Good time to buy business?

Everybody is talking about the imminent collapse of the economy, can i take this as an opportunity to open a small cafe? The current owner is wanting around $200000 for it. The cafe makes on average around $12000 a week, rent is very cheap $600 a week.

i know this question is a very broad one but if i do invest in something like this and if the economy does crash will i be screwed?

so just give me a yes or no

No

People who don't have jobs dont waste money on luxuries like eating in cafes.

If you must get into business now, deal with one of the vice sectors (the legal ones, mind you...). Tobacco, Alcohol, Movies and home entertainment etc.

If you simply feel like buying the cafe, turn it into an internet cafe. I presume people will find it hard paying for their dedicated telecoms lines in about 3-6 months and will much rather spend a dollar for 15 mins to check their email and see if they have any replies to job offers etc. Just station 3-4 computers (buy em cheaply from police auctions or refurbished/ whatever) and charge $1 for 15 mins. Or add value and offer a drink and surf deal- $1.50 per 15 mins + coffee.

Do yourself a favor and get an accountant/business advisor to look at the books before you make any decision.

Just knowing the rent and the gross tells you nothing. Who's to say the landlord won't jack the rent up to $2000/month?

Asking for this kind of advice on a forum like this is not a wise decision. All you will get is anecdotal evidence.

Will you get screwed? Most likely, if you don't seek the help of objective, professional advisors.

Good luck.

Sadly in my estimation the books will tell you nothing.

The books will only tell you what trade has happened over the last X years. It cannot tell you what the trade will be like in the future. Think about why the owner is selling up in the first place...

The books, if accurate, will tell you plenty. If asked, the owner may say he is selling because of health, retirement, or some other bogus reason. If it were a truly profitable business, why not hire a manager and sit back and rake in the profits?

If cooked, the books may also give you legal footing to sue on if necessary.

Maybe you should ask your self why the current owner is bugging out - he might know something you don't. Maybe starbucks has been sniffing around the area, or as some one mentioned rent, the land lord could be making noises like he wants to adjust the rent.

If you do buy it, my suggestion would be make it into a topless greasy spoon! 19 year old nymphs frying eggs topless!!.. on second thoughts.

"The cafe makes on average around $12000 a week"
Is this before and after they pay the staff?

Also , you need to pay rent, so what exactly are you going to buy? The right to rent?

"if the economy does crash will i be screwed? " . There is no IF , the US economy is in the worst shape since Great depression. If you would OWN the place this would be great opportunity - you could simply lock the place down for the next 5 years then open it again when things are fine.


Well, i would say it is not the best thing to do then. If i would want to invest 200 000 i would wait towards the end of 2009 then buy a place I can let for the rest of my life. Here in the UK people even go into debts with this "buy to let" business - unless you fear the collapse of the US$ then you could buy sooner.

[edit on 13-1-2009 by sty]

reply to post by Now_Then

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I can just see it - a week after he opens the doors he sees a huge billboard across the street:

"Coming Soon to Your Neighborhood! A Brand New Starbucks Internet Cafe!"

Seriously, the OP needs to do a lot more homework before considering this. The questions he has asked - well, they don't instill confidence.

reply to post by dreab_boy

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NO...

Simply because no one sells a "cafe" making "$12,000" a WEEK for $200,000.

Sorry.

Doesn't happen. That place must be hoppin to rake in 12 grand a week off of sandwiches and drinks.

My bet is you need to look into this guys earnings, an established business making $12,000 a week with low over head would fall in the 1-2.5 MILLION dollar range (equipment included, licenses and such). I can tell you this because I looked into buying a pub last year and in my research I found the "good deal" really was "to good to be true."

Just be sure to research the place, even visit the cafe a few times a day every day of the week to see the volume of customers it has.. if you see it empty more often then full, chances are, this cafe is not making 12 grand a week.

reply to post by Rockpuck

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Yhea think about it, if you say the place is closes on sunday just to make the maths simple thats bringing in $2,000 a day... Say $5 for a sandwich that's 400 covers. Yep that's a popular cafe, the duds probably selling it before he dies of exhaustion! - how many does this place seat? What proportion of business is take out? Or maybe delivery... getting regular orders from offices and work places. Not sayin it's impossible, but...

The only business I would be buying right now would be one in arms manufacturing.

There will be good buys out there elsewhere, but it’s still years away IMO. We’re far from the bottom yet.

Yup, that will work.

Here's what you should consider getting into after the Obamanation is upon us: the black market. Yup. After the dollar collapses, and all those imported goods become scarce, price controls and rationing will likely happen next. And you know when that happens, big bucks can be made in the black market business. Rent a warehouse and hire some trusted loyal armed guards and fill her up with all the necessities of life that will most likely become rationed: smokes, booze, various foods. Be prepared to get into the counterfeit ration coupon business too. Big opportunity is coming for those that know how to capitalize upon the collapse of the dollar and run away inflation and limited commodities. Play your cards right and you can reap a nice pile of gold over the next couple years.