Looking to Purchase a Business

[mzp]

Hi All,

I am currently interested in purchasing a business in London and surrounding areas. I have around 50K cash and can borrow a little from family. I reckon if I can get some bank funding and vendor finance I'm looking at a realistic purchase price of around 200K-300K.

Ideally it would be some type of wholesale/distribution business, b2b or similar but really not interested in retail, cafes, restaurants etc. Looking for around 100K income which is relatively low-risk (meaning no huge income fluctuations and little dependence on owner). I am 30 with no business experience but can apply myself to most things and really want to make something like this work.

I was hoping a business broker might be able to advise me on whether this is realistic and do-able.

Thanks,
mzp

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[DavidAshdown]

A business broker will only want to broker a sale.

Before you consider anything, you should ask yourself what you are interested in. What sort of business would you want to run? What interests you most? It's not just a case of having money and buying shares, you will need to work at it and there's no point working at something that you have no interest in.

When you say £100k income, do you mean business income (i.e T/o) or net profit?

 

[telabadmanwot]

More importantly. You should ask yourself. Why is this (profitable) business for sale?

 

[Paul_Rosser]

A company which can give you 100k a year shouldn't be getting sold for 200-300k so if you find one make sure you check it out very carefully.

 

[LucasHart]

I think it's better for you to make a thorough business plan first before getting set for purchasing. It's really helpful to have a good picture of what you want to do and how should you do it before getting started.

 

[Christopher Ian Moulvi]

I think you need to sit down and make a list of your goals what you want out of this business ie money etc...

How about looking to maybe invest in a business! as from my personal experince a business that makes 100k per year is normally a lot of hard work my company for example it looks simple but the management side is sometime a pain in the behind i spend all hours of the night and day running my business and i make no were near 100k per year ...

I invest in small business but thats just to have a spread portfolio and to make some extra income for myself a long side my Digital Marketing Company.

 

[Clinton]

A company which can give you 100k a year shouldn't be getting sold for 200-300k so if you find one make sure you check it out very carefully.

Paul, 2-3X EBITDA is not that unusual in some sectors.

A business broker will only want to broker a sale.

Unless you hire a buy-side broker, one who specialises in deal sourcing for investor clients. They often act for HNW(high net worths) and "family offices". We have some very good buy side brokers in the UK.

 

[Paul Kelly ICHYB]

'I want to buy a business, but do not know what...'

Well done for coming here, but, until you know what you want out of life, do not waste your money!

 

[Paul_Rosser]

Paul, 2-3X EBITDA is not that unusual in some sectors.

It isn't but the OP wanted 100k income so unless they plan on taking it as salary they would need 100k left after tax so EBITDA would have to be much higher.

 

[BrighterTools]

Purchasing 100% of a business for 300K and expecting it to make you 100K per year is not realistic unless you can analyse a business that is not fulfilling its potential and you have the clear path to make it work. Small businesses usually rely on on to a few key people knowing exactly what they are doing.

I would suggest looking at the skills you have to start or fund a new business or find a business that is trouble where you can help with both expertise and funding.

 

[Clinton]

@Paul_Rosser, the OP didn't differentiate between salary and div. The impression he gave in the original post was that he wanted to put in effort (owner/manager) and take home £100K p.a. in total compensation for his capital + time.

BrighterTools makes good points. There are opportunities galore .... if you have some special skill or other input to contribute. Perhaps it's extensive contacts in a particular industry, or turnaround skills, or an ability to optimise business resources that are currently under-utilised.

 

[The Byre]

a realistic purchase price of around 200K-300K.
Looking for around 100K income which is relatively low-risk (meaning no huge income fluctuations and little dependence on owner).

Let me know when you find one of these - I'll take ten!

 

[Clinton]

I can get you at least one before the end of this month. No charge! As I said, there are opportunities galore.

If you have the finances ready and can prove it (to the selling broker, not me), send me your details by PM and I'll forward them to my broker database - the largest database of business brokers in the UK. Within 24 hours of forwarding your details to them, you'll have at least one 3x EBITDA that's being marketed as "low risk" and not dependent on owner.

 

[Mystro]

If you had 100K-200k could you not start a business from scratch? if you have the buying power you can pretty much look at many wholesalers and get 30k stock and turn a profit, but like said above if you dont know what you want you cant get advice

 

[DavidAshdown]

I can get you at least one before the end of this month. No charge! As I said, there are opportunities galore.

If you have the finances ready and can prove it (to the selling broker, not me), send me your details by PM and I'll forward them to my broker database - the largest database of business brokers in the UK. Within 24 hours of forwarding your details to them, you'll have at least one 3x EBITDA that's being marketed as "low risk" and not dependent on owner.

Has anything come of this?

 

[Funding for Communities]

Hi mzp
Two points stand out from your post
1, 100k nett income from a business costing 200-300k is being very optimistic.
2, You say you have no business experience. Therefore have you considered franchising? You could get a National name for 200-300k and it will come with a turnkey package complete with training. Just a thought.
Mike