Author Topic: buying a business  (Read 7040 times)

DG9

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buying a business
« on: February 09, 2013, 09:24:42 AM »
If you were going to buy a business, what type of business would you buy?  I have considered this and am curious about what the minds here would look for and why.  I was browsing http://www.bizbuysell.com for some thoughts.  Actually a small bar in my area looks interesting, but do not think that is the life I want to pursue and would not trust running it to someone else.  Something boring would be just fine. 


The Gorn

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Re: buying a business
« Reply #1 on: February 09, 2013, 09:35:51 AM »
In my hometown, it is alleged that there is a soft pretzel factory that has been in operation for 60+ years. It is located in a WWII era plat in an older ranch house in a residential sidestreet. It has daily and Saturday hours. They sell to the public, and no doubt to local events, carnivals, bars, etc. You can walk in as a consumer and buy a few fresh, hot pretzels to take home. They also have some candies and things on display.

I'd buy a business like that. A simple turnkey product, a simple process, a broad reputation in the local community... something like that would be an ideal business to buy - assuming that the debt load or the investment didn't cripple the profitability.

Almost anything else has too many variables to anticipate the future profitability. And you always have to ask "why are you selling?" and hope that you get a straight, honest answer that is plausible. "We're retiring" usually means "the business has new competition and it's hell now.")
« Last Edit: February 09, 2013, 10:05:30 AM by The Gorn »
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I D Shukhov

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Re: buying a business
« Reply #2 on: February 09, 2013, 10:31:30 AM »
Since I don't believe in having employees, it would have to be something that I could run myself, which limits the business to a one-person business.  Almost by definition it would have to be something I wanted to do, since I'm the only owner and am putting many hours into it.

 

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DG9

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Re: buying a business
« Reply #3 on: February 09, 2013, 10:50:00 AM »
Gorn, yup something like that would be good.  Definitely looking turnkey.
ID, I do believe in having employees.  I would love to create jobs!

The Gorn

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Re: buying a business
« Reply #4 on: February 09, 2013, 10:51:01 AM »
Since I don't believe in having employees, it would have to be something that I could run myself, which limits the business to a one-person business.  Almost by definition it would have to be something I wanted to do, since I'm the only owner and am putting many hours into it.

Is that objection (not believing in having employees) ideological, or a lifestyle choice?

FWIW: most business counselors consider a business with no employees to not really be a business - since the business is reliant solely on the owner and the business stops when the owner stops.

This case is more like a sole proprietorship.
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The Gorn

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Re: buying a business
« Reply #5 on: February 09, 2013, 10:54:08 AM »
Gorn, yup something like that would be good.  Definitely looking turnkey.
ID, I do believe in having employees.  I would love to create jobs!

The thing about "most" businesses for sale (the listings I've seen) has been: they are either too complicated, or they have obsolete equipment or other age or depreciation related problems that are at the core of the business, or they have little economic goodwill left in the community. In other words: they're a pain in the ass or expensive to run, train for, or manage; or the owners have bled the place dry without improving it; or locals long ago stopped patronizing the place.

IOW, "for sale" on a business is often evidence of very deep problems with the business itself.

And, almost all businesses for sale are too blasted expensive for what you are actually buying. Especially when you factor in the common downsides  listed above.

In short, you may be paying cash for a building lease and a bunch of payroll obligations and broken down equipment and a declining customer base.

A simple business you create would be a reasonable alternative to all these unknowns. Start one's own pretzel factory.

The problem with most small business is that most owners make things too complicated. That's why I like the pretzel factory.

Ditto about employees. Now, finding ones who are sober and not strung out on meth - that's the challenge.
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I D Shukhov

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Re: buying a business
« Reply #6 on: February 09, 2013, 11:49:11 AM »
Since I don't believe in having employees, it would have to be something that I could run myself, which limits the business to a one-person business.  Almost by definition it would have to be something I wanted to do, since I'm the only owner and am putting many hours into it.

Is that objection (not believing in having employees) ideological, or a lifestyle choice?

FWIW: most business counselors consider a business with no employees to not really be a business - since the business is reliant solely on the owner and the business stops when the owner stops.

This case is more like a sole proprietorship.

A business that I own and hire people whom I direct, supervise, give orders to and take for profit the difference between the value of their labor and what I can sell it for is just something I don't want to do.

I have a relative who bought a home health care franchise.  He pays people a, probably small, fraction of what he charges.  These people empty bedpans and catheters, probably wipe asses and have people cough in their faces.   He doesn't even drum up clients any longer.  A sales rep does that.    The value of the workers' labor is just about exactly what the customer is paying to the owner.

An employee-owned business is *not* a sole-proprietorship.


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John Masterson

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Re: buying a business
« Reply #7 on: February 09, 2013, 12:26:19 PM »
Something you would *look forward to* doing all day when you wake up in the morning.

DG9

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Re: buying a business
« Reply #8 on: February 09, 2013, 02:01:27 PM »
That would be the idea. That's why I would not seriously consider a bar.

John Masterson

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Re: buying a business
« Reply #9 on: February 09, 2013, 02:20:36 PM »
Yes, and that's why I wouldn't consider a retail store where I would be well-paid a stockboy and a cashier, basically. :(

DG9

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Re: buying a business
« Reply #10 on: February 09, 2013, 03:37:57 PM »
My wife always thought we should get a cell phone store.  Bleh

The Gorn

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Re: buying a business
« Reply #11 on: February 09, 2013, 07:16:28 PM »
My wife always thought we should get a cell phone store.  Bleh

Good call on that. Anything tech or content is moving, or has moved, to teh intertubez. Maybe a big name franchise or reseller with big name branding (like an independent Verizon or T-Mobile dealership) would be worthwhile. But the shops that seem to be at the solo entrepreneur level are generally little shacks or kiosks owned by some foreign guy who sells grey market batteries and cell accessories for a living.
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Re: buying a business
« Reply #12 on: February 09, 2013, 07:26:07 PM »
A business that I own and hire people whom I direct, supervise, give orders to and take for profit the difference between the value of their labor and what I can sell it for is just something I don't want to do.

I have a relative who bought a home health care franchise.  He pays people a, probably small, fraction of what he charges.  These people empty bedpans and catheters, probably wipe asses and have people cough in their faces.   He doesn't even drum up clients any longer.  A sales rep does that.    The value of the workers' labor is just about exactly what the customer is paying to the owner.

An employee-owned business is *not* a sole-proprietorship.

Well, it would effectively be so if you were the only employee. Can you get great (not so-so, not just financers, but actual working) partners effectively for what you could be planning?

After years of hanging out on forums and being in the company of IT people, I reiterate once again: I can't even find halfway intelligent people to converse with - not plan in reality, but just brainstorm - about business concepts sensibly without adding a load of their own stupid horsecrap.

Much less able and willing to act on a partnership.

You will have exactly the same problem as I have had. It's a very, VERY hard problem to find partners that think as you do. And they need to or else the partnership will blow up.

I'd personally love to see entrepreneurial home health care workers form co-ops to keep most of what they earn. Why do some not do that?
« Last Edit: February 09, 2013, 07:45:54 PM by The Gorn »
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DG9

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Re: buying a business
« Reply #13 on: February 10, 2013, 02:01:40 AM »
Quote
Good call on that. Anything tech or content is moving, or has moved, to teh intertubez. Maybe a big name franchise or reseller with big name branding (like an independent Verizon or T-Mobile dealership) would be worthwhile. But the shops that seem to be at the solo entrepreneur level are generally little shacks or kiosks owned by some foreign guy who sells grey market batteries and cell accessories for a living.

Her thought was that the mall kiosks are always humming, I would look more seriously at the ATT reseller brick and mortar route.   Then you can sell other crap too.  Trouble is I see these little places come and go pretty quickly too, some do stick around.  I wonder if they are the corporate owned sites (if there is such a thing)? 

Another model is the TV dealer, appliance store, hot tub dealer all dead businesses that specialized and jumped on a hot need/want for a period of time. Kind of like "Bob" on the 70s show, not that bright in some ways, burt made a ton of money off the masses. 

One of the relatives on the wife's side does high end "home entertainment systems" all over the country.  Nice guy, very sharp, can do any and all of it (because he has), but now employees people, gets them certified on all the vendor crap.  They feel very "important" because they are now certified in very specific vendor crap that will go away and leave them unskilled.  He does sales and runs the business.

Interesting path to success:
1 ) No college, but high IQ, photographic memory and great people skills.
2 ) Hold a bunch of very low income jobs and marry a nurse with two jobs.
3 ) Get a job pulling cable for a company that is doing what he does now.
4 ) Absorb/learn everything about the business, shift into project management.
5 ) Become best buds with sales director and get involved in the sales process.
6 ) Decide with sales guy to start their own version of this company and gut client list.
7 ) Lets sales guys go out and start company and see if clients REALLY follow him.
8 ) In a few weeks after he SEES clients go to new biz, join sales guy as a full legal partner.

For bonus points:  Same guy in buying a house will always manage to talk a seller into cutting out the real estate agent.  Here's that catch, there is always a protection clause in the contract.  If the seller gets caught they still owe the commission, but no risk to the buyer.  Are we starting to see an ethical pattern here or is it just me?  Oh, somewhere in the middle of all of this they got very into a local MEGA CHURCH, somewhere between steps 4 and 6.

« Last Edit: February 10, 2013, 02:24:59 AM by DG9 »

I D Shukhov

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Re: buying a business
« Reply #14 on: February 10, 2013, 03:01:26 AM »
I'd personally love to see entrepreneurial home health care workers form co-ops to keep most of what they earn. Why do some not do that?

I'd like to see if there are any studies about how many entrepreneurs have parents who were entrepreneurs.  Most people had parents who were employees, so from an early age they adopt employee scripts.  That's the way their parents modeled how to earn a living.  The message was, "Learn a skill.  Get a good job -- that's the way to survive in this world."

In The Coming Jobs War, the author Jim Cifton, CEO of Gallup, writes:

Quote
The coming world war is an all-out global war for good jobs.

Six years into our global data collection effort [an all-encompassing global poll of what people want most], we may have already found the single most searing, clarifying, helpful, world-altering fact.

What the whole world wants is a good job.

Clifton defines a "good job" as a job "with a paycheck from an employer and steady work that averages 30+ hours per week".  I read the book and I can't recall one instance of Clifton writing about the quality of the job.  I guess it's getting this bad.  World-wide, many people see a job, any job, as being their ticket to survival.

So being an employee, i.e. having a job in someone else's company, is not just a family message, its a universal meme.

That's the first part of the answer to the question.  And it's probably the main answer.

However, there's still the matter of knowing how to form a start-up.  How do you become skillful at business, which importantly has a lot to do with "how do you know yourself".   If you want to form an employee-owned business with others, then how do you find others whom you can trust?   

Start-ups, and employee-owned businesses are ideas that I think will become increasingly important.  We can see that entrepreneurship has become a meme.   Witness the popularity of Shark Tank.   We can also see that many people enjoy social media.   

A possible next big thing, will be social work -- as in socially working together.    We may see occasional courses on worker co-op development, which will include structuring them, finding co-founders and learning best practices in communication skills.  These courses will be included in the entrepreneurial studies specialty in business departments.

The answer to why workers don't form their own companies at this point in time is that they don't know how to.  And if you haven't acquired self-confidence and practical skills when you reach adulthood, because you don't know yourself and haven't had supportive people in your life as a child, that's going to add to the challenge.

Be Prepared.