Buy "Renovate" Sell

Discussion in 'Starting & Running a Business' started by Ace in the Hole, 3rd Sep, 2016.

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  1. Ace in the Hole

    Ace in the Hole Well-Known Member

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    Just like property, same can be done with business, only the ROI and upside has so much more potential.

    Anybody done or doing this?
     
    Terry_w likes this.
  2. Jerry O

    Jerry O Well-Known Member

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    i would be keen to hear other's story on this.
    The successful ones and the not so successful stories.

    On the finance side of things, if you buy a business. improve it then sell it. what sort of business will you be categorized in? Assuming you are not staying in the same industry for longer than 2 years because you choose to sell. Kinda hard to prove your income to get finance.
     
  3. Simon Hampel

    Simon Hampel Founder Staff Member

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    If you're buying businesses - you're not typically getting finance based on your income, since the assumption would be that you don't have a job - you are self employed and would be paid by the business. Business finance is a very different beast to residential property finance.
     
  4. Ace in the Hole

    Ace in the Hole Well-Known Member

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    I'm guessing those who do this will be buying "cheap" businesses relative to their position, so probably don't need to obtain finance to operate.
     
  5. moyjos

    moyjos Well-Known Member

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    I have bought and "reno'ed" two businesses and started 2 from scratch which are yet to sell.

    Back in the 80's & 90's I was working in Kodak Express stores and was asked if I wanted to buy the one that I was managing at the time. I jumped at it :) It was one of a group of 5 or so that the owners were really not running very well at all. All the ideas that had been rejected by the previous management proved to be good ideas when I implemented them. I double the turnover in 6 months and doubled again over the course of the next 12-18 months. That shop was sold for a very good profit after I had owned it for just over 2 years And it had paid me the same wages as my previous management wage.

    Finance for this store was a redraw on our mortgage.

    I bought the second Kodak shop from a friend who wanted to a different business. He didn't work in the store full-time and was having trouble with staff. This one took a little longer to double due to the fact of one "difficult" staff member that took a lot to get rid of. :( We estimated she cost us $50k in lost sales in the 6 months it took to oust her. That shop was sold after 5 years, the decision to sell was the introduction of digital. I knew it was time to get out while the business was still worth something. I sold it to a photographer who didn't believe digital would take off.. He did manage to hang on for about 2 years before he went belly up owing the shopping centre a heap of unpaid rent. Finance for this was the profit from the first shop


    We started hubby's business from scratch in 1995 while we lived in Brisbane. When we moved up to the Sunny Coast we closed it down and sold the Real Estate contacts and the phone number we had to a mate in the industry for a decent amount. After nearly 2 years off, hubby decided he wanted to start up again. We turn 10 here on the coast next week :) We did not need finance for this business either after the sale of my 2nd shop.