Choosing a business? Why not skip the startup phase?

in Forum: Business planning

Source of this discusssion: /articles/1214/1/AT_Choosing-Business-Skip-Startup.asp Page description: So you want to be an entrepreneur, and you’re wondering “what’s the best business to start?” You may not have to start it up yourself – with the amount of turnover in businesses today, you could buy an existing operation that fits your interests. With some creative financing strategies, you might just be able to afford it.

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Apr. 19 2007 at 12:09 PM
Posted by: ScrapBizKim “Quote Reply
Great article! Buying and selling existing businesses can be really confusing. But, it's a good reminder that sometimes, buying something where all the hard work has already been done can be the best way to "StartUp" ~Kim www.ScrapBiz.com My Biz Blog Where Creativity and Business Connect! My Biz Articles
Apr. 19 2007 at 12:45 PM
Posted by: Tack “Quote Reply
I agree that acquiring an existing business can be a great way to get started. I am in the final stages of acquiring a business, and I'm not paying anything to the existing owner! I have been a customer of his for a few years, and I also know the manufacturer of the products he sells. He obviously never read E-Myth, as he is a good salesman but a terrible businessman. His business is going under, the IRS is after him, his creditors are after him, and the manufacturer is revoking his license. I learned about all this and contacted the manufacturer about taking over the license. Since I know the products and industry, and have worked with them for the past few years, they agreed it would be an easy transition. I am simply stepping in when his business closes, taking over his licensing agreements, most employees, most suppliers, office leases, and his customer/prospect list. In fact, because the existing owner has collected money and hasn't yet delivered the product, he will owe us money! And the manufacturer is helping because they want satisfied customers. We are dropping the unprofitable product lines and reorganizing the business. My partner and I had to inject some working capital into the business (from home equity lines) and found an investor to put up a $150k letter of credit. I will be quitting my cushy day job and running 2 related businesses full-time. What a dream; we have an established business (that needs some turning around) and it isn't costing us a penny. Doug _/\|)_ SailTime Fractional Boat Memberships Advantage Yacht Sales
Apr. 19 2007 at 1:25 PM
Posted by: DaveB07 “Quote Reply
I looked into buying a business a few years ago. The ultimate reason I didn't go through with the deal was that they had 3 sets of books(!). But something that came up, that concerns me in ever looking into this again, was that Due Diligence would run me about $10,000. If this is so, how is anyone supposed to look at multiple businesses before deciding on one to buy? Pay $10K for each one, to take it through DD?