. So this is just what I'm hearing from him. It was. He started it in 2018, and apparently he did no marketing or anything. He just. It was like, word of mouth. His dad is kind of in the same industry, so his dad, I guess, kind of got him customers. And that's the other, like, there. His dad is kind of well known in the area. And that's the other thing. Both of them, like, his dad has a radio station and his dad, like, went on the radio talking about it, like, all these lies. And the old owner also went on all his social media, like, trying to, like, defend himself. And like, we literally haven't gone public about this at all. So, like, I don't know why you feel the need to do this.

Yeah.

But he would say, like, the business name and like, everything. And I guess, like, trying to. I don't know what he's trying to do, but that's also, like, now involved in the court case for defamation and everything, too.

Yeah. So he claims he launched in 2018. It's always just been kind of organic as far as acquiring customers goes. That's kind of how he framed it.

Yeah. I mean, he told us there was no marketing, so there was plenty of room to grow and all this stuff. But I'm not sure how accurate that is anymore.

Yeah. And what does your average customer look like? How much are they spending? Is it a school? Is it a. You know, what type of person is it?

Yeah. So we do quite a few schools and like, recreation centers, you. That work with, like, team sports and stuff. And then we do businesses, a lot of businesses, like landscaping, construction workers, stuff like that. And then we'll also do, like, smaller things where people just want like, a sweatshirt for their grandson or something. But most of our stuff is like bigger businesses like ice cream shops, construction places, landscaping, schools, stuff like that.

Okay, and have you been able to. When did you close again? Like, when did this all go down?

Last August.

Okay, so you've been at this for a while then.

Yeah.

So you started in February of 2023. Due diligence lasted six months, closed in August, found out about all this in August and you've just been like, trying to keep your head above water.

Yep.

Ever since. So I'm looking at the web archive of his domain name and it looks like it was launched in 2023. 2021, it was a parked domain early 2000s. The domain was used for like a tattoo shop. It. But like Feb. I mean there's. There was nothing indexed on the website in 2022 for this. For this business, which is very rare.

Yeah. And I don't know unless he just. I don't know why he would just start the website right before he put it up for sale. I guess he did then.

Honestly, it looks like he did. I'm looking@whois.com the ur. The URL on who. Whois.com and it so registered on in 2021. So it looked like this domain was active in the early 2000s. Someone let it expire. It was registered again at the very end of 2021. So basically 2022. And then like it wasn't really. People weren't really doing anything with it until 2022. And then 2023 is when Google started indexing it. And it back then it looked like what it looks like now, but it looks like he just built this as a front to sell it, like as a frog.

Seems like what we've been like, finding is that like he seemed. It seemed like he. Right before he listed it, he kind of like put all these things in place to make it look more legit than it was.

Yeah. How. How many customers do you have?

It's so hard to say. So probably like a weekly basis. We might have like five to 10 customers on a weekly basis.

Okay.

Some of them repeat, some of them not.

And what is your monthly revenue nowadays?

Let me bring that up. It varies because it is a very like, seasonal. So like right now is our slower season because it's summer. So like schools aren't doing anything. So it does vary. So let me see what last month brought us in.

Are any drugs involved with this seller? Like, is he like, addicted to gambling or. Do you know of anything like that?

Not that I know of, but I mean, I Mean, I guess anything's possible at this point.

So my guess is, like you said, his dad's in the industry. They probably know the industry really well. They speak the language. I bet you anything that he started this business with the intent of it actually being a business launch. Didn't really go well. He cobbled together some customers, he didn't like what the numbers look like, and then just being completely uncaring. Psychopath, sociopath. Just lied, faked everything he could to get some money out of it and then was just totally cool lying to anyone about anything because he saw six figures coming into his bank account in the near future.

So last month it was. The revenue was 28,000. I'll check the month before just so you can get like a kind of better idea. And then the month before was the.

Owners owner's name start with a B.

Yes. The month before was like 30,000. So I guess around that this time of year.

And what are your margins? Like.

So that's as in terms of like our expenses, like our cost of goods.

Mm.

So that's. Let me see what it said for last month. So last month our total cost of goods sold was 9, 700.

Okay. So like 65 gross margins, give or take. So 30 grand top line, 10 grand bottom line. Or sorry, 30 grand top line, 10 grand in cogs, basically.

I guess so, yeah.

Okay, so then like out of that 20 grand left, you're paying employees, I imagine you have your expensive rent, overhead, etc.

Yeah.

Okay.

Yeah. And then we have to pay like the vendors like monthly cost. And then we have like a graphic design service that's like pretty expensive. Monthly. Yeah, all of that.

So how much are you paying?

The is 10,000amonth minimum.

Okay. Wow. Okay, so that's half your gross profit. How much are you paying the graphic design company?

They are 2,000amonth.

And it's like an agency.

Yes.

How many different like designs are you making? Are you having them make every month?

So it's. Our package is like 50amonth and we've never really gone over it. So it's around like 50amonth.

50 designs for $2,000.

Yeah.

Okay. And that's like a stateside agency.

I think it's like nationwide.

Well, like, sorry. Like it's not a virtual assistant. It's a US based company.

Yeah.

Okay. I would see if you can find someone on upwork to do it like.