I am interested in buying a business. My business broker has found a business a service station that costs roughly a million bucks and has adjusted net of 350k. Is this a smart business? I would have to get a SBA loan to pay for it. But I would be millionare once its down and have very nice lifestyle. Has mart/mechanic/propane and gas. New tanks great location. It seems to good to be true. If it fails I will go bankrupt if it works I will be rich. Is this a stupid gamble? I have retail expierence and have lined up other managment to help so I am not worried about that.
2007-03-09 04:58:16 · 5 answers · asked by v s 1 in Business & Finance ➔ Careers & Employment
Any cash based business is very hard to nail down exactly what their net take is for real. It is very very easy to cook to the books on a cash based business.
Caveat Emptor - buyer beware.
2007-03-09 05:08:56 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Risk is acceptable in business, as long as it is calculated risk.
That said, work to mitigate your risks:
I would guess that you are going to be offered a franchise of some sort, ala Shell, Valero, or similar.
Do the research on the contract and read the fine print and read up on franchises in general. They can be complex, and don't be afraid to plunk down the costs of a lawyer to examine the contract. Depending on your circumstances, you can deduct this expense on your taxes, ask a local CPA about the specifics.
You have retail experience, so the general handling of the business should be not too bad, but I would recommend maybe looking for a trade magazine particular to the segment. There always seem to be SOME magazine that specializes in sub-segments of industries. You might not learn much that is new, but if you are plunking down a LOT of money, a small subscription to further invest in specialized knowledge about thisbusiness is a prudent investment.
As for whether or not to do it:
Do it. This is not a stupid gamble if you do your homework, and you seem to have a good grasp about the ultimate risks.
Regards,
RG
p.s.
Keep in mind the basic accounting equation:
Equity=Assets-Liabilities. (think of equity as net worth)
You aren't technically a millionaire until you have a net worth of a million dollars after you factor out all the loans/liabilities.
2007-03-09 13:20:48 · answer #2 · answered by Random Guy from Texas 4 · 0⤊ 0⤋
If you have to ask on YA answers I would say, someone is selling you something fishy. I don't think Trump, or Gates come here for advice. Best of luck.
2007-03-09 13:03:32 · answer #3 · answered by crct2004 6 · 0⤊ 0⤋
i don't know what the business is so i can't tell you if it would be a good investment or not!
if your worried then don't do it!
2007-03-09 13:02:50 · answer #4 · answered by Anonymous · 0⤊ 0⤋
DO WHAT YOU WANT...
2007-03-09 13:06:26 · answer #5 · answered by †If he only knew† 4 · 0⤊ 0⤋