Monthly Update – April 2018 – Buying Up Is Better Than Starting Up
Featured Clients this issue:
**Details of each client below article
– Pair of Highly Profitable Fitness Centers #318 & #418
– Distribution of Building Products #518
– Specialty Automotive Repair #618
Buying Up Is Better Than Starting Up
Every year, hundreds of thousands of entrepreneurs begin their journey into business for the first time. Many businesses start every quarter, but almost as many businesses meet their demise. Starting up a new company (building something from nothing) is a huge undertaking with a significant failure rate. Fortunately, there is another way to venture into business that can provide many benefits, including lower risk of failure for the first time entrepreneur.
Chart below refers to births and deaths of business establishments:
Buying an existing business is a great way to get started and, right now, as baby boomers are retiring, the market is well-positioned to take advantage of the increasing amount of businesses continuing to hit the market year after year.
The Benefits of Buying an Established Business
Customers: A currently operating business will have an established customer base. You won’t have to speculate where the clients will come from, you should have historical data that will help you know what to expect, and real customers will be coming to your business from day one.
Vendor Relationships: Sometimes establishing relationships with key partners can take years. But if you are buying up instead of starting up, those important pieces of your business are already in place.
More Money Now: Experienced entrepreneurs often say that it can take three years before a new business starts to make money, which can be a real problem for many people. A great advantage to buying a profitable, established business is that not only are you making money right out of the gate, but you can estimate the expected cash flow based off of your new businesses’ past performance.
Financing: Obtaining financing for an existing business can often be easier than raising money for a startup. As the business has a track record of making money, bankers are often much more comfortable lending to someone who can show that their business has the ability to service debt.
Time to Focus: Because your newly acquired business is already up and running, more of your time can be spent on improving the business. Your entrepreneurial drive can be focused on the important parts of the business, instead of being weighed down by all the details of building everything from scratch.
Finding The Right Business
If you are interested in purchasing a business, The FBB Group can help. We maintain an inventory of businesses for sale, as well as offer Retained Buyer Searches that can assist you in finding a business. Contact us today to discuss options to help you meet your goals and objectives.
The majority of our business is derived from referrals. Please consider referring our services if you encounter a situation involving the potential purchase or sale of a business.
Ronald V. Chernak
Inspiring business relationships since 1982!
Pair of Highly Profitable Fitness Centers #318 & #418
These two well-established, non-franchise fitness centers have demonstrated increased profitability year after year. Location #1 opened its doors in early 2009, became profitable very quickly, and continues to consistently generate good cash flow. Location #2 opened its doors a few years later, has been profitable the last three years, and has plenty of room for growth. Both locations have well-trained managers and staff already in place taking care of the daily operations. The management team prides itself in having a clean and friendly environment, which explains the high use and membership retention rates. The asking price is for both locations, but the sellers will entertain the sale of each location separately.
This company has been serving Colorado for more than 30 years, providing contractors and homeowners with high quality doors, custom doors, windows, hardware, and trim for new home construction and remodels. The real estate of 3+ acres and approximately 16,000sf under roof is available to purchase with the business. The ideal acquisition candidate would be a similar business looking to expand into the area.
Providing over 55 years of quality service, this highly respected and well-maintained full-service automotive repair shop primarily services high-end foreign model vehicles. With no active advertising, this business brings in customers based solely on its reputation. The real estate for this business, valued at $249,000 (subject to appraisal), is to be purchased with the business and is included in the total asking price of $448,500. This business currently operates with two vehicle lifts and there is opportunity for expansion into the adjacent property. Owners retiring.