Opening Record Store

"i was gonna type the exact same thing..."

Hate to be a downer, just keepin it real during these challenging times.

Any time is actually good to open a record shop if your idea is just having a cool neighborhood store with enough traffic to pay its way. Deciding what next to play while running "the business" is what my local guy does while enjoying his "retirement" years. Not a bad plan.
 
Power to the OP if it happens.

I wish I'd had this forum to read back in 1993 when a "friend" at my favorite indy record store convinced me we'd make a solid profit if I joined up with some other investors to open a CD/record store in Tampa (which grossed over a $M the first year!).

Long story short: lots of money went down the drain, along with toasted friendships, and it's death was drawn-out and painful; we were direct-with-the-majors, letters of credit, etc.

A few pre-investment questions you should answer a hard "yes" to: 
- Do you know every single facet of the business you're undertaking?
- Do you have a person/employee in mind you trust explicitly to share the same business philosophy (i.e. won't steal or "give away" merchandise)?
- God forbid, have you established a $ loss figure that, once crossed, will result in immediate store closure....ceasing the bleed-it-forward?

No dream will ever be realized if it isn't acted upon....but also, every dream like this must be able to be unwound.

Best of luck!

I would not do it. If he is taking his store on-line you do not get a customer base only a competitor.  Now if he was to sign a 5 year non-compete agreement the business could be valued at 1 to 2 times annual sales but talk to a business broker or good accountant.

Additionally, I would take no less than a 10 year lease with a get out clause at 5 years.

The business is worth nothing without the lease and customer base.

You might be better off to start your own web based shop but talk to a good accountant.

Open a dispensary and sell records on the side as a guilty pleasure.

You've already heard a great deal of great advice here - I'd add a couple of elements:

1.) What do you really want to do this potential business for?  What's your motivation?  If you're highly motivated, upfront money may seem different now than later.  Likewise, a passing hobby is far different than feeding yourself or a family - cheap rent or otherwise.  

2.) What are your differentiators?  You can throw a rock and hit an online version of a record store, and everyone is popping up a record store in every antique mall in the country.  What's going to make you different?

3.) Selling 'your' inventory is more difficult than selling 'inventory.'  'Your inventory' has a personal attachment to it that could negatively impact you very quickly.  

4.) What's the real time commitment?  How much is your actual 'profit'  after you factor in all the real time you'll have to invest?  Then take that and compare it to the answer to #1.

5.) The immediate value of the previous owner's business is slight more than zero but far less than you're been talking about paying for it.  The previous owner is looking for a number to get out of the shackles of that business, while there's virtually no upside for you.  If you can't negotiate a non-compete then perhaps you can work on a draw or something where you are splitting the costs over time in order to minimize your overall financial risk.  Actual partnership where you both share in the business with you taking on some sweat equity while not having to fork over the entire nut.  If he wants out, that shouldn't be an issue for him unless he's looking to either pay off something or finance something else.  If he's not willing to discuss it, then you know what you're truly walking into.

6.) Virtually every used record store that I know also deals in new product in order to get people in the store - especially 'new' customers.  That's a significant upfront investment that can go stale as distributors wont give you terms until you've established a track record with them.  That can be crippling if you're forced to buy $10K of product but only sell 30% of it within any reasonable time period.  

Again, not to be disrespectful.  Best of luck with it.