Make Money Online With Larry
Home Based Business Vs Traditional Business
As a Merger And Acquisition Specialist I would have people who would come to my office and tell me they would like to find a business that would earn them say $100,000 annually. What I would tell people is as follows:
Small businesses sell at an average Cap Rate of 33%-25%. This means a typical small business earning a verifiable $100,000 would sell on average for$300,000. But, there is more to the story than that. Most people don’t put down the whole Purchase Price in cash. They make a Down Payment and either finance the balance with Seller Financing, Bank Financing or a combination of both. Typically The Debt Service is about 25% of the adjusted Net Operating Income (NOI). So, in order to net $100,000 we need to start out with an NOI of $130,000. .
In addition the business would require about $25,000 in working capital.
So let’s see how all this plays out.
The typical terms of purchase would be as follows:
The NOI needed: $100,000
Estimated Annual Debt $30,000
NOI+Debt Service $130,000
Purchase Price ($130,000/.333) $390,000
Down Payment: $130,000
Promisssory Note: $260,000
@6% for 10 yrs.
Monthly Note Payment: $$3086.00
Annual Payments: $37032.00
To summarize : For the buyer to Purchase a business with an adjusted NOI after Debt Service he/she would need:
Down payment: $130,000
Working Capital $25,000
Total cash Investment #155,000
Execute a Promissory Note: $260,000
The promissory note is typically secured by the assets of the business and the Buyer’s personal guarantee. What that means if the buyer defaults on the promissory note, he loses the business, the down payment and the working capital and could lose all of his personal assets ie. Home, Bank Deposits,Stocks, Bonds et al.
By the way, statistics show that 80% of all start-up businesses fail in the first 18-24 months. Worst case scenario, we are dealing with a potential “Financial Armageddon”
Here’s another alternative. Start a Home Based Business. Find a company and or product/service that you can be passionate about. Start using the product and or service and enroll as a distributor. Instead of investing in a business invest in yourself by getting the proper training and education. I can show anyone who is properly trained and educated how to build a Home Based Business that will generate $10,000 a month in as little as 6-12 months.
Here’s the best part:
It usually costs only about $1500 or less to get started with a Home Based Business program.
There is some working capital needed to run a Home Based Business; but not much.
Beyond the initial start-up package there is virtually no financial risk.
The education and training can be financed on a pay as you go basis. If you find the right program the Education and Training will be included in the initial start-up package.
So, it’s safe to say that that the advent of the internet has provided almost anyone the equivalent of a miracle. Pretty much anyone can start their own business without a major financial investment and serious risk to their financial future.
So, your question should be “what do I need to get started”?
An Internet Connection
A Start-up package from the company of your choice
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