Buying a business -

[DyerWolf]

Anyone own your own business?

I've thought about buying an on-going concern in the construction / remodelling or light manufacturing sector and wanted to know your experiences.

I live in a mid-sized US city (@ 250k city pop, @ 1M metro) with all that that entails re services, needs, etc.

Anyone running a business you enjoy? What do you like, dislike - and what are the pitfalls?

[Fazor]

I run a Panda fighting/inporting/exporting buisness out of the back room...but shh. :whisper:

No, I work for the man. But my g/f's a photographer. We've talked about opening a studio. Just don't have any capital to start such a project. If I can ever convince her to move to Tenessee (my first choice, but she hates it) or Virginia (my second choice, and she likes it), then we may consider it.

[Spock Jenkins]

After underwriting small business loans for a while - I offer the following:

Make sure you get a proper business valuation and historical financials from the current owner (seller) BEFORE you fall in love with the business and the idea of being a business owner. I've seen far too many people willing to substantially over-pay just to have a part of "the American dream". The other mistake I see a lot of is the buyer convincing themselves that they will double the previous owners revenues because somehow they know what that person was doing wrong and they are the first ones to come up with the idea of web based advertizing.

[Spock Jenkins]

Owning a business isn't a great way to build wealth unless you're generating sufficient excess cash flow to allow you to save and invest outside the business. One exception is if you own the real estate your business operates out of. Otherwise, all you have are depreciating fixed assets and goodwill. Almost without exception - business owners all think their business is worth way more than historical sales and profits warrant. In addition - small business customers tend to be far more loyal to the business owner than to the business name. There are few guarantees of repeat business from existing customers for a service type business.

[snarkophilus]

I ran a painting/reno company, once. It was too much work, not enough reward. Maybe once you get settled in, have a solid customer base, et cetera, things get better, but the first year was really rough for me (and seems to be for everyone). Dealing with customers sucks. Dealing with suppliers sucks. Dealing with the government sucks. If you have a franchise, then dealing with the owners sucks. Employees suck the most of all.

Most importantly, if I ever do it again, I will *not* allow an external company to deal with my payroll. In fact, I will probably not have employees until the business is big enough that I can hire someone to run the whole thing and I can just step away and collect profits. Until then, my payroll will consist of me, and only me. I will not have a franchised business unless it is a gigantic corporation, like McDonald's.

Also, what Spock said about business valuations. That would have saved me a lot of grief. Not just market valuations, but make sure the business hasn't built up a lot of ill will in your area. I spent half my sales time convincing people, "no, the old guy has nothing to do with this company any more."