what business would you invest on with budget upto $1M?
- Thread starter ryan_mel
- Start date
trail books are alright if managed well, but people are always shoppoing around!!
at 2.5 times thats a bit rich, i have seen books sell at 0.9-1.3 the last few months.
Thanks Grossreal, if the $1M is an accessible fund, is it enough to buy the pub which is under managed most of time by my employee? What's the minimum requirement except for funding to run the pub well?
you are asking a piece of string question.
1 mil will by a pub out in the bush but not in a cbd
and it depends what you want to do with the pub
pubs are dependant on a couple of things
1 who and what type of client you want to attract if in newtown you go for the gay or lesbian market same in darlinghurst if in say broadway then your market is students and these are very different markets and different types of pubs
so you need to understand not only the pub but the area of the pub and also what you want to market to
for me the best way is not to worry about that and be a straight equity player and leave the group that is doing the play decide on that part of the deal.
you have to decide are you equity playing or direct investing and they are very differentI can tell you a couple of plays on at the moment but thats only if you are in a position to play.
hypo are great as they do give you an idea of how these deals get put together but thats a hypo and these arn't hypo's they are real plays and most of these groups need to know which way you are playing
you can direct invest but then you have to manage as well and a pub can be alot of work
not the way I would go in this market.
currnetly most of the pubs I have had a look at are well undervalued as a norm assett so they are very interesting as a group purchase
let me know which you are looking at direct or passive and that will give me a better direction to let you know my views
and these views are not any form of advice and should not be taken as such
caveat emptor not only with my views but any view on an open forum.
1 mil will by a pub out in the bush but not in a cbd
and it depends what you want to do with the pub
pubs are dependant on a couple of things
1 who and what type of client you want to attract if in newtown you go for the gay or lesbian market same in darlinghurst if in say broadway then your market is students and these are very different markets and different types of pubs
so you need to understand not only the pub but the area of the pub and also what you want to market to
for me the best way is not to worry about that and be a straight equity player and leave the group that is doing the play decide on that part of the deal.
you have to decide are you equity playing or direct investing and they are very differentI can tell you a couple of plays on at the moment but thats only if you are in a position to play.
hypo are great as they do give you an idea of how these deals get put together but thats a hypo and these arn't hypo's they are real plays and most of these groups need to know which way you are playing
you can direct invest but then you have to manage as well and a pub can be alot of work
not the way I would go in this market.
currnetly most of the pubs I have had a look at are well undervalued as a norm assett so they are very interesting as a group purchase
let me know which you are looking at direct or passive and that will give me a better direction to let you know my views
and these views are not any form of advice and should not be taken as such
caveat emptor not only with my views but any view on an open forum.
yes but i was suggesting he could buy it and someone else with the skill set can manage it.
yes people r shopping but many cant get finance since tightening of policy so will stay where they are.
if you know of any books selling at those ratio's then please let me know as i would buy them for sure, very low risk at those ratios and would pay for themselves even if just left to run dry. very very cashflow positive purchases.
if u r buying r book at 1 times trail for say $100k, yearly interest in $7k if u finance and return approx $90k to allow for run off, thats great in my book! (haha) You pay say $50k off principal in first year and keep the $33k and do same next year and after u have no debt so it is money for nothing and your chicks for free
pubs in rocky and outskirts have quite alot of patrons was looking at 1 in rocky think costs was $520,000 with 10% return and another at kabra currently ran by owner both could be managed easily enough and are pretty popular spots I disagree with buying in capital city cbd when it comes to pubs remember 1 thing people from the bush love there beer
hi
yes they do but it is not a problem liking beer as I can tell you alot of places that like beer
the issue is volume
and volume comes with number of people there
the largest beer per person capita is campbelltown thats not cbd but they drink more then the nt guys per person that is
you have to look at trading figures and from those see what the capacity is and also how you see it increasing
most I look at are under 50% cap and look for a 25% increase
in rural areas this is difficult not impossible but difficult
if you buy but do not increase then you are at point that does not move so you are in effect spinning wheels
just my view
yes they do but it is not a problem liking beer as I can tell you alot of places that like beer
the issue is volume
and volume comes with number of people there
the largest beer per person capita is campbelltown thats not cbd but they drink more then the nt guys per person that is
you have to look at trading figures and from those see what the capacity is and also how you see it increasing
most I look at are under 50% cap and look for a 25% increase
in rural areas this is difficult not impossible but difficult
if you buy but do not increase then you are at point that does not move so you are in effect spinning wheels
just my view
DON'T DO IT !
As a business owner, would YOU employ someone to manage your business if they had NO experience ? 100% will answer NO.
THEREFORE why would you expect yourself "with no experience" to be able to run a business?
Look elsewhere, skip the buy a business idea. Stick to investing, so if you could buy in as a silent partner, investing start ups, etc, might be a better bet. Do something creative with Property.
You need to continue to play to your strenghts and not get caught up chasing cashflow and looking at anything.
Cheers
Graeme
PS yes I am qualified to come down hard on you about this, been there done that.
that's a good point of view you may of noticed that the 2 pubs mentioned are both in the central queensland area as rockhampton is the main hub for miners rural workers and lee kergan lol so there is infact quite a large population the other pub not far out from rockhampton has no competetion and is on the main highway before entering rockhampton and 10%+ on the rocky pub was the rent being paid by the publican
I had a friend that ran a pub in a small mining town and it made 4 times as much as there pub in brisbane cbd.
how about this 65k returns 500k a yr
http://cgi.ebay.com/Upscale-Escort-...tem&pt=LH_DefaultDomain_0&hash=item5d294832c7
I am currently working on flipping websites is quite lucrative with the right mentor
Thanks All very much!
I am still considering what Paul says, "focus on what I'm doing". Just wondering are there any good examples who are doing multi-business, and all of them are doing well?
If we all had the answers to your questions we would do it ourselves.
Find what you are good at, or what you have a passion for, study your competition and learn everything you can, offer someting unique, what most people want at an affordable price.... If you can find an answer to this then you will succeed.
A business is not just something that you do few hours a day, perhaps that's the way you start. It must be your passion and only you can do it yourself.
Good luck though.....
And by the way Paul is right...most very succeesful people do one thing very well over and over agian.
Ahhh another old thread.
Attachments
I've been there many times
What is this i dont even
I'd be looking to buy a (existing) $500k business, keep the other $500k as a buffer for bad times and watch the new business like a hawk for the first 5 years.
You need to also do lots of DD on the existing business to see that it is "recession proof" and "competitor proof" in your area.
For example; in our town there are two chemists, both owned by the same guy. About 3 months ago, a chemist warehouse opened up in an old servo building where the business had folded.
The chemist warehouse is going gangbusters of course, and must be hurting the chemists that already exist.
You need to also do lots of DD on the existing business to see that it is "recession proof" and "competitor proof" in your area.
For example; in our town there are two chemists, both owned by the same guy. About 3 months ago, a chemist warehouse opened up in an old servo building where the business had folded.
The chemist warehouse is going gangbusters of course, and must be hurting the chemists that already exist.
im sure its impossible to prevent anyone opening a similar business to yours unless yours is the same franchise,
I guess you have to just keep an eye on everything, and if another similar business is about to open, to sell up
That is excellent advice. No one can answer the question of what your passion is but you. When you find it, you will know it, you won't need to ask anyone else if it is right or not because you will know.
If you find your passion and are looking to start small around a day job, invest an hour a day in yourself. An hour a day will give you the equivalent of 9 full-time weeks of work at the end of a year. In my case, an hour a day, six years ago grew to a point which became 2-3 hours a day three years ago and this time per day momentum kept growing. (By the time I had read the same recommendation from Charlie Munger about investing an hour a day in yourself, I was doing 2-3 hours a day and new I was on the right track with something that suited me and I could be good at).
And, definitely better to specialise and excel at one thing which you Enjoy and can repeat instead of doing lots of things not so well.
