How does one buy an existing business?

[rdlo]

What is the name of your state? CA

I want to own my own vending route business. There is an ad in my paper of someone selling his vending route with $30,000 worth of equipment, and he's asking $12,000.

Is this a good deal? I have never bought a business before. Shouldn't I be able to get a loan easily against the equipment without needing any other collateral? Would the bank consider only what the business earns, or will they have to consider my credit, income and employment history?

Thank you.

 

[Some Random Guy]

Ask around

If you know nothing about the vending business then plan on getting screwed.

1. He has $30,000 in equipment. Where did that number come from? Retail, depreciated value, what he actually paid for it?
2. What condition is the equipment? How much will need replacing and at what price?
3. Can you grow the business and how much does it cost for new equipment
4. How much money does the business gross and net per month? What proof was shown?
5. What does it take in time/money to repair the equipment when it breaks?
6. How many hours per week is the current owner working?
7. Are his answers similar to those of others that you talked to? Hint.

If you do some diligence and are still interested, then see if you can be his assistant for a day. Then you can see what the job is all about and get a feel for the volume of business generated by the machines and what condition they are really in.