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richardd

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Hi Richard, do you normally ask/go with Seller finance? or is it when the purchase is above certain price limit? I don't see seller finance option for small businesses<20-30k, but I guess you can always ask.
I don't normally ask for financing, especially for smaller ticket items. I guess it depends on the prices, but past history for me it's been when the businesses were over $100K. Yes it never hurts to ask if the business is beyond your capabilities based on your available capital.
 

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Dr. Venkman

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Oct 24, 2019
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I don't normally ask for financing, especially for smaller ticket items. I guess it depends on the prices, but past history for me it's been when the businesses were over $100K. Yes it never hurts to ask if the business is beyond your capabilities based on your available capital.
Hey @richardd ,

I'd like to send you a PM, but it seems that this is not possible at the moment.

I am also interested in investing in a business and other stuff.

Could you maybe send me a PM? Maybe I can't start a personal conversation because I am relatively new here?

Edit: Okay, it worked now :)
 

Bones81

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As someone who is about to leave their job and look at an acquisition myself, this has definitely been an interesting read and a thread to keep an eye on.
 

silentjay

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I've been following this thread from the start. Found it quite interesting but now it's turned into the OP looking for investors I wonder if everything at the start was just bait and now we're getting to the switch. Feeling really uneasy at this. Hope the people on here willing to throw money at the OP does their due diligence.
 

Kraelog

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@silentjay agree..

Also the fact that several very new accounts suddenly pop up in the thread and they are all extremely interested in investing, seems a bit suspect to me. (Hope I'm wrong!)
 
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richardd

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I've been following this thread from the start. Found it quite interesting but now it's turned into the OP looking for investors I wonder if everything at the start was just bait and now we're getting to the switch. Feeling really uneasy at this. Hope the people on here willing to throw money at the OP does their due diligence.
Actually one of the threads I plan on starting is how to spot scams. And @silentjay has an excellent point. I'd be uneasy too. As a scammer, I'd play a long game to gain trust. Like this thread. Typically scammers try to close "deals" quickly, and I think that is their mistake. But then again, they want to turnover scams fast to move into the next one. This type of quick sale to me is a huge red flag.

But for long game scammers, due diligence saves the day. I would vet those people with just as much vigor. I'd expect that from others with me if we were to get into any partnership.

Nonetheless, I'm not looking for investors nor a partnership. The regulatory hurdles, albeit not overwhelming, just make such an arrangement for me too much of a pain in the a$$. Think barrier of entry. And on top of managing such a venture, I just don't have the time.

So I'll just keep helping people for free. Less of a time sink and commitment on my part.
 
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richardd

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Since I'm too lazy to maintain two threads, let's talk scams! I'll start with businesses that have sales prices listed too low. Simple concept that most people should understand. If I have a business that makes $2000 a month, and I want to sell it, I'd probably list it for $40,000 or more. Most sellers target 20x monthly profit. It varies, but I think that's a good rule to start. So if someone lists that same business for $5000. Red flag! Because it should be obvious, why would a seller cash out, when they could just wait 3 months operating his business before he gets roughly that $5000? I look at so many businesses when doing my search that I don't even waste my time on these.

OK, so let's say a seller lists that same business that makes $2000 for $40,000, but it has only been running for 3 months or only has 3 months of reported earnings. The price point seems reasonable. I'd not waste my time of this as well. Why would someone who developed a startup business, especially one that apparently has become profitable very recently, turn around and sell? If I started up that venture and saw those numbers, I'd keep it for a year or more to see where I could take it. Many people on this forum alone would be thrilled starting a business that makes $2000 a month. Very few would sell it right when it started showing success.

Here's another. Google Analytics is your friend, so use it. With businesses that require organic traffic to make money, like blogs, if you see huge spikes in traffic using Google Analytics, look for where the traffic is coming from. The site should have a relatively straightforward distribution of source countries. Common source profiles would be like a majority of the traffic is coming from the US, UK, AU, CA, IN and maybe some EU states. If you see Congo or Pakistan as making up a significant part of the traffic, well you should probably re-consider this opportunity.

One more for today. I alluded to quick sales in my previous post. Do not let the seller pressure you into closing quickly! Real sellers care about their business, and should be considerate to whom they are selling. Anyone who wants to dump their business so quickly should be looked at warily. Trustworthy sellers allow for due diligence which takes time. Any seller that does not give you the time you need, or tries to pressure you to purchase now. Run now.
 
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richardd

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UPDATE: My online community/blog two days ago just had the best day traffic-wise since I took it over this spring. And I earned over $200 from serving ads, also a daily record for me. Yesterday, the traffic was a little less, but banked me $190. Not bad for passive income. I remember working as a waiter 25 years ago. If I worked a 12-hour shift (obviously on my feet), $200 in earnings was a pretty awesome day.
 

Heal Piece

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Hi Richard, do you normally ask/go with Seller finance? or is it when the purchase is above certain price limit? I don't see seller finance option for small businesses<20-30k, but I guess you can always ask.
I've made a few inquiries where the listing didn't include seller financing, but I brought it up to the seller. They have been willing if it was the right buyer. One was willing to do 50% down, the other was willing to do 75% down and the rest financed through them. Full disclosure I didn't close on either of those inquiries, but I don't think it would ever hurt to ask if you don't have the capital.
 
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richardd

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I've made a few inquiries where the listing didn't include seller financing, but I brought it up to the seller. They have been willing if it was the right buyer. One was willing to do 50% down, the other was willing to do 75% down and the rest financed through them. Full disclosure I didn't close on either of those inquiries, but I don't think it would ever hurt to ask if you don't have the capital.
That sounds like it's quite possible to get financing. I'm glad I'm not the only who observes this. Curious, are these businesses viable for you?
 

Heal Piece

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That sounds like it's quite possible to get financing. I'm glad I'm not the only who observes this. Curious, are these businesses viable for you?
I'm actually trying to abide by most of the same rules you do. One was a free stock image website but the price skyrocketed beyond 50% ROI. The other I didn't really ever plan to buy as it had physical overhead, but I wanted some practice at the due diligence and deciphering different questions I could ask about financials. I'm pretty comfortable looking over bank statements, P & Ls and merchant services statements as I have worked in banking and finance for 8 years.
 

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AgainstAllOdds

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I've made a few inquiries where the listing didn't include seller financing, but I brought it up to the seller. They have been willing if it was the right buyer. One was willing to do 50% down, the other was willing to do 75% down and the rest financed through them. Full disclosure I didn't close on either of those inquiries, but I don't think it would ever hurt to ask if you don't have the capital.
This is great advice for anything in business.

If you don't ask, you don't get.
 
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richardd

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I'm actually trying to abide by most of the same rules you do. One was a free stock image website but the price skyrocketed beyond 50% ROI. The other I didn't really ever plan to buy as it had physical overhead, but I wanted some practice at the due diligence and deciphering different questions I could ask about financials. I'm pretty comfortable looking over bank statements, P & Ls and merchant services statements as I have worked in banking and finance for 8 years.
Good action. Learn by doing. Pulling the trigger on a decent deal is the next big step, but stay true to your own search criteria. Looks like you're doing that by passing up on the stock image business. There is always the next deal.
 

Tom A

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Jul 11, 2018
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I have been watching the thread since first day. I love Richard's rules to select a business to acquire.
My target is to acquire one before the end of the year, with up to 25K down. Up to about 50K, with seller financing.

Man, I should add, I am almost worn out to go over the opportunities and elimination process. It is difficult to find a business that resonates and also fit your budget/skill sets you have.

Nevertheless, thanks much Richard! This has been an eye opener thread from day one!

Here is the list of brokers and websites I found that list businesses for sale. I am sure that are more out there, so please let us know if anyone is aware of any listing sites out there.

P.S. If you have any experiences with any of these, would love to hear your feedback as well.
 
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richardd

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I have been watching the thread since first day. I love Richard's rules to select a business to acquire.
My target is to acquire one before the end of the year, with up to 25K down. Up to about 50K, with seller financing.

Man, I should add, I am almost worn out to go over the opportunities and elimination process. It is difficult to find a business that resonates and also fit your budget/skill sets you have.

Nevertheless, thanks much Richard! This has been an eye opener thread from day one!

Here is the list of brokers and websites I found that list businesses for sale. I am sure that are more out there, so please let us know if anyone is aware of any listing sites out there.

P.S. If you have any experiences with any of these, would love to hear your feedback as well.
That's a good list. And I know what you mean, going over listings probably until your eyes start to blur.
 
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richardd

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I'm actually trying to abide by most of the same rules you do. One was a free stock image website but the price skyrocketed beyond 50% ROI. The other I didn't really ever plan to buy as it had physical overhead, but I wanted some practice at the due diligence and deciphering different questions I could ask about financials. I'm pretty comfortable looking over bank statements, P & Ls and merchant services statements as I have worked in banking and finance for 8 years.
I forgot to mention my strategy for assets like this where there is a strong possibility that the auction can go up past the point where the ROI drops below my threshold. I offer them a one time deal to reach that 50% ROI threshold. Since I am working multiple deals regularly, I am honest in that I disclose that I have another opportunity, and thus I will not be able to wait too long for them to accept my offer. The trick here is to catch this scenario early. Once the auction gets close to closing, the seller will invariably wait it out.
 

1milclub

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Here is the list of brokers and websites I found that list businesses for sale. ...
Thanks for the list. I have checked most of them and to be frank I am disappointed with the options for filtering and sorting they provide. That could be one of the reasons for your frustration. In fact, having an IT background, I feel that I should rather start a website scraping these sites and provide a better way to view and find these deals.
 
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richardd

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@1milclub Thank you for putting this list together! I've been to most of them.
 

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Ing

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I came upon a web hosting business recently that the owner wanted to sell to me for $15,000 with about $22,000 in yearly profit. It would have worked well with my current web site backup business. I would just consider it a business expense to acquire 1000+ customers who I could then re-market our current products. But even as a stand-alone, adding an extra $20,000 yearly income to someone who makes a more modest living than I would be a very good launch point for them in my opinion.
Hi, great respect!
I have question: When I buy such a online business, but don’t know much about online stuff: is it possible to learn all you need in small time or is it impossible to do such a business without already having the skills?
thanks

edit: why? Because I m afraid of online. No computer really obeys me. And I read since days for getting a affiliate program/partner for some motorcycle parts I want to offer.


Sum of the question: how long does someone have to work 9-5, until he is able to manage such an online business?

So, when I get an onlinebusyness, Im afraid to even get access to it.
 
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jon11

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Nov 3, 2019
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Really enjoying this thread and it has got my noggin joggin for sure.

One question I had was that you mentioned you would look in the 30K plus region for websites. If I had say 60k cash to invest would you suggest spreading the risk across 2x 30k sites or just a single 60k site to save on time/resources and maintenance.

The position i'm in is that i work from home in my fulltime job but i have way too much spare time so i could easily at least trial getting some other income streams up and running.

I've had a brief attempt with a dropship pet supplies shopify website but i failed when it came to getting reliable suppliers as most of the chinese guys are impossible to communicate with and they want big volumes.

Also driving traffic to the site kind of baffled me as i fell into the SEO and FBA rabbit hole and kind of got analysis paralysis.

I hadn't considered buying before as I didnt have the capital plus most flippa stuff seemed scammy or a poor ROI. Anyway I'm back on the brokerage sites but I'm noticing most of the good deals are more like 200-300k plus which is abit out of my league.

I can see alot of potential in acquiring a SaaS as I currently work in app support and my brother is a dev so I think I could leverage that. There is certainly alot of poo to wade through but there must be a nugget here and there. Anyway great information so far thanks!
 

silentjay

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Feb 14, 2013
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I've had a brief attempt with a dropship pet supplies shopify website but i failed when it came to getting reliable suppliers as most of the chinese guys are impossible to communicate with and they want big volumes.

Also driving traffic to the site kind of baffled me as i fell into the SEO and FBA rabbit hole and kind of got analysis paralysis.
Don't worry, I almost got sucked into the dropship bandwagon as well. I'm convinced the only people making money in that area are the scammy dropship course sellers, shopify and facebook.
 
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Galacticum

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Nov 3, 2019
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Don't worry, I almost got sucked into the dropship bandwagon as well. I'm convinced the only people making money in that area are the scammy dropship course sellers, shopify and facebook.
The ones that are still making money actually shut up and don't guru it out... Just saying
 

pumpking

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Sep 14, 2019
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The ones that are still making money actually shut up and don't guru it out... Just saying
Agreed. I think making such blanket statements are quite limiting. Remember that when MJ got into the limo business there were already several large limo based websites out there. I think it's more about the quality of your product, service, problem you're solving... i.e. execution.
 

payingkarma

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Sep 16, 2019
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I've been following this thread from the start. Found it quite interesting but now it's turned into the OP looking for investors I wonder if everything at the start was just bait and now we're getting to the switch. Feeling really uneasy at this. Hope the people on here willing to throw money at the OP does their due diligence.
I thought so too.. but I have it a serious thought and it may not be the case.

If it's was a pick for investor, he would say something like invest in my, you get 50% return and I keep 50% for managing the site.

Op is giving total ROI on your portion of the investment. So you get a general partner for free.

Plus he is taking all the risk on investment, and return your original inv. If it was a scan sure, which no one would do.

Third, he is going to let you behind the curtain.

I think it's an extremely generous offer. My only concern was option to buy me out and I don't get a return that good...

I don't know OP's intentions but for me this looks like a legitimate attempt at helping.
 
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richardd

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I thought so too.. but I have it a serious thought and it may not be the case.

If it's was a pick for investor, he would say something like invest in my, you get 50% return and I keep 50% for managing the site.

Op is giving total ROI on your portion of the investment. So you get a general partner for free.

Plus he is taking all the risk on investment, and return your original inv. If it was a scan sure, which no one would do.

Third, he is going to let you behind the curtain.

I think it's an extremely generous offer. My only concern was option to buy me out and I don't get a return that good...

I don't know OP's intentions but for me this looks like a legitimate attempt at helping.
Thanks. I decided not to continue entertaining this. It was becoming too high maintenance for me along with a lot of risk. I decided I'd go it alone.

I had thought it might help people be engaged in the process that I practice. But in the end, people will only be able to learn by being fully invested in their own deals.

I'll still help people independently on their opportunities. But it will be without a financial insentive for me.
 

payingkarma

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Sep 16, 2019
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Thanks. I decided not to continue entertaining this. It was becoming too high maintenance for me along with a lot of risk. I decided I'd go it alone.

I had thought it might help people be engaged in the process that I practice. But in the end, people will only be able to learn by being fully invested in their own deals.

I'll still help people independently on their opportunities. But it will be without a financial insentive for me.
I get it. It's probably not worth the hassle and regulatory nonsense.
 

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