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Subject:  Re: Buying a business as an investment Date:  6/23/2012  7:17 PM
Author:  ToddTruby Number:  15275 of 15438

I already commented on this: first, I find that this appears to be standard pricing for buying a small business, second I understand and trust my friend's reasons. If you have additional input in reply to my thoughts in this regard, please do respond, but repeating yourself isn't helpful (with due respect).

I challenge the "standard pricing" assumption. I would get the CPA opinion on the value of the business.

I also would challenge the 30% passive income expectation. Especially with an online retail business. Online changes constantly, so straight line assumptions 5 years out are very risky.

Other risks include what if you have to invest more or lose everything. Not an uncommon scenario in a small business.

Sometimes you just have to do a reality check, even before spending a bunch on due diligence. What kind of investment provides the kind of return you are expecting from this venture and what kind of risk in involved. If it is truly as simply as you are being told, there it would not be a big secret and others would be all over it.
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