Hey peeps,
I am over here in Iraq saving up moolah to buy a business, and I have some questions.
Have any of you ever been in the market to buy an existing business other than a pool hall? I am thinking about buying an existing convenience store/gas station. I definitely will not trust that owner's numbers are honest, and will get a CPA to look at the business' financial paperwork.
That being said, convenience stores, from the numbers being put up on bizbuysell.com, seem to be really profitable. I am looking at a deal right now where the owner is selling for $125,000, and the business makes $150,000 per year. Normally, from what I see, businesses sell for maybe 2X gross yearly profit, but convenience stores/gas stations sell lower than this. Any particular reason why?
I also am looking at another deal where an auto repair shop is being sold due to owner moving to Tennessee, and the price is again, about 1X yearly profit.
Other than making sure a CPA reviews a seller's financial paperwork to make sure profits are in line with what they have stated them to be, what other things should I be looking out for?
My situation would be as a first time business owner, and I do not want to take a chance at starting a business from scratch and losing the whole investment. I intend to negotiate training/support as a major factor in the sale, and plan to back this up with legal paperwork. If I can find a successful business to buy, I want to make sure I can keep doing whatever made the business successful in the first place..
Any help you peeps can provide would be much appreciated..
Russ
I am over here in Iraq saving up moolah to buy a business, and I have some questions.
Have any of you ever been in the market to buy an existing business other than a pool hall? I am thinking about buying an existing convenience store/gas station. I definitely will not trust that owner's numbers are honest, and will get a CPA to look at the business' financial paperwork.
That being said, convenience stores, from the numbers being put up on bizbuysell.com, seem to be really profitable. I am looking at a deal right now where the owner is selling for $125,000, and the business makes $150,000 per year. Normally, from what I see, businesses sell for maybe 2X gross yearly profit, but convenience stores/gas stations sell lower than this. Any particular reason why?
I also am looking at another deal where an auto repair shop is being sold due to owner moving to Tennessee, and the price is again, about 1X yearly profit.
Other than making sure a CPA reviews a seller's financial paperwork to make sure profits are in line with what they have stated them to be, what other things should I be looking out for?
My situation would be as a first time business owner, and I do not want to take a chance at starting a business from scratch and losing the whole investment. I intend to negotiate training/support as a major factor in the sale, and plan to back this up with legal paperwork. If I can find a successful business to buy, I want to make sure I can keep doing whatever made the business successful in the first place..
Any help you peeps can provide would be much appreciated..
Russ
