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?
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.