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Purchasing a small buisness


HotCarl

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So the idea has been in my head for a while. Recently I started putting some number's down and looking at what I would enjoy doing as a small buisness. My mother is fairly successful at what she does and, depending on the market and which type of buisness I choose, might be interested in investing with me. Does anyone have any first hand knowledge of purchasing a standing small buisness? or recommend any books/websites or any other information that might be worth while to read?

 

I know im really just starting out and have alot of legwork to do, but I've got my eyes set on something that I think I would really enjoy and be fairly profitable at the same time.

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What is your trade/specialty? What service can you provide that will corner you as the person to go to, over the competition? Questions and recommendations are going to very based off of the previous questions.

 

More details please.

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What is your trade/specialty? What service can you provide that will corner you as the person to go to, over the competition? Questions and recommendations are going to very based off of the previous questions.

 

More details please.

 

Notice I'm buying INTO a "BUSINESS" (sorry rotarded, I knew it didn't look right). The particular trade/specialty would be supplied by which buisness I choose to buy. Say, an ice cream store. Purchase said store, make premium product better than competition and preferably at a cheaper price. Corner my market by geographical location, "why go to Graeter's, their all the way over off Bethel when my shop provides a better product at a better price and we're right down the road..etc..."

 

I don't really want to reveal the specific buisness Im looking at, not trying to be a prick joe but people might know people and I'd rather keep it private until im ready to actually make a move. Right now Im just feeling it out. Suffice it to say, this buisness provide's a service that no other buisness in central ohio provides. I enjoy doing it, though I would by no means call myself an expert. However I think I could make this BUSINESS highly profitable, whereas the current owner more or less look at it as a 'side project' (as far as I know the current owner is already a successful small buisness owner).

 

Now I've thought of setting up my own shop. Giving customer's an option when it comes to this service. But, therein lies the problem, would it be cheaper to just buy out the current standing business or start my own? Like I said there's alot of question's to be answered.

 

I'll PM you joe. Anyone else have any recommendations?

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Figure in rent, utilities, product to stock, possible machinery (from tools or freezers or what not), it adds up quick.

 

I've already looked at what kind of overhead would be involved, still well worth it. Im not looking for specific advice about the particular type of buisness I'd like to purchase. Just at the process itself. Should I secure financing first, then approach the owner or vice versa? How do you determine the worth of the business? I've always thought it was 3 years worth of earning's = price of company, but I could be wrong. Should I hire a book keeper or a lawyer for the proceeding's? (Its not like its a huge corporation) Say all parties are interested, don't I/bank/lender have the right to see their books and/or records kept before signing the check?

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which to do first is tough, but you definately want to have an idea of how you're going to get financing. You don't want to approach the owner and tell him you're interested then have him wait forever for you to get the money. You also don't want to line up the money only to have the owner tell you he's not interested in selling.

 

You are this far along so I'm assuming you realize that you're not going to be able to walk into a bank and get a loan for it. Depending on the amount you'll need and the type of business you may be able to get into an SBA loan program or find an angel investor or two.

 

As for the value of the business, it will greatly depend on how long the business has been around, how established it is, the nature of the business, and what if any assets you will buy with it. Newer companies will be tough to determine on earnings alone since they're generally not fully developed yet.

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I'm always looking for opportunity as well and definatly buying a business could be much easier than trying to start one. I bet you already know that though or you wouldn't be considering it. I wouldn't even worry so much about whether I like doing the thing the business would be about myself since I wouldn't want to have a business if it meant I'd have to work 40 hours a week or more. I see way to many small business owners who put more than 40 hours of work/time into their businesses and make money, but since they are more of a tradesmen and not a businesman they end up working to hard. Their pay ends up being about the same as what they would do if they just worked for someone and payed the lower taxes and didn't have all the other overhead/trouble associated with it. Myself I'd only manage a business and probably only manage it from the paper standpoint so I could go enjoy life. The added stress needs to be compensated by something:-)

 

Evan

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I would suggest reading "The Ultimate Question: Driving Good Profits and True Growth" by Fred Reichheld. Its got some good stuff in there from a mental stand point about how to become more successful. It focuses on being so successful that your customers sell your company for you. With the internet age an upset customer can tell millions rather than a few people. Just as a happy customer can come on a forum like this and sing your praise.
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I was thinkin about slingin' rocks for a summer job, anyone know where i can get some good crack?

 

 

 

Miller, I've got the finest trim in columbus on lockdown, call me for your business...

HAHA you better be serious :D. Hell, I think we should make a trip to OU and take all of Kevins as well, and serve some BP beat downs while we're at it.

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