new vs exsisting

[matteo_0144]

How do you guys feel about opening a delco from scratch vs’s buying existing? Every place i keep finding for sale things just dont add up. I can open a new store for around 120k fully equipt . looking for some opinions…

 

[pizzapirate]

Don’t think there is a right or wrong answer here. A lot depends on how much “cash” or “liquid” equity you have sitting around and the risk/reward of a location.

If you have the available cash, put it towards the best “location” period – existing or not.

There are so many opportunities to take advantage of in this economy as far as existing places go, I would be looking to take over something existing. Why take on the additional risk and stress if you don’t have to?

 

[bodegahwy]

Another advantage of buying existing is that you eliminate a competitor at the same time. If the price is right, buying exisiting is a better deal. The phone is already ringing.

 

[pizza2007]

I’m interested in what’s not adding up?

 

[bodegahwy]

Just another thought… I agree 120K is good budget to open a nice store… now you are open: How much does it cost to get the phone to ring? How long until cash flow covers expenses? What is the value of increasing the certainty that the investment will not fail?

When you buy existing, you get a proven cash flow. (You can also get headaches… so it is certainly important to check things out) If that cash flow is producing a profit it has value. If it is producing significant, consistant value beyond a market wage for a manager it has substantial value.

If you are comparing costs to open with the value of a going concern you are comparing apples to oranges to a certain extent. Even though a new store buildout is pretty, it is still just a bunch of equipment until that investment is producing.