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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.
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Lee
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