Notices

Buying a business

Old 02-06-2010, 10:48 AM
  #1  
Senior MemberCaptains Club Member
Thread Starter
 
Join Date: Jun 2005
Location: Connecticut
Posts: 8,760
Default Buying a business

I know there are some savy business owners on here so I need to pick your brains a little.

Here is my situation:
I am 55 yrs old, been in construction all my life, just got laid off really for the first time in my life. I have survived many hard times/recessions but this one looks really bad. I don't forsee construction picking up here in the northeast for at least another year.

I am in the very prelimary stages of thinking about buying a business, due to my age I think the best path would be to try to buy something established as opposed to a startup. My wife is a nurse, we are both covered under her medical so that is covered. She would keep working, I would work the business full time. My wife only works 24 hours a week so she would be able to help out. We both have pensions coming and I have a little money in a 401k (I would leave that alone).
I have about 25k cash to invest, I have about 80k equity in my house but would prefer not to touch that.

I am looking for something that would generate an income of at least 60k net for the next 10 years or so.

This is all new to me so I am looking for any suggestions/advice.
richinct is offline  
Old 02-06-2010, 10:58 AM
  #2  
Senior MemberCaptains Club Member
 
Join Date: Dec 2007
Posts: 15,649
Default

To re-phrase the question to suit your finances... let's say you currently own a business that net's you $60,000/year return and let's say you want to sell it. How much would you ask for your business?

Assuming that your answer is a whole lot more than $25K, the chances of finding what you're currently looking for are pretty slim. If re-location isn't an option, either, then maybe you could find a business whose owner just needs to get out of it and will finance a majority of it. A service type business that doesn't have assets or inventory to buy is a good place to start looking.

Good luck!
bamaboy473 is offline  
Old 02-06-2010, 11:10 AM
  #3  
Senior MemberCaptains Club Member
Thread Starter
 
Join Date: Jun 2005
Location: Connecticut
Posts: 8,760
Default

I am thinking of 25k as a down payment, I am assuming I would need look for financing. Another reason for looking at purchasing an established business. I think lenders would be more favorable to lending for an established business as opposed to a start up.
richinct is offline  
Old 02-06-2010, 11:12 AM
  #4  
Senior Member
 
Join Date: May 2006
Location: Suffolk, Va.
Posts: 16,955
Default

I'm in the ins. business and the general thumb for selling an agency is 3x your renewals. So if my book brings in $300,000 I could sell it for $900,000. Thats probably not alot of help.
fishingfun is online now  
Old 02-06-2010, 11:21 AM
  #5  
Senior Member
 
Join Date: Sep 2008
Location:
Posts: 3,758
Default

Originally Posted by richinct View Post
I know there are some savy business owners on here so I need to pick your brains a little.

Here is my situation:
I am 55 yrs old, been in construction all my life, just got laid off really for the first time in my life. I have survived many hard times/recessions but this one looks really bad. I don't forsee construction picking up here in the northeast for at least another year.

I am in the very prelimary stages of thinking about buying a business, due to my age I think the best path would be to try to buy something established as opposed to a startup. My wife is a nurse, we are both covered under her medical so that is covered. She would keep working, I would work the business full time. My wife only works 24 hours a week so she would be able to help out. We both have pensions coming and I have a little money in a 401k (I would leave that alone).
I have about 25k cash to invest, I have about 80k equity in my house but would prefer not to touch that.

I am looking for something that would generate an income of at least 60k net for the next 10 years or so.

This is all new to me so I am looking for any suggestions/advice.
25k cash... I got one! how about buying out the kid who delivers the new paper in your nebiorhood?

For 25k you might be able to come up with a hobby???
boatmanalso is offline  
Old 02-06-2010, 11:33 AM
  #6  
Senior Member
 
Join Date: Mar 2009
Location: Slidell, LA
Posts: 139
Default

I believe you have to find something you want to do. It will be more difficult running a business you know nothing about. I don't know what you did in construction or what your hobbies are but I would start there.

The reason franchises are so big is because they teach you how to run the business, help with location and supplies. Some will even help with providing temporary labor to get the business running while training new staff. The more they do for you and the greater the potential income the more the initial investment will be.

Not knowing your health or your motivation you may need to do something as a sole proprietor. Simple legal set up, work from your home, grow the business as the money comes in. Remember if you keep your costs low more of your work will translate into income and less will be eaten up by expenses. you can bill out 30 hrs a week at $ 50 an hour for a gross of 78000. Pay for your fuel and insurance, bill materials separately.

The hardest part is deciding what you want to do.
alblancher is offline  
Old 02-06-2010, 11:34 AM
  #7  
Senior MemberCaptains Club Member
 
Join Date: Jul 2003
Location: NJ
Posts: 807
Default

I believe subways are the cheapest franchise to start, if you are looking in that direction.

Here is some more info
http://blog.globalbx.com/2009/05/05/...ranchise-cost/
35donzi is offline  
Old 02-06-2010, 12:08 PM
  #8  
Senior Member
 
Join Date: Nov 2005
Posts: 10,223
Default

As mentioned you'd be better off looking into something you enjoy, as getting something you don't will kill you and the bottom line.
You could get into a Pizza shop of your own without much out lay of cash. First, if this is something you think you'd like get yourself a job working at one in your area. Get paid to train is a good way of going.
Then when you think your ready work another 6 months, ask as many questions as you can without setting off alarms with the owner. Make a list of suppliers and repair/service people they use.
Find a local used restaurant supply place and buy your ovens/sinks/fryers etc from them, you'll save a ton of money. Depending on your relationship with the owner of the place you work at he might even help you set up shop, you'll have to pay him for his advice but this will save you another ton, offsetting the cost of his service.
You might be able to apply some of this to another type of business but going into debt is another expense you'll need to cover.
Just thought, a low cost start up might be power washing. Go around to local businesses and offer your services. Keep in mind, all "franchises" are required to maintain there property so if there walk and parking lots are in need of cleaning you can make a good point with them. Offer to clean a small area for them just so they can see the obvious difference of before and after.
08087 is offline  
Old 02-06-2010, 12:21 PM
  #9  
Senior MemberCaptains Club Member
 
Join Date: Apr 2006
Posts: 8,497
Default

Look at a Chik-Fil-A.

The places are always packed. They have a great reputation. Healthy food. Fast service. Great support from the corporate office and you can buy-in for $5k. Tuf to get "in" though.
chrisrack is offline  
Old 02-06-2010, 12:27 PM
  #10  
Senior MemberCaptains Club Member
 
bellsisland's Avatar
 
Join Date: Nov 2001
Location: Charleston, SC
Posts: 5,916
Default

Start here -> http://bizbuysell.com/

Pick different categories and see if you see anything you like.

Also alot of times there is owner financing, if you SBA, then you will be looking at 80% loan, meaning you will need at least 20%, but Obama is starting to push regional banks, so maybe the spread is getting bigger. Meaning you might get only have to put 10%.

But the biggest thing to remember is, if you use all $25k to put down then you don't have any working capital left and that could leave you in a pickle.

What part of construction were you in?
bellsisland is offline  
Old 02-06-2010, 12:35 PM
  #11  
Senior MemberCaptains Club Member
 
bellsisland's Avatar
 
Join Date: Nov 2001
Location: Charleston, SC
Posts: 5,916
Default

I just posted on the other thread about what business to start now. If you are handy you should get speed queen certified to work on laundry mat equipment. Over time you could develop routes.
A lot of laundry mats are owned by one person, so you could handle all of the repairs for them, once you got enough routes, you could hire an apprentice and grow it slowly.

I know that you can get $60 per hour, and 30% mark up on parts.

My parents own laundry mats and can't ever find any reliable to service them.

You would work on dryers, washers, coin machines, etc. If you know plumbing that helps as well.

Start small and use the $25k for working capital.
bellsisland is offline  
Old 02-06-2010, 01:01 PM
  #12  
Senior MemberCaptains Club Member
Thread Starter
 
Join Date: Jun 2005
Location: Connecticut
Posts: 8,760
Default

Originally Posted by bellsisland View Post
Start here -> http://bizbuysell.com/

Pick different categories and see if you see anything you like.

Also alot of times there is owner financing, if you SBA, then you will be looking at 80% loan, meaning you will need at least 20%, but Obama is starting to push regional banks, so maybe the spread is getting bigger. Meaning you might get only have to put 10%.

But the biggest thing to remember is, if you use all $25k to put down then you don't have any working capital left and that could leave you in a pickle.

What part of construction were you in?
In my last job I was working for a company that started out in steel fabrication and expanded into GC/CM work. I was doing mainly estimating and also running projects. Most of my experience is in steel.

I have looked at that site, there are a lot of places for sale in my area in the 100k range.
richinct is offline  
Old 02-06-2010, 01:09 PM
  #13  
Senior MemberCaptains Club Member
Thread Starter
 
Join Date: Jun 2005
Location: Connecticut
Posts: 8,760
Default

Originally Posted by chrisrack View Post
Look at a Chik-Fil-A.

The places are always packed. They have a great reputation. Healthy food. Fast service. Great support from the corporate office and you can buy-in for $5k. Tuf to get "in" though.
I never heard of Chik-Fil-A so I googled it, according to the map on Wikipedia, Connecticut is one of only a few states that doesn't have one (may be why I never heard of it) I don't know how old the map is though.

richinct is offline  
Old 02-06-2010, 01:11 PM
  #14  
Senior Member
 
Join Date: Sep 2008
Location:
Posts: 3,758
Default

Originally Posted by richinct View Post
I never heard of Chik-Fil-A so I googled it, according to the map on Wikipedia, Connecticut is one of only a few states that doesn't have one (may be why I never heard of it) I don't know how old the map is though.
I did the same .... I got 2 here in Ma.
boatmanalso is offline  
Old 02-06-2010, 03:33 PM
  #15  
Admirals Club Admiral's Club Member
 
Join Date: Jan 2007
Location: North Shore , MA
Posts: 1,390
Default

Maybe this'll work for you........
http://www.bizbuysell.com/cgi-bin/ad...ab=eb&q=263947
nausetlight is offline  
Old 02-06-2010, 03:51 PM
  #16  
Senior Member
 
Join Date: Nov 2009
Location: MAINE and N.Y.
Posts: 2,767
Default

I have been in construction my whole life and this is really bad now and most likely to get worse . A good small hot dog stand with homemade chile and onions will allways do great in a good location without spending all your waking hours at some other type of resturant business trying to keep employees from stealing your money .
GOOD LUCK
y'sguy is offline  
Old 02-06-2010, 04:38 PM
  #17  
Senior Member
 
Join Date: Nov 2005
Posts: 10,223
Default

Originally Posted by y'sguy View Post
I have been in construction my whole life and this is really bad now and most likely to get worse . A good small hot dog stand with homemade chile and onions will allways do great in a good location without spending all your waking hours at some other type of resturant business trying to keep employees from stealing your money .
GOOD LUCK

Hot dog stand with running water, electric and a gas line is OK, without you've got a hard time passing health codes, taking a piss, washing your hands after you sneeze etc...

Also having heat is nice! If you get your stock delivered it will cost more, if you pick up your own BJ's, costco, etc. add a couple of hours onto 2 days a week and a bunch of room for storage.

It's not that simple. I have first hand exp. Oh did I mention ice? where will you get ice?

You need Gas, electric and running water!
08087 is offline  
Old 02-06-2010, 04:57 PM
  #18  
Senior MemberCaptains Club Member
 
Join Date: Nov 2004
Location: Amelia Island, FL
Posts: 4,667
Default

Originally Posted by chrisrack View Post
Look at a Chik-Fil-A.

The places are always packed. They have a great reputation. Healthy food. Fast service. Great support from the corporate office and you can buy-in for $5k. Tuf to get "in" though.
You are correct that Chik-Fil-A is a great company and restarant, but I would be surprised if you were correct about $5,000 to buy in. Truett Cathy started Chik-Fil-A here in Ga probably 60+ years ago. They are everywhere and always busy. I would think more along the lines of $100,000- $200,000. Like I said, I don't know, but with their success ($3 billion in sales last year) I don't think $5,000 buys you anything.

I may be wrong.

Last edited by Reel Boobs; 02-06-2010 at 06:46 PM.
Reel Boobs is offline  
Old 02-06-2010, 04:58 PM
  #19  
Senior Member
 
Join Date: Jun 2009
Location: Corsicana, Texas
Posts: 133
Default

While there are many funny recommendations, Have you thought about becoming a nurse. 1 year to an LVN 2 years to an RN. Starting income is great and your 25k would pay for the schooling. You could work as much or little as you wanted. Buying a business for 25k, would just be a loss of cash.
Capt Craig is offline  
Old 02-06-2010, 06:13 PM
  #20  
Senior Member
 
Join Date: May 2009
Location: Australia
Posts: 2,009
Default

Originally Posted by Capt Craig View Post
........2 years to an RN.
Is this correct? Full time I guess. What schools can you get from zero to RN in 2 years? I always thought it was longer than this.
rat_catcher is offline  

Thread Tools
Search this Thread