How to buy a business for $50K

Sarah Stowe

You want to buy a business and take control of your life but you have a limited budget.

Well, did you know you can buy a business for less than $50,000?

And the good news is you can even get the support of a network of other business owners if you decide to invest in a franchise.

Of course if you look to spend at the lower end of the investment scale you will need to apply as much rigour and critical analysis as you would if you had $500,000 to put into a franchise opportunity.

Before you buy, check the fine print.

Costs to consider

The franchisor might list the business as less than $50,000 but there will be extra costs you will need to pay before your franchise opens.

You will be paying an initial franchise fee and ongoing royalties will almost certainly be part of the franchise package you buy.

It is worth evaluating the long term costs of different budget offers – a higher start-up cost might look expensive but if the royalties are low, that might be a better option than a low cost inital investment with high ongoing fees.

There may be additional costs – premises lease, equipment or vehicle hire, training may be extra, and of course working capital.

Legal and accounting advice and business registrations or licenses will be added costs too.

A realistic approach to what you can get for your money will stand you in good stead.

What you will not get for $50,000

  • A full-sized shopping centre or high street retail outlet
  • A business that requires a big investment in stock or equipment

It’s worth remembering that for a franchise to be successful the business model has to make money for both the franchisees and franchisor. Beware any opportunity that seems to be too good to be true and offers everything for very little investment.

The key to getting it right is to do your research and speak to a franchise experienced accountant and lawyer, and talk to existing franchisees about what’s on offer.

Typical budget businesses

  • Mobile services
  • Transport
  • Mobile leisure and entertainment
  • Financial services
  • Educational programs
  • Home building_

Check out some of the options available right now:

Mobile services

Ovenu is a professional oven cleaning and detailing business; handyman services at Triple 0 Property Maintenance are geared to the domestic market.

Safety-focused firm FCF Fire and Electrical is delivering services to homes and industries.

Transport

Fastway Couriers is a weekday delivery service; Redspot Car Rentals operates more than 2000 vehicles from airports and city locations.

Mobile leisure and entertainment

Kubarz is a mobile bar and beverage catering company; Narellan Pools has been building and delivering pools for 40 years.

Financial

Fifo Capital specialises in short term business funding for SMEs while Mortgage Choice is a recognised mortgage broker.

Educational

Grasshopper Soccer teaches kids aged two to 12 footballs skills; Sherpa Kids is an out of school hours care model; Bricks 4 Kidz uses LEGO to educate kids through play; Little Kickers & Little Rugby Australia brings sporting activities to kids up to seven years old; and e²Young Engineers is all about science, technology, engineering and maths for children.

Home building

Dixon Homes and Hotondo Homes both provide brand awareness and support in the competitive new homes marketplace.