Where do mustachians shop to buy a passive income business?

[isaakthepirate]

Last year, I found and bought 3 automated bicycle rental stations from a company. I liked it so much that I joined their staff.  (I'm keeping the website off so as not to spam. I'm not advertising, I'm looking for suggestions). I'm now working with their partnership department, finding other people who want to buy and run stations.

This is a super-mustachian investment: it's "passive" (very low maintenance), low overhead, and higher ROI than VSTAX. And, bikes!

The problem is I'm not sure where people look to buy. We advertise on Craigslist and are advertising on some business for sale websites.

If you've bought a passive income business or franchise, how did you find out about it? Any tips?

[branman42]

Can you pm me the website? I have no suggestions for you currently, but I may be interested in it.

[tralfamadorian]

From your other two posts on the website, I would suggest getting the websites up and functional with full example financial data and well done SEO as a better first step than advertising. 

[isaakthepirate]

@tralfamadorian - You’re right about the website, but we end up dialoguing with people a lot more than via our website anyway. Our website is limited, but we want to talk to people directly anyway. From my research, most companies don’t publish their full financial data - too big of a risk.

But, if you have more experience and knowledge in this than I do, I’m happy to take your advice. Have you seen that improve leads significantly?

[centastic]

I think a lot of these "close to passive income" kind of businesses, those who are already involved tend to just expand wherever they think there will be demand. Vending machines, automatic car parks, etc.

edit: and those who are thinking of getting in usually contact the manufacturer themselves

[MrThatsDifferent]

Can you pm me the website? I have no suggestions for you currently, but I may be interested in it.

Lol, I think this was passive advertising and you just got hooked!

[isaakthepirate]

Lol, I think this was passive advertising and you just got hooked!

Lol, not my intention - I really actually need some help figuring out how to get the right people this info!
I know it sucks when people use forums for sales or ulterior motives...I did post the actual info on marketplace for people looking to buy. This is a great place for feedback, and I'm trying to learn all I can right now.

[isaakthepirate]

To me, investing in index funds is my idea of the ideal passive income...  It just requires selecting a stock/bond allocation, purchasing a couple of funds through a brokerage account, and then one can turn off dividend/interest distribution reinvestments and live off of the dividends and interest.  If more money than that is needed a portion of the capital can easily be converted to cash by selling some of the position.

If someone is looking for a higher rate of return than what is offered by say VTSAX, the will probably have to do one or more of the following:

1: take on more volatility
2: accept less liquidity
3: use leverage
4: work to obtain and maintain the investments (they stop becoming passive at this point though).

All of these have their drawbacks however.

Yep, I totally agree. I personally squirm at the term "passive investment" unless it's applying to stocks. Even "passive business" is a joke, since business requires active participation. But, it also is the term most people seem to use to describe low-work, no presence required kind of businesses.
I was looking for a higher return than VSTAX and was willing to put in some of my time. There are some folks where that's true, and some who are much better suited just to "stock it away".

[tralfamadorian]

@tralfamadorian - You’re right about the website, but we end up dialoguing with people a lot more than via our website anyway. Our website is limited, but we want to talk to people directly anyway. From my research, most companies don’t publish their full financial data - too big of a risk.

But, if you have more experience and knowledge in this than I do, I’m happy to take your advice. Have you seen that improve leads significantly?

Maybe we're talking past each other. I'm talking about how much a franchisee should expect to invest not what the company makes as a whole. I'm not sure if I know if any companies that do not share that info since a FDD (franchise disclosure document) is federally required.

Personally, if I was shopping to invest in a business opportunity such as this, I would be looking at the SBA's list of approved franchises
(https://www.sba.gov/sites/default/files/2017-11/SBA%20Franchise%20Directory.pdf)
If that business is not there, then I would be asking some hard questions as to why. Is it a co-op instead? (+1 in my book) Or is it a distributor or licensor instead? (-1 for me)

[isaakthepirate]

Maybe we're talking past each other. I'm talking about how much a franchisee should expect to invest not what the company makes as a whole. I'm not sure if I know if any companies that do not share that info since a FDD (franchise disclosure document) is federally required.

Personally, if I was shopping to invest in a business opportunity such as this, I would be looking at the SBA's list of approved franchises
(https://www.sba.gov/sites/default/files/2017-11/SBA%20Franchise%20Directory.pdf)
If that business is not there, then I would be asking some hard questions as to why. Is it a co-op instead? (+1 in my book) Or is it a distributor or licensor instead? (-1 for me)

That's interesting, when I was looking for businesses to buy, I was solely looking for private stuff like vending machine routes,e tc. I didn't want to pay franchise fees and was warned heavily by the constriction of working as a franchise. Why is buying directly from a distributor a -1 for you?

[CNM]

I'd advertise with business brokers/brokering websites.  One that comes to mind is bizbuysell.com .

[tralfamadorian]

Why is buying directly from a distributor a -1 for you?

I should have quantified that. If I was purchasing an item to resell, a distributor is great. But if I was purchasing something like what your business is, I would be concerned that there were no rules or repercussions for others doing a poor job that would thereby reflect poorly on the brand and thus me by extension.

[isaakthepirate]

Why is buying directly from a distributor a -1 for you?

I should have quantified that. If I was purchasing an item to resell, a distributor is great. But if I was purchasing something like what your business is, I would be concerned that there were no rules or repercussions for others doing a poor job that would thereby reflect poorly on the brand and thus me by extension.

Good concern to raise. But, if you were buying a vending machine route, would you worry about the other vendors? I eamn, since the machine is pretty standarized. Sure, another operator could let it break down, but it probably wouldn't reflect poorly on you. I understand vending machines are much more popular, but I think that since the actual machines are manufactured by us, there's a pretty good quality standard. But it's a great point to address.

[AaronMN]

I love the topic. Eagerly waiting for more!

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