There is this small business in my area that is for sale for ~$1.2 Million. I know that the business is a bit struggling (and I know the reasons). As a customer in the sector, I know that there is demand and I have some ideas to increase the gross revenue and the profit margins. This is an absentee-run business with ~12 employees and a manager.
I have a full time job (in a different sector) and I want to keep it. I have never run a business but I have successfully managed big long-running projects. I have a CS degree but read some books on finance and business. I am married with a kid and we have a net worth of $500k. It is a bit scary to buy a million dollar business.
Question: I am curious if anyone has any suggestion on how to tell if it is okay to buy a business twice someone’s net worth. Is it too big of a step for a first business? Any suggestion on risk analysis or minimizing the risk here?
You see the problem here is you don’t have any details on the business and you don’t even know how you want to afford this business.
Yes I know that I don’t know all the details yet. I will learn all of them if I convince myself that buying a million dollar business is not a terrible idea. I was trying to get some insight here on how big of a business one should try to buy as their first business.
Do you think it is at least worth to keep investigating or should I focus on a business more in the range of 500k?
It’s impossible to convince anyone because you don’t have the details. Please share the details.