I suffer from overthinking, so I’m kind of at a standstill. My goal is to buy a pre-existing business one day, ideally sooner than later. Probably between $25,000-30,000.

I know I have to create a business plan before buying it. If anyone has any advice here, please feel free to give it. It’s not that I don’t know how to. But any additional info will help type of situation.

I know I need to ask questions to the owner before purchasing. Here’s my list:

  1. How much undisclosed debt does the business have?

  2. Do you have any liens or lawsuits?

  3. How much are the monthly bills and what are they?

  4. Do you have insurance? How much? What type of insurance covers you?

  5. How many employees do you have and how much do they make?

  6. Can I and/or an auditorlook look at your financial statements for the past 5 years? Includes tax returns, income statements, balance sheets, cash flow statements, and any current contracts or leases.

  7. What’s the reputation of the company?

  8. Are you willing to finance part of the sale for 5-10%?

  9. How do you manage the business? Do you have any daily meetings with any of your employees? Do you call customers or leave them alone after servicing?

  10. What is your marketing strategy? What’s your ad cost? How much do you spend in marketing?

  11. How do you generate revenue?

  12. Do you have a list of profitable clients?

  13. How many hours do you work per week?

  14. Are you paying yourself at all?

  15. How quickly do you get paid after servicing the client?

  16. Who are your competitors? How do you explain the differences between you and your competitors to your clients?

  17. Could I speak with some customers, employees and suppliers?

  18. Could you tell me more about your suppliers: what items do you get, how long it takes to receive the purchases, and the costs?

  19. What licenses and permits do you have and do I need them?

  20. Did you feel over your head when you started and do you still feel that way?

My list of businesses NOT to get into: anything medical, food trucks, pool servicing, cleaning services.

I am thinking of buying an IT servicing company. I feel comfortable with technology. I know there’s IT servicing companies popping up near me, so I’m a bit scared of the competition.

Another option is to start my own IT business and teach folks how to use technology, like phones and laptops. I live in an area with a bunch of boomers and older folks. The average age is 40… which I’m surprised it isn’t even older.

The issue here is that I’m working full time but out currently due to medical reasons. The medical reasons wouldn’t stop me from buying or starting my own business.

I’m working on getting my insurance license and working part-time in insurance and getting an accounting degree online. Then working full time as an accountant for a year while working on my MBA. At the same time, I really would like to start or buy a business and hire employees and manage it.

I’m not too familiar with financing, so anything on that side would really help. I’m going to try to take a SBA loan. I know there’s stiff competition in trying to get someone to finance any type of business. That’s why I’m aiming so low in price so I can maybe put a deposit for half of the cost and finance the other half.

Any advice or direction is welcome. Thank you.

  • Jnorean@alien.topBEnglish
    1·
    1 year ago

    Forget about all the questions until you can answer these two questions. Question number 1 where will you get customers and question number 2 where will you get the product or service you are supplying? Followed by why should customers buy from you at all and not buy from your competitors? if you can’t answer these questions you won’t be in business long.

  • rch5050@alien.topBEnglish
    1·
    1 year ago

    If i was gunna invest 30k in a business, It would probably be an apparel company. you can buy all the equipment need to print on tshirts hat etc. Its pretty easy to sell too.

    If you have a truck an ATM business is a sweet deal too.

    A small restaurant, mini golf, house painting, gutter cleaning, landscaping, if you are willing to work your ass off there are possibilities.

  • Competitive-Win-8353@alien.topBEnglish
    1·
    1 year ago

    You seem like you don’t really know what you’re doing. Pick a job and work your ass off in that job and then buy a business in that category. You can’t just buy a business and market it so good that it’ll be successful. Keep us updated about how it didn’t work out.

  • cajones321@alien.topBEnglish
    1·
    1 year ago

    I started my business for less. Of course I had the industry knowledge, the sweat equity, and am a glutton for punishment. It was a hellish first couple years.

    You should really consider starting a service business if that if your price range. You’ll lose that 30k in a month or two buying any business you can afford for 30k.

  • CompoteStock3957@alien.topBEnglish
    1·
    1 year ago

    The undisclosed debt has nothing to do with you unless they never signed a personal guaranteed if they did they are on the hook.

    Definitely number two about any lawsuit as that can become a problem in its self. I know from my friend who a business litigation attorney and he dealing with a complex case from one of his clients who bought a business with a lawsuit pending that keeps reopening everytime they come close to closing.

  • finch5@alien.topBEnglish
    1·
    1 year ago

    Read a book titled “Buy Then Build” it’s a great read and you’ll learn a lot.

  • Brianf1977@alien.topBEnglish
    1·
    1 year ago

    I’m sorry but did you just say 40 year olds don’t know how to use technology? A 40 year old person was a teenager in the 90s, fairly certain they had those new fangled technology things while they grew up.

  • Cheek-Life@alien.topBEnglish
    1·
    1 year ago

    You need an attorney and a CPA. When I bought my business I had about $15,000 in expenses not including down payment. Attorney fees, SBA fees, CPA fees, and appraisal I think was the bulk of it. I was also required to take out a life insurance policy for the amount of the loan.

  • Bob-Roman@alien.topBEnglish
    1·
    1 year ago

    “How do I go about purchasing a small business?”

    Very carefully, especially since you admittedly don’t know much about it.

    First step is to determine if you and the business are best fit.

    “I am thinking of buying an IT servicing company.”

    What do you know about IT?

    For example, “I’m working on getting my insurance license and working part-time in insurance and getting an accounting degree online.”

    “…Then working full time as an accountant for a year while working on my MBA.”

    Do you see disconnect between your background and educational goals and the field that you want own and operate a business in.

    How do you expect to succeed in IT when you don’t have the experience or skills to deliver the business model?

    If best fit, can you afford it?

    I did quick search and found home based, re-locatable, IT Business with a 51 percent margin, SBA approved, asking price $347,000, one employee.

    Regardless of how you try to finance this, $25K to $30K isn’t going to cut it let alone needing assets for collateral.

    I believe you need to go back to the drawing board and identify a best fit.

  • nobrokers@alien.topBEnglish
    1·
    1 year ago

    You won’t find anything in this price range, with or without financing, that will be profitable enough to hire employees to run it for you.