Businessesforsale.com

[Assegayer]

Hi, I have seen many different posts on the website businessesforsale.co.uk, i have about 50k cash that i am looking to purchase a business with. Them so called profitable websites i dont fall for by the way.

however i have seen laundrettes for sale, fish and chip shops, hardware stores etc. But i just sit an wonder why would you sell such a business if it is bringing in a decent income , is it irational of me to think that if i purchase a business for say 50k i could get back 30k profit? because thats what i see on some of the ads there.

also i keep hearing about the leasehold however i dont know to much about it. e.g. is it more cheaper because the lease is coming to an end? what is the catch.
I would reall appreciate someone with experience to guide me on these topics and maybe even suggest another way if there is

Thank you very much in advance

 

[Mitch3473]

I think the idea is you pay 50k for the business which is earning '30k per annum' in profit...and 30k the next and 30k the next and so on and so forth. You get your money back after nearly 2 years, assuming a) the forecasts and books are correct and b) you dont mess it up......... and hey presto you're in clover from then on in.
My business is bringing in a decent income but I'd sell tomorrow if the price was right. I might be getting divorced or just generally fed up, I might fancy a change or a new challenge, I might want to retire or I might want to take some mug to the cleaners....there are hundreds of reasons why someone should sell a profitable business, your task is to find out why......and then believe them.

 

[bounce]

What kind of business are you looking for.

 

[garyk]

The thing is in many cases you are 'buying a job', if the business is grossing 30k and the you have to employ someone not much coin left is there, unless you end up doing it yourself and putting the hours in.

Nothing wrong with that of course, depends on what you want to do and if you are happy with the income.

 

[Assegayer]

Thank you all for your replies i really do appreciate it..
To be honest i am looking for something like a laundrette where off course you still have many issues to keep under control but not as much as other business trades. I would like to work in my normal job and have a supplement to my income even if it were just 20k profit. Wouldnt mind someone looking after it here and there.

 

[Assegayer]

Even a fish and chip shop were a manager can keep things under his eye while i do the pushing of the business . I know the business cant run without good push

 

[ecommerce84]

There was a hardware shop local to me that was up for sale for a similar amount and making a similar amount of money and it was up for sale quoting retirement as the reason.

I went and had a look (not official just to browse the shop) and I could definitely believe that was the reason behind it.

Don't forget that the £50k is usually just for the business and that stock and fixtures and fittings are on top of that unless specified. In the hardware shop I would imagine there is £30k worth of stock at cost price, so that money would have to be found as well. I'm not sure if the equipment in a laundrette or chip shop would be included in the price of the business but I wouldn't have thought so, so do check.

 

[Clinton]

I have several good friends who work for BusinessesForSale.com, and I contribute the occasional article to their site about valuing / selling businesses.

And BusinessesforSale does have some nice businesses listed, but it does also have a lot of dross. Bear in mind that they don't vet listings so a lot are from unrealistic, clueless owners who don't have a viable business but still want a million quid. And some are outright scams.

@garyk is right - many of these are not businesses, they are jobs, and the claimed profit figures would completely disappear if you were to pay someone to run the business for you.

Unfortunately, at the £50K price point those are largely the type of businesses you'll come across. Especially among dry cleaning shops. They'll make a £50K surplus of revenue over expenses but won't tell you that the owner works there full time - that's six days a week to you - and takes on all kinds of other work as well (sewing, zip replacing etc). She even takes that work home with her to do on Sundays. And she is paid just enough to cover the NI stamps / the tax free personal allowance. Once you take over, you'll need to create at least 1.5 full time jobs to cover that work... and you'll need to pay those employees at least the minimum wage. And are you really sure these employees will be as motivated to run the place like the previous owner was running it? And will you still be making a profit after paying 1.5 salaries?

Them so called profitable websites i dont fall for by the way.

Them so called websites are, actually, the best opportunities in the sub £100K market ... if you know what you're doing and can pick the right ones! Over the years I've bought numerous such sites and made a seven figure income out of them.

£50K isn't very much and if I were you I'd be looking not to buy a business but to take a share in a business that needs a £50K cash injection to expand. The continued presence of the previous owner driving growth will give you a better risk/return on your capital than you'd get buying a launderette and sticking a minimum wage employee in there.

 

[Assegayer]

I had a look at some of the businesses today and enquired about all the things mentioned on this very help thread.The fixtures and fittings in the laundrettes that i have seen so far are included, however in diy hardware shops only the fixutres and fittings are included and not the stock itself. thats subject to evaluation.

That is very good point brought up regarding employing staff because after enqiring more into the businesses that interested me, most of them were run by the seller them selfs, and occasionally there wife and son/daughter aswell.
So would it be rational in me saying that if i found for instance a business that is making 1500 pw profit with the vendor working there, i could maybe employ someone instead and off course reduce my profits to about 1000pw? off course the employee as expected will not be 100% reliable due to sick days etc but i could cover that here and there.

Lastly regarding purchasing shares into a business I am genuinly interested in doing that however i just do not know the way of going about it. Also would you see a decent return from purchasing shares in a business? also how often are you payed out for your shares?

Thank you all for your informative replies

 

[stender]

A lot of them you are paying for the remaining lease as a chunk of the price. Don't forget rates on top of that.

 

[stender]

@Clinton what are the sites you are referring to? I would be interested in becoming a business partner of something I think isn't running to it's full potential.

 

[Clinton]

@Clinton what are the sites you are referring to?

The jewels you can filter out of the flotsam and jetsam at online marketplaces from Flippa to BusinessesForSale.

I used to write about how to do that and have hundreds of pages of advice on this site. I also founded and built a forum that has the world's top discussions and advice on buying online businesses. Happy researching!

Lastly regarding purchasing shares into a business I am genuinly interested in doing that however i just do not know the way of going about it. Also would you see a decent return from purchasing shares in a business? also how often are you payed out for your shares?

You can pay yourself a salary or you could pay dividends out of the retained earnings. You could take it in one lumpsum or split it into weekly / monthly payments. How often you take the money out is the least of your problems.

Finding the right (and safe) opportunity in which to take a minority stake is the more difficult part. Be prepared to pay well for good advice ... if you can find it. Thousands of pounds. The problem is most investors kinda fancy their own skills and 99% of them probably don't/won't pay for expert assistance with deal sourcing ... far less paying for competent advice on matters like redrafting the shareholders' agreement! They wing it ...and then often end up in trouble.

 

[Assegayer]

A lot of them you are paying for the remaining lease as a chunk of the price. Don't forget rates on top of that.

what do you mean by paying for the remaining lease?

 

[Assegayer]

thats the one thing i get very confused about, the leashold! say a business is being sold with a remaining secure renewal lease of like 6 years, does that mean after 6 years i have to pay a certain amount of money ontop of the annual leasehold rent? also is it bad to buy when the lease has so little left on it?

also is a secure renwable lease actually secure?

 

[Clinton]

Leases explained

 

[Madseller]

I recently bought a online business for my wife - providing party supplies. It was making the owner about £25K a year and I paid her £20K plus SAV. One of the best investments I have ever done - we changed the web site (upgraded it to Shopify), increased the ranges slightly and she on her way to making about £30K in her first year of trade.......... of course I'm still owed my loan......but hey.............you cant have everything!

 

[garyk]

@Clinton what are the sites you are referring to? I would be interested in becoming a business partner of something I think isn't running to it's full potential.

You wouldn't be a partner you would be buying the business and/or website.

 

[stender]

No, clinton referred to taking a minority stake, suggesting there are ads for partners not just selling entire businesses.

 

[Clinton]

stender, yes I did. As a separate suggestion.

So you can buy a small online business. Alternatively you could buy a minority interest in an offline businesses.

I daresay there may even be the rare opportunity to buy a minority stake in an established online business. However, most micro businesses of this nature (the online only ones) are informal affairs and not run as Ltd companies with shareholders. So one needs to tread carefully to minimise investment risk.

Most online businesses for sale are looking for a 100% sale, not growth capital.