Asking if anyone here as ever bought a business and operated it independently. Thinking some kind of small business such as a dry cleaner, car wash, or nail salon. If you did this, did you run the business yourself or did you have someone manage it? How difficult was it, and has it been successful?
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there are many posts on this topic on wso, the search is helpful.
Many WSO users own/operate small businesses.
I used to have a car wash and convenience store. now just my job, but looking to go back into the car wash industry.
okay fair, thank you.
Why did you originally get into a car wash, convenience store, what made you get out, and what made you think about getting back in?
most small businesses are NOT PASSIVE income. they require either a site manager to operate it, or you'd have to invest a lot of your time to get it up and running. Even the most basic SS car wash required maintenance, cleaning, dealing with customer complaints, and more. It was almost always a daily task. not compatible if you work long hours in finance.
Then, as the owner of a small business, you are the one person who needs to know every little bit. it's payments, IT infrastructure, physical security, accidents and liability, dealing with the council/permits, insurances, tax/filing/.., crime/theft, employee hiring&firing, and so much more. It will require a lot more attention and time than people assume.
I want to get back into it because I want to leave finance behind.
Smart. Two questions off of that:
1. Do you think you could run a profit with a site manager? Alternatively, would you think about another business where that would be possible, I have friends who do that with rental units.
2. Did you do small business before you got into finance? What is making you want to reverse that?
1) Depends on the type and size of business. Small businesses that are highly operational (laundromat, car wash, 24/7 convenience store or gas station, ..) require a lot more attention on a day-to-day basis. a gas station or a motel would have a three-tier shift model to operate around the clock. This is were it gets hard(er) to turn a profit while still maintaining adequate staffing.
i.e. a SS car wash which is well managed could go up to 22-35ish % ROI. So, theoretically, a 100K investment might lead to 22-36K or something for a full year. that might include a part-time attendant and would still be somewhat profitable after expenses, materials and tax (depending on whether you have vending, vacuums, auto or manual washes, ..).
Being profitable is easier if the business is a service you sell, but then you need to see how to win clients, contracts, .. examples:
property management, window cleaning, power washing, ..
2) I am fed up with office work. can't stand sitting in an office or do remote work. working in finance isn't that interesting in the long run.
No, I honestly don't trust my friends enough to expect a reasonable ROI. A lot of them might be lying about their success.
Be careful about trusting the books of small businesses - do proper due diligence.
I get that, one of those "if the business is so good, why is someone selling"? I know people sell for all kinds of reasons, but sometimes they are jumping off a sinking ship.
This we found the only way to really leverage one not paying cash was to do seller financing as few keep proper records and banks won't lend. So funny seeing like parking lots saying we return 250K a year but their 5-year look back is like 95K
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