Business Flipper, a different approach.

[GordonJ]

Had a most interesting and engaging breakfast meeting today with an old acquaintance, from my Real Estate days.

Back then, I found out Real Estate was not my cup of tea, he, however took to it like a duck to water. So, fast forward to today.

The question and proposal over omelets was/IS...

What business can you start today and one year from today, sell for 10 times your investment?

Say you have 10,000 bux burning a hole in your Entrepreneurial pockets, where do you put that 10k so you get back 110K in a year?

Well, I always thought it would involve a HIGH RISK situation, where you could just as easily end up with nothing faster than you could get that kind of ROI. Even Bernie Madoff at 12 to 17% was a scam, so what could possibly give you a 10 times return in a year?

The answer, and the proof I got, is

start-up low cost businesses with
build out or
scalability

with a couple of players in the game, who could easily buy you out.

Before I share with you some specific examples, what is is your take on such a business effort?

Do you know of anyone who creates a business with the goal of selling it very quickly for a sizable profit and moves on to NEXT?

We've discussed serial Entrepreneurs here before, but, I don't recall any examples of someone who leverages a low cost start-up into a huge cash windfall and then rinses and repeats. Do you know of any?

Gordon Jay

I would buy an existing business.

We are in the golden age for buying existing business using very little of your own cash.

I was talking to a seller 2 days ago who when asked the question What are you going to do if you don't sell? His answer... I will shut it down. He went on to explain that he is almost 70 and he wants to move on.

[GordonJ]

Originally Posted by cash4notes

I would buy an existing business.

We are in the golden age for buying existing business using very little of your own cash.

I was talking to a seller 2 days ago who when asked the question What are you going to do if you don't sell? His answer... I will shut it down. He went on to explain that he is almost 70 and he wants to move on.

Lots of baby boomers in his situation, and many might welcome a buy from profits, contract deal, and some, will shut it down.

What Larry was telling me this morning is not unlike Jim Straw's Finder Fees in that, you look for buyers first.

He showed me a few examples of REGIONAL CHAINS of 8 to 15 units which rapidly expanded by acquisition, and some of those were new, less than a year old businesses.

And, some blogs can get very big traffic numbers too, a few of them on Flippa have recently sold for 15,000 to 45,000 bux, and have only existed for 8 to 15 months built on next to nothing costs platforms.

1500 for WordPress and hosting for a year or so, and a 15k sale meets Larry's criteria for a 10 times investment op.

But, he showed me off line deals where the numbers were 10 times that amount, simply because of the type of business AND/OR the location of the business which made it attractive to a parent company who either didn't want more competition or the location gave them a strategic advantage over existing competition. We've read about the millions of dollars for tech and such, but, there is an ongoing demand in the real world for brick and mortar and mom and pop operations which make life easier for a deep pocket company.

Taking over an existing business is a good strategy, I wrote about Tiny the tow truck driver many years ago, he is, in fact, ready to sell and retire.

I would consider buying a business, IF, I thought I could flip it quickly.

Buying a business is indeed a good option for those who want to work.

Work? WERK??!? Not for me.

Gordon

[Dien Rice]

Originally Posted by cash4notes

I would buy an existing business.

We are in the golden age for buying existing business using very little of your own cash.

I was talking to a seller 2 days ago who when asked the question What are you going to do if you don't sell? His answer... I will shut it down. He went on to explain that he is almost 70 and he wants to move on.

Hi,

I agree there is an opportunity here!

I went to an investor event last night (which I've been going to now and then nowadays - part of my journey into the world of finance)...

One of the companies which presented is a company which does pretty much exactly what you said...

That is, buy existing businesses, with owners who are ready to retire...

Now, this company looks for businesses which are making from $1m to $5m in profits. They also look for companies with an owner ready to retire, and management who'd like to take over the business, but don't have the money to buy it outright.

They help the management do a "management buyout". They provide the money. The management put up some of the money, and also own part of the business. Then, they let the management run the business without interfering, and take part of the annual profits as their share.

They get investors to pony up the cash. (That's why they were pitching last night... for investors...)

By the way, Warren Buffett does something very similar, when he buys companies outright (See's Candies, Borsheim's Fine Jewelry, and others)...

I also know of another business which also does something similar, but a little different. They look for businesses which are making a profit, but have poor marketing. They then buy the business out.

They improve or "fix" the marketing. This hopefully then leads to increased profits.

They can then sell the business at a higher price for a profit. The higher business profits justify a higher selling price.

Now is a golden time for this kind of business...!

Many successful businesses, if they can't sell, and if the owner's kids don't want to take it over, just shut down when the owner retires...

Best wishes,

Dien

[Dien Rice]

Originally Posted by GordonJ

He showed me a few examples of REGIONAL CHAINS of 8 to 15 units which rapidly expanded by acquisition, and some of those were new, less than a year old businesses.

I hadn't thought of that angle (if I understand you right)...

Sounds like a "lower risk" way to approach this...

Best wishes,

Dien

Originally Posted by GordonJ

Lots of baby boomers in his situation, and many might welcome a buy from profits, contract deal, and some, will shut it down.

What Larry was telling me this morning is not unlike Jim Straw's Finder Fees in that, you look for buyers first.

He showed me a few examples of REGIONAL CHAINS of 8 to 15 units which rapidly expanded by acquisition, and some of those were new, less than a year old businesses.

And, some blogs can get very big traffic numbers too, a few of them on Flippa have recently sold for 15,000 to 45,000 bux, and have only existed for 8 to 15 months built on next to nothing costs platforms.

1500 for WordPress and hosting for a year or so, and a 15k sale meets Larry's criteria for a 10 times investment op.

But, he showed me off line deals where the numbers were 10 times that amount, simply because of the type of business AND/OR the location of the business which made it attractive to a parent company who either didn't want more competition or the location gave them a strategic advantage over existing competition. We've read about the millions of dollars for tech and such, but, there is an ongoing demand in the real world for brick and mortar and mom and pop operations which make life easier for a deep pocket company.

Taking over an existing business is a good strategy, I wrote about Tiny the tow truck driver many years ago, he is, in fact, ready to sell and retire.

I would consider buying a business, IF, I thought I could flip it quickly.

Buying a business is indeed a good option for those who want to work.

Work? WERK??!? Not for me.

Gordon

I would def recommend that anyone stay away from tech companies. With one change in the marketplace you can be out of business overnight. We are only going to buy if there is a manager in place(or business makes enough money to hire one).

Hmmm ... Flippa for brick and mortar biz?

Nice idea, Gordon. Sure sounds [much] more profitable - and less risky - than flipping houses or used cars.

[GordonJ]

Originally Posted by Robert J.

Hmmm ... Flippa for brick and mortar biz?

Nice idea, Gordon. Sure sounds [much] more profitable - and less risky - than flipping houses or used cars.

Drapes and Window Treatments.

Flipping anything gets as sloppy as the person doing it allows it too.

In the Chattel Report, Sprint to Freedom...the blurb on licensed stuff....boats, cars, RV's trailers, motorcycles anything licensed comes with a built in slop and mess in my opinion.

Real Estate has it's own nightmares for some.

Unless it is for a sizable chunk of bread, the slop should be avoided.

Still, TODAY custom curtains and drapes and even Kanye sneakers, are selling on ebay for over a 1000 bux. Just read a story about sneakers are being targeted by thieves. I guess a pair of yeezys on a young man is like a Rolex to the gangsters of Boca. A part of their identity.

Mundane, everyday, Parade of Life chattel put into the right hands is going to be an ongoing and continuous process where a gap (PROFITS) exists between buyer and seller.

GordonJ (Mr. Mundane) A.