So I have the option of spending all of my college funds on buying a plumbing business with 2 full-time employees.
Here's the link
http://www.bizbuysell.com/Business-Opportunity/Franchise-plumbing-repair-company-Price-drop-only-39k-wont-last/1217791/?d=/wEFUyUyZm5ldy15b3JrLWJ1c2luZXNzZXMtZm9yLXNhbGUlMmYlM2ZxJTNkJTJmd0VGRldseVBURW1jSFJ2UFRRd01EQXdKbk53YVdROU13JTNkJTNk
It costs $42k and has a really high potential to grow. I currently have $50k saved.
Should I do this, or am I getting tricked?
>>997477
Bump, pls help me
>Asking 4chan for advice on serious investment decisions
I don't think you're cut out for this. Go pick up some proper books and educate yourself.
Just give me the dick.
Am I getting tricked?
Are you a plumber? Do you know anything about plumbing? Are non-plumbers even allowed to own and operate a plumbing business in your state?
>>997535
I'm not a plumber, but I can own and operate a plumbing business.
>>997477
1) A man should have experience in a business before he jumps in. So you should work as a plumbers assistant for a few weeks, to understand this industry before you jump in
2) Why is it for sale to begin with? People rarely sell a thriving business. Usually they get out when the business isn't making much and it's sucking the life out of them.
3) Get a look at the books. You need to see what they're making, what their expenses are, problems they are having. If the business isn't grossing at least $150k a year, then it ain't worth buying.
4) You need a written agreement that, after you buy the business, they stick around for 1 - 2 months to help you with any issues that may come up, and strategies for running the business correctly.
you're welcome.
>>997536
Just because you can doesn't mean it's a good idea. How are you going to run a plumbing business if you know nothing about plumbing?
>>997550
Thanks for the tips, I'll make sure to take a couple apprenticeships if I do in fact go through with this.
I have a question about #3 though, why wouldn't it be worth it to buy a business with less than 150k gross profit?
>>997554
I'm good at the finance and especially marketing aspects of business, so I was hoping to work with the current plumber. I would have him do the plumbing work and I run the actual HR, finance and advertising portions of the business.
>>997561
Finance? Dude, it's a 3 person business. Finance will mostly consist of:
1. Monthly bank reconciliations
2. Payroll tax remittance and filing
3. Sales tax remittance and filing
4. Running payroll
5. Income tax return
I doubt you know how to do any of these in your finance classes. You'll fuck up your company Quickbooks file, fuck up your sales taxes, and end up paying a bookkeeping firm to fix this stuff.
If your business grew significantly, I guarantee you would not have the skills or knowledge to act as controller, CFO, or treasurer.
As for marketing and HR? That's barely going to be any work given the small size of the company.
As a tax accountant who used to work at a small CPA firm, I never saw small service type businesses like plumbing where the owner wasn't actively involved and knowledgeable about the business they were running.
>>997555
because you'll have a lot of expenses, employees, insurance, things that come up, taxes.
by the time you get down to it, you'll be taking a lot of responsibility for like $40k a year.
plus there's shit that pops up.
A good example being a callback. Like you did something at a customers home, and the product failed and you have to go back there and fix it for free.
If u are a business owner, after everything has been paid, and all debts settled, and taxes, you should be walking home with over $50k a year. Anything less than this number is not worth the effort.
>>997594
>I never saw small service type businesses like plumbing where the owner wasn't actively involved and knowledgeable about the business they were running.
This. Do not buy a plumbing, electrical or construction business without having worked in the field for a significant amount of time.
I used to work in construction, the best businesses were those run by the guys who started as work monkeys and become managers of the construction site scene. Most of them take a few accounting courses, learn quickbooks at the local college and start managing. They know the products, the clients and can get the best deals because they have connections.
DO NOT BUY THE BUSINESS OP. Also, the plumbers will never respect you lol.
I changed my mind and I think OP should buy the business.
>OP sends plumbers out on call
>They do a terrible job and spend an extra hour goofing off and eating hamburgers before going back to work
>OP gets a complaint call later that afternoon
>Plumbers swear they fixed the problem correctly and client is just nuts
>OP has zero idea whether it's fixed right or not because he knows nothing about plumbing
>OP tells client he can send the plumbers back but they'll have to charge more
>Client refuses and demands they fix their crappy work
>OP doesn't send the plumbers back because they told him the work was done right
>Later that night the customer's pipes explode and the basement is filled with raw sewage
>OP's plumbers have major league laughs and refuse to fix the problem and quit
>OP's insurance has to pay out tens of thousands of dollars in damages
>News Channel Six Fraud Watch investigates and OP is publicly humiliated
>The real plumbers are still having big league laughs because they got new plumbing jobs with bosses who know what the hell they're doing
