D
DeletedUser394
Guest
My friend(s) and I are looking into buying an existing business by the end of next year (NOT in a week, next-next year). A restaurant more specifically.
Now, there are plenty of small family/mom&pop type establishments for between $20,000-$50,000 around the area we are looking.
If it's closer to $20K, we can cover it completely. (if not maybe we'll need a $5k loan at most).
But there must be other expenses to consider.
Should we have a few months worth of operating expenses to cover rent/stock, etc or would a line of credit cover that?
Seems like $20K is dirt cheap to buy an existing restaurant, but we've found at least two dozen. I'm trying to find out how we need to value the true cost of the business.
Yes, this is not fastlane, but it's what we want to do, and we're young enough that if it folds, we can recover. After a transition period, my role will be almost exclusively 'investor' status, so I won't actively be participating in the business.
No need to tell me this is a stupid idea, I'm well aware. But we have the cash, and we have a goal, so it's my job to make it happen.
So again, the question is, when evaluating whether or not you can afford an existing business (any type of business) should you make sure you have at least a few months worth (if not an entire year) of cash to cover all expenses? (Even if the business is/has been profitable for years).
Now, there are plenty of small family/mom&pop type establishments for between $20,000-$50,000 around the area we are looking.
If it's closer to $20K, we can cover it completely. (if not maybe we'll need a $5k loan at most).
But there must be other expenses to consider.
Should we have a few months worth of operating expenses to cover rent/stock, etc or would a line of credit cover that?
Seems like $20K is dirt cheap to buy an existing restaurant, but we've found at least two dozen. I'm trying to find out how we need to value the true cost of the business.
Yes, this is not fastlane, but it's what we want to do, and we're young enough that if it folds, we can recover. After a transition period, my role will be almost exclusively 'investor' status, so I won't actively be participating in the business.
No need to tell me this is a stupid idea, I'm well aware. But we have the cash, and we have a goal, so it's my job to make it happen.
So again, the question is, when evaluating whether or not you can afford an existing business (any type of business) should you make sure you have at least a few months worth (if not an entire year) of cash to cover all expenses? (Even if the business is/has been profitable for years).
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