Buy now or wait?
Joanne Carine, Bayonne, N.J.
I am 23 years old, am a hairstylist and the owner of my salon is going to sell the shop next year. I would love to buy the shop and would need a small business loan. I have been a hair dresser for 3 years. I live with my parents but financially they cannot help me purchase the shop for $150,000. Should I borrow the money or wait until I am older and have more experience?
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From George, St Paul, MN I don't have an answer to your question but make sure you're not overpaying for the business. 150k seems like a lot if it doesn't come with the property. Make sure you have someone run the likely income, fixed costs, variable costs, etc. to be certain it's a worthy investment.
From Altima Business Solutions, LLC First you will need to establish if the business is actually worth $150,000. The best way to do that is to hire a business consultant. We have found that somewhere in the middle is a fair price between what the seller is seeking and what the buyer is willing to pay. Next you need to write business plan which will outline exactly how you will run the business to accomodate your vision. Next determine exactly how much you can raise and if you are short request the owner to carry a portion of the loan. This will give you favorable terms and the owner will be willing to help you in the future as they will have a financial stake at hand.
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It has nothing to do with your age, first off, so don't let those who say you are too young scare you. There have been some very bright and successful young business owners.
That being said, you MUST have solid business knowledge (more important than knowing how to be a hairstylist) or someone who can coach you while you learn. Not knowing how to run a business is usually what makes business owners fail as they are experts in their field, but have no clue of the business end.
I suggest you invest in some getting a business coach to help guide you through the decision.