yego.me
💡 Stop wasting time. Read Youtube instead of watch. Download Chrome Extension

What to think about when taking over an existing business?


2m read
·Nov 10, 2024

Every now and then, I get a friend or family member saying that they're interested in buying some type of a business. So, this wouldn't be about starting a business, but there might be an existing business. Maybe it's a convenience store, or maybe it's some type of healthcare practice. Whatever it might be, they say, "Hey, I'm going to buy this from the existing owner, and I think it's going to be a great business."

They'll often say it generates this much money, and I only have to put this much in, and it feels risk-free. What I tend to tell them, and I don't want to be one of these naysayer people, is, "Possibly." But what you always have to think about is, why are they selling it? Sometimes, there's a good reason why they're selling it. Maybe they're retiring, and they don't have someone to pass the business on to. They may see in you kind of the person that they would love to see running that business going forward. That could be a very legitimate thing.

But oftentimes, there might be a situation where they might be pumping up some of the numbers. They might be showing you the business in the busy season or on the busy day. So, I wouldn't take—especially if it's a small business that doesn't have auditing or really strict accounting practices—I would observe the business for a very long period of time.

I would take your own data as to whether the numbers you're hearing about are real. I also wouldn't discount how much effort and work the existing owner is putting into it, and what happens to the business if they're no longer there. So if all of that works out, and if it really does make sense, then yeah, you might be on to something.

More Articles

View All
Coupled reactions | Applications of thermodynamics | AP Chemistry | Khan Academy
Coupled reactions use a thermodynamically favorable reaction to drive a thermodynamically unfavorable reaction. For example, let’s look at a hypothetical reaction where reactants A and B combine to form products C and I. The standard change in free energy…
Orwell - Don’t Let Them Control Your Thoughts
In /1984/, George Orwell wrote, “the two aims of the Party are to conquer the whole surface of the earth and to extinguish once and for all the possibility of independent thought.” In the novel, the authoritarian party is interested in having absolute pow…
Biogeochemical cycles | Ecology | Khan Academy
Talk a little bit about biogeochemical cycles. The term “biogeochemical” sounds very fancy, but really these are just cycles that involve different molecules that are essential for life and how they circulate through an ecosystem. And really, how they cir…
Japanese Balloon Bombs | The Strange Truth
By mid 1944, Japan is getting hit on a daily basis from B29 bombers. They are literally obliterating cities. Japan was dying, and Japan’s only reaction to this is to strike back. Japan is faced with a serious problem: they can’t develop a high-tech weapon…
15 Things That Whisper "I’m High Class"
A general rule of thumb is that if your name is on your work clothes, you’re working class; if it’s on your office door, you’re middle class; and if it’s on your building, you’re upper class. With that said, here are 15 things that whisper “I’m high class…
15 Books To Read After You Made $1 Million
So you made a million dólares, now what? $1 million isn’t what it used to be, but now you’ve got some finance and experience to go exponential. If you’re not there yet, we recommend you go ahead and watch part one of this series, where we handpick the vid…