Home Forums Hunting & Shooting Hunter's Campfire Purchasing an established small business

Once again, used in determining purchase price or value of business only !

Figured it would go over your head.
I knew better, but I tried anyway.

Determining the value of a business is solely on cash flow you Fuqking moron

How it will be run after it’s purchased has no bearing dipshidt

Big difference between cash flow you have to work 80 hrs a week for and cashflow that requires 2 hrs a week of work. And value will reflect that.

Determining the value of a business is based on previous years cash flow. If the guy has been banking 6 figures in profits over the last 5 years, the value will be some multiple of that


If a buyer changes the way the business is run and increases his costs by having to hire someone to run it for him, that’s totally on him


Dumbfuqk

I guess your labor has no value?
I would pay more for a business that cashflows without my labor.... buying a job isn't a good gig... but hey you seem to like it.... hahahhahahahaha

You’re a Tard, Rick.

Some business's are more valuable than others due to many things , such as real estate involved, franchises, maybe a liquor license etc.... it's not as simple as just "cashflow"
Some cash flow comes at a much higher price...

So your building, real estate, furniture, equipment, dishes, supplies,electronics..... etc.
Would be free to someone buying your restaurant? You would give that away?
Your sales price would be "SOLELY" on cash flow?

Good advice for the OP. (again)

Rick would want us to believe a family restaurant in a leased building that net $ 500k a year would have the same value as say a McDonalds that net the same yet included real estate and a franchise.... and he calls us dumbfucks

Are you buying a business or buying a job?

I would have to see the numbers. That industry won’t have too much loyalty to the original owner unless you turn out to be an idiot.


What’s wrong with buying a job? Everyone who went to university did the same thing.

Ask people who have bought jobs, then turn out hating the job.... they will tell you

Another example for Rick.... lets say a guy has a one man machine shop, that is specialized and the owner is highly skilled... he nets $500k a year and he wants to retire, will it have the same value as a general machine shop with several employee's that nets the same?
I think not

Lroy, alwaysacundt, and fubar are either government employees or swinging dicks employed by someone much more intelligent than them, which isn’t any great feat. Obviously no experience owning or running a business


OP,

Consult with a qualified business broker

👍🏼

Evidently every business dosen't keep a balance sheet.

Run from it, enjoy retirement.

Look at the numbers and see if it generates the return on your investment that you want. If you have the time, money, and have a history of success I wouldn’t worry too much about it. Liking to work and make money is a plus too.

A one man operation generating cash with no employees is a good place to be right now.

I would only buy a small business I worked at for a long time and most of the customers knew me.

I get into some businesses sales in my commercial real estate sales and leasing career. I do not sell businesses just the real estate portion of them. Most people over pay and have more expenses than the original owner. Many businesses have customers that are there because of the owner. Once they are gone customers get poached by competition and the new owners have no idea how to build the business back up because they haven't worked in that businesses.

Many have SBA loans to pay for the business. Some business's have long term relationship with their landlords so cheap rent. As soon as there is a new owner rents are raised to market. Make sure you have long term lease or renewal rights especially if your business is geographically dependent on the current location.

Theres a lot of things your attorney will not know to look at. If you have worked there as a manager, know the customers , then your chances are much better of making a go of it. Not trying to be a downer here but most small business that are purchase dont make it. For many reasons.

Interesting discussion. For me, I wouldn’t buy a small business unless it was something I had interest in doing. Some skill and knowledge in the field would be helpful too.

I agree with getting expert advice to determine the value. These transactions have been going on forever, so there is a process for them. IMO, a one man service business is worth the value of the hard assets plus some fee for “goodwill”. Often the owner overestimates that value. Sometimes the prior owner would stay on a bit to help with transition. If the market there is really good, then a new startup on your own can also make sense. A nice, hardworking guy can grow a business quickly if he hustles. Good work done on time is fairly rare today.

I kind of agree with those who say you’re buying a job. It might be a great idea but don’t overpay. My small professional business has a pretty small value if I’m not there. If the owner works the business, there is mor than simple cash flow to consider. Good luck to the OP with his venture.