Although I have no real plans to buy an existing business, after a comment on my Thinking Big post I have been much more keen on evaluating local small businesses in my area. What’s their niche? What kind of overhead and time commitment does it take? What are their profit margins? And sometimes – How the heck do they stay in business?!?
I’ve also ran across a couple of sites that list small businesses for sale – BizBuySell.com, BusinessesForSale.com, and BusinessBroker.net. It’s very interesting searching in your local area – you might find a shop you frequent for sale! In reading the descriptions you can learn a lot and also see how hard it is to make a profit as well:
ColdStone Creamery in Illinois
Profit: $45,000 a year
At least it’s profitable, but still, I wonder if that $45k including giving yourself a salary as the owner. I’m betting that running a Coldstone ice cream shop takes 80+ hours a week since it’s open all the time, and turnover is high. Finding a manager that is willing to do all the work for you at a low salary would be key, but I would imagine that would be hard to find.
eBay Consignment Store in SE Florida
Monthly rent: $3,300/month
I have a feeling much less than $250k if the selling price is so low. Usually stores like this sell for a certain multiple of cashflow. Still, this is a business that pretty much anyone can figure out the basics for. You just sit there, take people’s junk, snap some pictures, and sell it! Has anyone actually used one of these services before?
Cottage Rentals in Hawaii
Now this looks more like it. Five rental cottages in paradise. Here is the actual website, a 2 Bdrm cottage runs about $200/night. At their stated 90% occupancy rate that should cover the mortgage loan, right? And you get the real estate appreciation as well. Hmm… where can I get my hands on $3,408,180… =)