Who to go to for New / Existing Business Buy-In?

asphaltgambler · 03-07-2008, 11:45 AM

I'm looking to get out of the auto business (in the near future) and into.........................anything else. I need someone professional that would give sound and unbiased advice as to what business(s) and direction to pursue.

In the past I have spoken to business brokers for direction but that's like asking which car to buy from the used car salesguy. I once spoke to a CPA that had sound info, but I'm also not sure if that is the way to go since that is not his main deal.

Don Plumley · Don Plumley's Garage

I'm happy to provide some business strategy advice, pro bono to Pelicans. PM me if you want my professional CV, etc.

berettafan · 03-07-2008, 04:02 PM

Asphalt you're right to be leary of brokers.

I'm a CPA in Md. and will be happy to answer specific q's.

The deal w/ CPA's in public practice is that they tend to see a LOT of different businesses and, over time, begin to get an idea of what works and what doesn't.

PM'ing you with my email.

LeeH · 03-07-2008, 04:25 PM

I bought, grew, sold an existing business and feel lucky to have had a very positive outcome. I've been looking off and on for another to do the same with. After reviewing many broker listings I've come to the conclusion that they all have a "gotcha." The challenge is to find the gotcha before you sign on the dotted line and determine what, if anything you can do about it. If it's a simple business that makes a lot of money it's either very expensive, or not for sale.

One business that I looked at was a warehousing company. Seemed like a great business. They just held stuff (mostly custom furniture) until people needed it. Pretty simple, right? Turns out every "employee" was being paid as an independent contractor. Seemed like a longshot that these guys would stay on if I started taking out taxes.

Another I looked at was a Porsche parts place. Seemed like a great business until I found out it was a one man show. The owner promised he could teach me everything I needed to know in a couple of weeks. Uh... yeah, right. The value to that business was all tied up in one man's head. He still owns it many years later.

Most recently I looked at a franchise auto repair shop. They were asking $200K and claimed a net of $90K. Seemed like a good deal. After I started looking into it I was soon told that it only had a net of $40K. The new price after this realization? Still $200K(?).

I think the real windfall comes if you can start something from scratch and then sell if a few years later. The trick is to build a business that's actually makes money. I'm still looking right now, but have started looking at jobs instead of businesses.

GDSOB · GDSOB's Garage

Good advise from Lee.

Due Diligence pays. Most of the small businesses for sale are incredibly overpriced. If you do jump in, make sure it has a good return without you putting in 70 hours a week. Many of these situations you get to buy yourself a low paying job and a ton of debt.

I'm just sayin'

asphaltgambler · 03-08-2008, 07:59 AM

From the few businesse possibilties that I have looked into I definitely get the feeling that no one can really define:

A) Actual gross sales and Net profit

B) Where in the growth cycle that business model is at that time

One thing I seem to have realized is I have no interest in:

A) Franchises

B) Any business resturant related

C) Any business that requires highly skiled blue-collar workers = ( small pool of potential qualified people to draw from)

Any thoughts so far on my short "no interest" list ?

Thanks!

berettafan · 03-08-2008, 08:06 AM

Quote:

From the few businesse possibilties that I have looked into I definitely get the feeling that no one can really define:

A) Actual gross sales and Net profit

Tax returns provide this. At least 3 years. And they need to be reviewed, do not just take them for fact.

Quote:

B) Where in the growth cycle that business model is at that time

Peak or downswing; that is why it's for sale.

Quote:

One thing I seem to have realized is I have no interest in:

A) Franchises

Some are just a 'job' some offer equity growth. Lots of people out there getting rich with franchises. They are proven concepts (more or less) and you have a great point of reference. People go to franchises because they are comfortable. It's why they eat at *****ty places like Olive Garden. It's why they call big name real estate co's. Lots of b.s. in the franchise racket however.

Quote:

B) Any business resturant related

Linen svcs, food distribution, trash svcs, etc. Lots of good opportunities in the service world. Agree on keeping your money away from non-franchise restaurants however. Classic way to make a small fortune out of a big one.

Quote:

C) Any business that requires highly skiled blue-collar workers = ( small pool of potential qualified people to draw from)

Sounds smart to me!

asphaltgambler · 03-08-2008, 08:23 AM

From my view point. I am a veteran auto technician, BMW, VW, Audi and Porsche as of the last 6 years. I have almost 30 years experience of every facet in the auto service industry as well. I did own my own shop back in the mid-80's and was sucsessful.

I see the auto service industry business model about where buggy whips were by the mid 1930's. Even though I have a passion and it's in my blood, I see this business as leveled out.

I want to move on and have some control over my financial destiny with-out the daily physical stress. I'm 48