Let me tell you something. If that sh*t is for real, I will buy it within a week. I can get 300k USD through my family, whether mortgaging my apartment in Moscow or just tapping into the rare gold coin & stamp collection of my granddad. Or if I really need to, I will just ask my dad and have him free up or get the money somehow. But I'm not a spoiled kid, far from it, and unless there is a must have once in a lifetime opportunity, I cannot justify piggybacking off my family. So now consider, if someone like me can get 300k real quick if I really need to, imagine the people that own businesses and have easier access to cash. You are talking about 50+% return business, not trading. Any businessman looking to acquire more assets would buy that on the spot if it was genuine. I think it's obvious that there is a lot more to that business. Otherwise, why would it be for sale? It just makes no sense, why would anyone sell something like that for so cheap?
50% returns in a real business isn't uncommon. The drawback is you usually have to understand all the nuances of the business. The best deal is if you can find an retiring owner who is willing to train you in the business and provide financing. You also have to look at the downside. Don't know anything about routes but I'd say fuel costs are a significant variable. Do margins get squeezed when fuel goes up? Is the net they're showing you based on lower operation costs and now they're trending up due to fuel or labor?
Almost all small private businesses are acquired from a 6x monthly net (.5 p/e) to a 24x monthly net (2 p/e) I use to buy internet businesses for 6x monthly net. Cause the tech business was moving so fast, thats all the risk we were willing to pay. So the route business would fall in between 1.5 years So its not overpriced, or is it cheap. --- The thing is you also have to <b> work</b> , So much of the net is being paid for you doing manual labour, If you broke it down where its a pure investment after paying A driver without you slaving. It would run around 20-30% which is still OK @ 1.5x NET... I do think 4x Year/Net is overpriced for routes which some namebrands are selling for. 4xYearlynet would turn into like a 10-15% roi , Really bad for a business you need to take care of daily unlike a CD at a bank where interest just dribbles in your account without you having to do a thing. That means you got to work 4 years + interest for --free-- till you have the "opportunity to work" paid off. That would be a bad investment to me.
Hydro, If you can get the money, you can make some serious cash. I can show you trucking companies selling for 2-3 million, that net profit a million, million 1/2 a year. As I said earlier man, I dont know the company you know or your family. I grew up with nothing and dont have much now. I cannot get 300k, that is for sure. Also, no one in my family that I am close to, has anything like that either. Hardly any friends could even dream of coming up with that sorta cash. I think I read that 90-95% of americans at retirement has less then 20-25k in savings. That stat alone should tell you something, people dont have 300k or the means to get it. Even a SBA loan, you need 20% down, excellent credit and a steady job and then you better have the financial statements from the business to back it up. I know of a guy, I know who he is, not a friend, not an acquaintance, nothing to me. he was in the transportation industry running trucks across the usa. He had 4 trucks (routes), he grossed 800 a day NET profit for 7 years. thats 200k a year profit, to me, thats a BOATLOAD! Hes 40 now, sold his routes (no idea how much) and bought a semi and will travel across country and sail off into the sunset. He probably has a mill or more saved. A doctor making 400k a year, pays 1/2 in taxes, he makes 4k a week if hes lucky. Your talking Dr. money. Again, if you live in Bel Air, the Hamptons, Key west, that may be shit money, but for the other 99% of americans, they would chop their hands off to make that sort of money. To most people, that is plenty to live off or work part time for the rest of your life. It all depends on your lifestyle, family, etc etc. Call them sites on Monday they got loads of them. Just remember, its a business. You have to run it yourself, hire someone who is capable of running it. If you dont, you run the risk of the parent company taking back the territory. You will have a legal mess on your hands trying to save it. Some of these places dont allow absentee owners, others do. Check into it. People sell for all sorts of reasons, health reasons, family problems, divorce, family member dying, just sick of doing what you been doing for the past however many years, maybe you hit your target to where you are well off and are ready to sell. Oh ya, and some people, no matter how much money they make, it isnt enough or they become lazy. I have friends that I have tried to tell them about this and maybe go partners in something like this, I might as well talk to the wall. Some people are not and can never be motivated, they like the 40 hour work week, making 10 an hour. Not that there is anything wrong with that, there isnt. But thats what seperates the people who are successfull and have retired early in life and vacation and maybe have 1-2 homes and those who work until 65 and live off SS making 900 a month. To each his own.
One more thing, most small business owners lets say a mom and pap store. Lets say they liked to embroider so they started an embroidery business. They are probably scraping by, paying bills, living a life that a normal 40 hour work week would give them. The benefit is they are in charge and answer to no one. Why do you think that just because you own a business you have access to cash? 90% of businesses fail in the 1st year, those who suceed are doing what they love, they could care less about buing 5 subway stores, or 2 snapple routes. Private investors probably do this on a much larger scale. If they can pool together 10 million for example, what would you do, pick 1-2 businesses or 50 smaller businesses. Most would say 1-2 since it would be much easier to concentrate on, manage, etc etc. 50 would be a large task, loads of planning required, tons of people hired to run shit, tax time would be a nightmare. Those who are lucky and own a few goldmines are content and make enough not to go and buy more. When is enough, enough? Only the individual knows that answer. If I can make 4k a week for 10-20 years, you can guarantee I would be happy, not complain, and have all I need. The house in Bel Air is not for me and never will be. If I hit the lottery it wouldnt be for me. I am simple and like simple things! Best of luck!
Something you should know. I actually have sat down with a business broker when my friend's business got approached. So I have a rough idea of their valuations and some comparables. 300k for business that nets 200k smells fishy. It should be 600k at the very least, if not 800k. So obviously they are not disclosing the real details. Like fuel costs which can probably kill that business. I might just give them a call out of curiosity.
Momma was right Say coolweb - it's almost a year since you were looking into these kinds of things. Did you ever settle on one and bite? Those routes sound interesting, but as soon as i think about them i think about a full blown trucking operation. Some locals do the thing called "Hotshot Trucking" which is a ton truck pulling a good sized flat bed hauling whatever ... air conditioners to cars. I have a friend in the Rent To Own business and washing machines is one of their best earning products. There are even publicly traded companies doing rent to own. Aaron Rents is a good example. Stock Symbol RNT You use to do oil & gas property buying and selling. That's a hot item in my area just now. Buying / selling / leasing mineral rights. Lots of gas wells going in. I sold the mineral rights on 22 acres for more than i gave for the property and should have kept them. The neighbors are earnings $500 to $1000 a month. I'm surprised you got out of the internet business. That's where i make my money, i just keep thinking how i would like to trade full time some day but i never get time. I work in sponsored search, providing feeds to sub-affiliates and I myself am an affiliate to larger search engines and advertising networks. I'd like to start something small and hire someone to run it local. Someone mentioned Subway, even tiny towns here in Arkansas have 3 or 4 Subways. They must do well, cuz they keep putting in more. Peace