Many people looking for businesses today have no method or approach to their search. They just search the internet for anything that looks like it throws off good cash flow.
The problem with this method or rather, lack of method is that the bottom line doesn’t always tell the whole story. Sometimes the year net looks great but what you fail to see it the enormous amount of capital expenditure and the enormous amount of time it took to achieve that bottom line.
If you have unlimited funds, this may not be a problem, but most of us are not so blessed. We must purchase a business that throws off immediate or near-immediate cash flow.
Are there such businesses? Yes, the service based arena appears to be where most business gladiators find immediate or near immediate success. The swimming pool service and repair business, lawn maintenance, maid service, etc all appear to throw off immediate or near-immediate cash flow if operated properly.
The service arena, for the most part, has a small learning curve and limited hours of operation. If you fail to stay in the arena of the obvious cash cows of the industry, you may want to add the following rules to whatever methodology you incorporate when searching for the right business.
Do not accept the net income in aggregate until you have investigated each month individually. This method will help you determine the immediate capital expenditure necessary for you to achieve the same return that’s enjoyed by the current owner. The bottom line may look very appealing but until you do your homework, you cannot know how much capital it will cost you to gain your footing.
While the cash flow may look good, how much of your life must be devoted to the endeavor to realize this profit. If the business takes you away from your family for more hours than your family is willing to accept this may not be the right business for you.
Remember, cash flow is only good cash flow if you don’t have to trade everything else in your life for that cash flow.
If you have any questions about operations in the pool service and repair industry, contact one of our Sales Agents for a better understanding of business entry and lifestyle. 877-766-5757