That’s a large chunk of change. That’ll buy you a really nice house where we live or I could splurge and get a used Ferrari. (I would never really do the latter; the Personal Finance Gods would disown me. Not to mention, my wife too.)
That would have also gotten me a fairly successful existing business that’s established in a certain niche industry that I have experience in. I won’t go any further into details like that since I still have a working relationship with the owners.
It seemed like an awesome opportunity at first.
We would have gotten everything; the machinery, intellectual property, licensing deals, raw materials, the e-commerce website, social network profiles, and about $130,000 in sell-able inventory.
It could have been a great deal. The passion surely was there. This was the self-employment opportunity that the younger me would have killed for.
But it just didn’t make sense. There were some red flags with the numbers and the financial and time commitments that I’d have to make just weren’t viable at this point in my life.
The business averaged $450,000 in yearly revenue so $200,000 seemed to be a bargain. But once I realized that their best year was over $850,000 in revenue and they made $275,000 two years ago and were on pace to make only $175,000 the current year it just didn’t make sense. They said it was because they took on other responsibilities and because of family issues, which are reasonable, but made me hesitant.
Because of the price tag of the business, we wouldn’t have been able to pay for it outright so we’d have to get an SBA loan. I shopped and shopped around with various banks and most of them sucked. The only bank that worked with me was a smaller bank where I have my business checking account. Everyone else probably just saw me as some kid who doesn’t know much. If they only knew…
Anyways, the down payment that would have been required would have totally wiped out our savings. We worked long and hard to get it to the point that it’s at and we just weren’t comfortable putting everything up. It was just too much risk.
There would have been a whole bunch of additional costs involved with purchasing the business. We probably would have had to rent a workshop or at the very least a storage unit.
Logistically, it wouldn’t have been easy but we probably could have figured that out. That would have taken some time which brings me to the next reason as to why we didn’t go through with the purchase.
I actually like my job. This wasn’t always the case, but, I’m at a place where I really enjoy my work and feel like I could really progress and make a difference. It’s not the end all, be all, but I could see myself there for a large portion of my working career.
The good thing about my job is that the hours are very much seasonal. The bad thing about my job is that the hours are seasonal. I work 40+ hours a week for half of the year and take it a little easier for the other half.
This works out for the most part.
I don’t have much time for anything for half the year but I have a lot of “free time” for the other half where I really work on the blog and my side hustles.
This set-up wouldn’t have worked out if I bought the business. The owners said that they each put in about 4-6 hours a day so that would put me at about 60+ hours during busy season at work which would burn me out real quick.
That’s just no way to live.
It would have put unnecessary stress on our finances and our time.
My friends who have bought pre-existing businesses advised me that you’re just inheriting other people’s problems when you buy their business and that they wish they would have started out small and grown their businesses their way.
So that’s what I’ll do.
I’ll bide my time by working at a job that I enjoy and work on this blog and my side hustles in my spare time and I’ll see where life takes me.
It’s more fun this way. And probably a lot less stressful.