Long Search for Aspiring Business Owner
Nick Vail has been searching for a business to buy for nearly 15 months and he hopes the searching will pay off soon.
Vail, 31, worked as an accountant for First Citizens Bank and then became a partner in Maritime Market, an independent grocer in Bald Head Island, North Carolina. When he assessed what he wanted most out of a career was financial freedom provided by a certain amount of cash flow, he also concluded that climbing the corporate ladder would not get him there any faster. Buying an existing business seemed a savvy way to meet his professional and lifestyle goals. However, after casting a relatively wide net from Boston to California’s Bay Area, Vail expresses frustration that he is not yet a business owner since starting his search 15 months ago. After all, he has small business experience and has access to financing up to $1 million.
Like nearly 50 percent of Americans, Vail says he dreams of owning a small business. He caveats this by adding that he is not a “startup guy. I have plenty of ideas for startups but I’d rather get involved in something less risky that allows me to do the things I want to do with my free time”. For example, he hates declining a night out with friends because it won’t fit in the budget. He wants to get up and travel on a whim and stay at nice hotels. Vail says he needs around $200,000 in after-tax cash flow to reach his goals. He is looking at businesses generating around $1.5 million in revenue with cash flow of around $500 thousand. That is a company’s net profit before paying the owners salary and company taxes. To secure this cash flow Vail expects to pay around $1 million. His search process started looking at businesses in Boston, then North Carolina, California, and Florida as far as Key West. Vail does most of his searching on the leading business listing website, bizbuysell, but complains about the lack of options and opaque company information tightly guarded by business brokers. Company valuations are also a common pain point in small business transactions. Owners ubiquitously perceive their companies to be worth more than they are by market standards.