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Buying a small business

Old 01-09-2019, 11:04 AM
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Default Re: Buying a small business

Originally Posted by vLad11591 View Post
Like Grimace said, once you own a small business, you being the boss, you have to invest 70+ hours for it to be successful. Something like a coin laundry shop wouldn't be too bad, or like a bagel shop/donut shop. Most start ups fail within 2 years. You realllyyyyyyy need to put in hours for it to be successful and you won't see cash flow in most cases until year 3 or 4. Unless you're doing some contracting work like HVAC or plumbing, or odd job construction work.
Agree. Sadly, that's about the same work I do now, but I work for someone else.

Originally Posted by sflkgjsfndgn View Post
Good IT contractors are difficult to find. There’s always a market for them. Nearly every business with over 10 people has a private IT company and they aren’t cheap. Need to handle the whole package though. Hardware, software, security, etc.

As far as buying a business. You have to be careful and really understand the numbers. A lot, or should I say most, businesses anywhere close to your price range will inflate numbers to make the business worth more on paper. It’d be difficult to value the business yourself if you do’t know that business inide and out.
Agree, which is why I want to talk to a broker to understand things. And yes, those numbers are likely inflated. I don't have a specific price range, but it is likely under $1M.

Originally Posted by .Grimace View Post
I had a hard time finding employees. I could only imagine how hard it'd be finding someone I trusted enough to take over running it for me. No one is every going to care like you do they'll just collect the check and half *** it unless you get lucky finding someone. I tried 1 or 2 people and nothing worked out but selling it.
Agree. Just like renting property. No matter how great the tenant is, nobody is going to treat it like you treat your own home.

Hopefully if it is a bike/bike repair shop (looking at one now), maybe you can hire a min-wage person to help out and it won't be too much of a burden.

Originally Posted by tron_ View Post
OP, running a business you're not passionate about and doing just for the money doesn't seem advisable especially in today's small business environment. Would you consider consulting in IT since you've been in the field for a while? That seems like a more viable option with more freedom.
I am looking for a business in something that I am passionate about. I just want to make sure I understand all the things behind the scenes.

I'm looking at bike/bike repair shops and similar things. I always said if I won the lottery and didn't have to work anymore, I'd just be happy working at a bike shop fixing/selling bikes. Some of the ones I'm seeing are clearing $250K+ net a year (probably inflated) but that sounds pretty good to me.
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Old 01-09-2019, 11:05 AM
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Default Re: Buying a small business

Laundromat / Dry Cleaners. Then look into midwest multifamily units for rental income.

Dry cleaners don't even do the actually cleaning on site, so you just need a small staff to handle the drop offs and pick ups and the clothing will be trucked in and out each day.
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Old 01-09-2019, 11:07 AM
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Default Re: Buying a small business

Originally Posted by BeeResp0nsible View Post
Aren't you in IT? Why not start a business that's related to what you do and go from there?
I've gone through this convo with a few friends lately who have asked me the same question.

Short answer, it's really tough and as a small operation, you will likely get small time clients at first, that want to pay you nothing and for you to work 24x7.
For me, here in MD, it's largely GOV and State work, which is VERY tough to break into.

Then add in job security and benefits and all that, working for yourself is tough!
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Old 01-09-2019, 11:08 AM
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Default Re: Buying a small business

Originally Posted by shamoo View Post
Over the last few months, I've just lost all motivation to work. Too much stress, not enough pay, never can take a true day off (I've worked every PTO day), not enough resources due to budget (I can't add headcount), etc. Basically the company wants a Mercedes, but is operating like a Kia. No matter how much you mod the Kia, it is not a Mercedes. Plus after all that I do, people still complain about my team (when they're not the problem).

Anyway, I've been talking with the wife about possibly buying a business. We've been looking on https://www.bizbuysell.com/ and some other sites and found a few that could be interesting.

Here's where I have a problem. I don't know anything about running a business and I understand that just because I know about the product, doesn't mean I can run the business. There are a lot of things going on behind the scenes (tax IDs, lease agreements, purchasing, invoicing, equipment expenses, etc) that I will need to handle. I also see a lot of numbers on those business-selling sites that seem too good to be true. A business selling for $400K, but a cash flow of $250K annually (after expenses)? That doesn't make sense because after less than 2 years you're already profiting? Why would they even sell it?

The goal is for me to continue working while my wife can leave her job and run the business. Once business picks up and finances can support both of us not working, we can both put 100% of our time into it. Would like positive cash flow within a few years. Would be nice to have something with very few employees, as more people is more headache. I will consider adding more employees if business picks up. There's so many things out there from coin operated laundromats to doctors offices to machine shops to well developed work-at-home affiliate marketing companies.

I've also learned that just like realtors, there are business brokers who can help you. I did not know this so I might contact one in my area to start an initial conversation.

For those of you who have done this, or run a small business, can you share any insight?
We could always open a dealership.
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Old 01-09-2019, 11:10 AM
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Default Re: Buying a small business

Originally Posted by Mark View Post
We could always open a dealership.
he should get sponsored to do a travel blog/IG feed and travel the world.
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Old 01-09-2019, 11:10 AM
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Default Re: Buying a small business

Originally Posted by Mark View Post
We could always open a dealership.
The initial capital investment to do so is incredible. I certainly don't have the means unfortunately.
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Old 01-09-2019, 11:11 AM
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Default Re: Buying a small business

Originally Posted by shamoo View Post
The initial capital investment to do so is incredible. I certainly don't have the means unfortunately.
You don't need it. You're a smart guy, you get investors or a loan. If you have the idea, the money will follow
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Old 01-09-2019, 11:12 AM
  #33  
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I've always wanted to open a liquor store!!
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Old 01-09-2019, 11:13 AM
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Originally Posted by Mattb16teg View Post
I've always wanted to open a liquor store!!
There are plenty of corners in baltimore that would welcome your business! DO IT!
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Old 01-09-2019, 11:14 AM
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Default Re: Buying a small business

Originally Posted by Tim2179 View Post
There are plenty of corners in baltimore that would welcome your business! DO IT!
have been there, not there!

I don't want to have a Bullet Proof front with Turn style.

I remember going to those stores before school to get a snack and stuff and having to jump and point at what I wanted.
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Old 01-09-2019, 11:20 AM
  #36  
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Default Re: Buying a small business

Originally Posted by Mattb16teg View Post
have been there, not there!

I don't want to have a Bullet Proof front with Turn style.

I remember going to those stores before school to get a snack and stuff and having to jump and point at what I wanted.
Co-worker of mine used to work at a liquor store in high school (not local) and said the owner made bank because the mark up was so high. I don't know much about them but I would think the biggest hurdle is getting the actual liquor licence.
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Old 01-09-2019, 11:23 AM
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Default Re: Buying a small business

Originally Posted by Tim2179 View Post
Co-worker of mine used to work at a liquor store in high school (not local) and said the owner made bank because the mark up was so high. I don't know much about them but I would think the biggest hurdle is getting the actual liquor licence.
Yes, the license/fees.

Then you have lease/rent if you don't own the space. Taxes and expensive permits/inspections if you do. A ton of utilities (if you think you pay a lot for a home, a business is even more). You can't even use regular residential home Internet, it has to be small business and they upcharge you 500% for the same level of service and maybe a couple of extra external IPs. Relationships with liquor distribution companies, contracts, etc. And insurance is a big hitter.
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Old 01-09-2019, 11:25 AM
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Default Re: Buying a small business

What models are you running now to compare your options? Do you have a target you're shooting for as far as annual cashflow?
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Old 01-09-2019, 11:28 AM
  #39  
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Default Re: Buying a small business

Originally Posted by Tim2179 View Post
What models are you running now to compare your options? Do you have a target you're shooting for as far as annual cashflow?
I do not. I think I want to understand the ins and outs of owning a small business by talking to a broker on what it takes to buy one and go on from there.

I would like to be able to sustain my wife's income so she can leave her job and then ultimately mine + more.

I would like to say I'd be comfortable with a $500K or more annual cashflow after expenses. And I'd be okay with getting to that number within 5 or so years.
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Old 01-09-2019, 11:31 AM
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Default Re: Buying a small business

I'd be ok with 500k as well, sup
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Old 01-09-2019, 11:32 AM
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IB mod starting salary doe
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Old 01-09-2019, 11:36 AM
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Originally Posted by tony_2018 View Post
Most startups in the tech field usually hope some fortune 500 see's the potential and get bought out.

@shamoo if your wife is comfortable where she works I think its time to get her out of her comfort zone and take in more work from the boss and have the boss shadow her.
Sorry, didn't see this. Believe me, I've spoken to her at length about this. I don't think she has any interest in her current company. It is all CNC machining, computer board parts, electric motors, etc.

I've even asked her to have a one-on-one with her boss (heck, they're family friends, came to our wedding, that's how she got the job, etc) to find out when he's looking to retire and what he plans to do with the company. Hell, maybe we CAN buy it.
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Old 01-09-2019, 11:44 AM
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Default Re: Buying a small business

Originally Posted by shamoo View Post
never can take a true day off (I've worked every PTO day)
Umm don't you take roadtrips and go skiiing every weekend┐?┐

I'm with others. If you are pro in IT I would consider starting your own consulting practice
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Old 01-09-2019, 11:48 AM
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[QUOTE=CAN97SH;51826511
I'm with others. If you are pro in IT I would consider starting your own consulting practice [/QUOTE]

Not as easy as it seems, see my brief comment up the page.
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Old 01-09-2019, 11:50 AM
  #45  
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Default Re: Buying a small business

Originally Posted by shamoo View Post
Sorry, didn't see this. Believe me, I've spoken to her at length about this. I don't think she has any interest in her current company. It is all CNC machining, computer board parts, electric motors, etc.

I've even asked her to have a one-on-one with her boss (heck, they're family friends, came to our wedding, that's how she got the job, etc) to find out when he's looking to retire and what he plans to do with the company. Hell, maybe we CAN buy it.
Not a whole lot of folks want to start over, but not a whole lot of folks want additional responsibility, someone's gotta give. **** it, open a liquor store. Asian way, the Texas way.
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Old 01-09-2019, 11:58 AM
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Default Re: Buying a small business

Why don't you just nix as many expenses as possible and get a meaningless job instead? Less pay but less headaches. I feel like buying a company is a huge step. Also lulz in the beginning you saying you hate your job and can't get a day off but the idea is for your wife to quit and you keep working haha what a dedicated husband.
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Old 01-09-2019, 12:01 PM
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Buy a parking lot or a gym. These would be my top two if I were to have a business. Followed closely by a laundry mat. You don't even need to be passionate about any of those for them to make coin.
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Old 01-09-2019, 12:04 PM
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Default Re: Buying a small business

Originally Posted by mozzandherb View Post
Buy a parking lot or a gym. These would be my top two if I were to have a business. Followed closely by a laundry mat. You don't even need to be passionate about any of those for them to make coin.

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Old 01-09-2019, 12:06 PM
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Anyone say strip club yet? What about a strip club with gambling. Find some feather indians and go for it.
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Old 01-09-2019, 12:13 PM
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Originally Posted by CAN97SH View Post
Umm don't you take roadtrips and go skiiing every weekend┐?┐

I'm with others. If you are pro in IT I would consider starting your own consulting practice
I do go a lot, don't I? But it is maybe 5 weekends out of the year and I'm still checking my phone on the slopes when there are issues. See below for second part.

Originally Posted by Mattb16teg View Post
Not as easy as it seems, see my brief comment up the page.
Yeah exactly. To be a good consultant, you need to have a large network of contacts and clients. It will be extremely difficult to start from scratch, as I'm sure there are a LOT of IT consultants out there with more experience than I have. I'm only about a little over a decade in the game.

Originally Posted by 09chaplak View Post
Why don't you just nix as many expenses as possible and get a meaningless job instead? Less pay but less headaches. I feel like buying a company is a huge step. Also lulz in the beginning you saying you hate your job and can't get a day off but the idea is for your wife to quit and you keep working haha what a dedicated husband.
I thought about it VERY briefly. The problem is I live in a very high cost of living area. An attached townhome is right about $1M. Forget about anything else. Then you have taxes and everything else on top of that. My wife won't move because she is very close to family, and at this point my parents need help and they aren't able to move either. I live about 3 minutes away from them.

Originally Posted by mozzandherb View Post
Buy a parking lot or a gym. These would be my top two if I were to have a business. Followed closely by a laundry mat. You don't even need to be passionate about any of those for them to make coin.
LAUNDRYMAT!

I agree, however looking at the numbers on some of these, it just looks too good to be true.

I really like this local bike shop for sale. Thinking it could slowly transition into other things as I use social media and whatnot. Organize rides. Actually sell more bikes (vs. just repairing). I like cars....maybe start with a few IG photos with cars and bikes and gather some more interest from automotive enthusiasts. Sell coffee? But then probably need some sort of food license, no idea.
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