JamesBon92007
Contributor
- Messages
- 3,209
- Reaction score
- 1,305
- # of dives
- 2500 - 4999
There are some great suggestions and advice here. First, ask yourself, do you know what a "profit margin" is? And as others have said, have you ran a successful (profitable) small business? If either answer is "no", I would pass. If both are "yes" then we move onto such things as are you able/qualified to do equipment repairs, VIPS, and all of the usual stuff that dive shops do? Are you willing to work seven days a week, 14 hours a day to make $20K/year? Do you have to sign a lease or is the building included? If the business fails can you afford it?
According to statistics I've heard in the past about 98% of small businesses fail within the first two years. I have known people who mortgaged their home, signed a five year lease, and were out of business in less than a year. Most people do not seem to me to be equipped to run a small business. Are you one of the rare exceptions?
LIke others have said, you would need to find out exactly what the total yearly revenues are plus what all of the expenses are in order to determine how much profit it makes. Based upon that you could determine approximately how much your monthly/yearly income would/could be. It it's agreeable then you need to consider the financing. Do you have enough cash to buy it outright? If not, will the owner carry a loan? Subtract the loan amount from the projected profits and see what your net is. Is it enough? If you fail will he re-possess the property or will you still have to pay off the loan? In the USA about 25% of your "profit" will go to Uncle Sam. I don't have a clue how it works there. If you do decide to buy I'd suggest seeing if you can do a LLC there. In the USA you can form a limited corporation and the business does not have to pay taxes, you just pay income taxes on the money the business pays you. The business pays half of your Self-Employment Tax and you pay the other half.
Aside from all that, owning a dive shop in the Caribbean sounds delightful
According to statistics I've heard in the past about 98% of small businesses fail within the first two years. I have known people who mortgaged their home, signed a five year lease, and were out of business in less than a year. Most people do not seem to me to be equipped to run a small business. Are you one of the rare exceptions?
LIke others have said, you would need to find out exactly what the total yearly revenues are plus what all of the expenses are in order to determine how much profit it makes. Based upon that you could determine approximately how much your monthly/yearly income would/could be. It it's agreeable then you need to consider the financing. Do you have enough cash to buy it outright? If not, will the owner carry a loan? Subtract the loan amount from the projected profits and see what your net is. Is it enough? If you fail will he re-possess the property or will you still have to pay off the loan? In the USA about 25% of your "profit" will go to Uncle Sam. I don't have a clue how it works there. If you do decide to buy I'd suggest seeing if you can do a LLC there. In the USA you can form a limited corporation and the business does not have to pay taxes, you just pay income taxes on the money the business pays you. The business pays half of your Self-Employment Tax and you pay the other half.
Aside from all that, owning a dive shop in the Caribbean sounds delightful
Last edited: