This transcript was generated from the episode audio and may contain minor errors.
[Music]
Happy Christmas Eve. Welcome listeners, welcome friends, welcome community. What if we could skip the whole startup phase of your side hustle and go straight to burgeoning retailer? Wouldn't that be great? You just know that ideation thing, know that trying to decide between competing ideas, none of that trial and error process, just operating a successful business.
Well, guess what? This is not an ad for a company that will soon go out of business in the next year. It is in fact the setup for today's question from a recent listener. He wants to buy an existing small business and he's found a platform, it's called Biz Buy Sell, no affiliation with us. He's found this platform that includes a lot of listings.
How does it work? What should you know if you wanna do something like this and why is the sky blue? Well, the answers to at least two of those three questions are in this episode. Once again, happy Christmas Eve. Welcome to Side Hustle School.
Detailed question and my answer coming right up. [Music]
Hi, this is Richard from Arlington. I've been listening for a while and really pondering my next steps. I found a platform called bizbuysell.com that has listings and lots of different businesses for sale. It looks like it includes everything from franchises, which I know you don't like, to small mom and pop stores all over the country.
And of course there are lots of online businesses. What do you think about this instead of starting my own if I have enough capital? Might this be a smart way to invest? Thanks for your advice. Have a great day.
[Music]
Hey Richard, thanks for the question. So bizbuysell, they are definitely a big platform for business sales, essentially. And there are others, including eBay in fact, you might not have ever thought about buying a business on eBay, but you can. So if you're interested in this platform or another one, as I said, there's no affiliation, it's not a sponsorship deal. What do you need to know?
First thing to know is that there are a lot of bad offers out there, a lot of bad listings, like people are listing their business for sale, not because it's been a huge success, but because they want to get out of it for whatever reason. So Richard mentioned franchises, most of those franchises that are listing there, it's because they're trying to move on from their franchise business. Now there are of course some good opportunities as well, or at least there can be. What you always have to ask is, what is the cost of me starting and building this business myself? In other words, imagine that there's a business for sale for a hundred thousand dollars.
And this business brings in $33,000 or so a year in profit. And that's net profit, which is really important. It could be bringing in lots of money and revenue, but if it's not profit, it's gonna take you a very long time to earn out. But in this scenario, after three years, you'd have it paid off, at least theoretically. And of course it's not always that simple, but for the sake of an example, well, what would it cost for you to start and build the same or a similar business to that level?
If you could do it in a year for less than $33,000 or in three years for less than a hundred thousand dollars, in this hypothetical example, you'd be better off doing it yourself. So my point is that it's hard to make comparisons when you're shopping for a business for sale. I tend to think that people with more experience are better suited for that, kind of like Shark Tank or investors who have been through multiple business experiences. If you're just starting out, I tend to think, why not build your own? So I'm sorry that there's not a fast track shortcut.
Like I said, there could be some opportunities there, but there's also often a good reason why someone is trying to move on. And that reason is not always, wow, what an amazing deal for someone else. It's often because that business is changing or devolving in some way that might not be good for you to spend a lot of time on. That's my two cents. Of course, take it for what it's worth.
Most importantly, know that I am cheering you on whatever you do. I hope you'll continue to join me for the rest of this year and next year, new season coming up soon. My name is Chris Guillebeau. This is "Side Hustle School." [Music]
From the "Onward Project."
