Business... Buy Established or Start New?

I'm trying to weigh the pros and cons of this decision.. I have a family so the thought of starting from scratch and the dip in income could hurt, but I am looking for ways to supplement the income while still allowing myself time to build the business. I have been in the asphalt maintenance industry for some time now and I have a lot of faith in my ability to build a thriving business in my area, but it will take some time. A local striping business that has been around for many years has recently come up for sale due to a retiring owner so I have spoken with him as an option as well. The business comes with a list of customers and he plans to do introductions and what not, however the asking price is large and would take several years at 4k+ a month to pay off.. The business has done roughly 140k gross a year since he slowed down some, and he purposely kept the business limited to him and a helper, but I believe the existing customers would be a great place to start with growing the business. I also have fears that the customer base my have suffered some shrinkage with his cutbacks in recent years, and aside from calling all of them, I'm taking his word that they are good. I could expand services to include crackfill, sealcoating, signage, wheelstops, and even asphalt and concrete repair and replacement through rental equipment or subcontractors.. However the purchase price of the business would mean I would have to add those things slowly in the future after growing the striping to the extent it can pay me and the loan and still be profitable.. Starting on my own, I could have the equipment to perform all of these services from the start, and a much smaller loan.. This would also allow the business to generate more revenue and hopefully grow that much quicker.. Ultimately I'm trying to figure out how long it will take me to grow this business, and I know no-one can tell me the answer to that, but it helps to say it.....lol asking price on the existing business is north of 350k, for a van, two striping machines, stencils, some paint inventory, and a customer base..

Way too much money. Assuming 40% profit do you really want to pay $340,000 for a job that pays you $56,000 a year? Payments of 4K is $48,000. Remember potential has little to no value. There are different formulas to valuing a business. This fits none of them.

This isn't fast food or a corner store so existing costumer base is not a good valuation, those people can go to someone else just because it's no longer the original owner, people are funny that way so I wouldn't pay more then the value of the equipment and figure on starting from scratch. Any kind of service business that isn't one of the big name franchises would be the same way. Walky's rat killing and Truely Nolan do the same thing but one will just be a change in ownership that no one will notice and the other will be like getting a start up going.

"asking price on the existing business is north of 350k, for a van, two striping machines, stencils, some paint inventory, and a customer base.." 1 van, new around $50k, can get used for much less. 2 striping machines, new maybe $12k, used a lot less. Some paint, depends on how much paint but you will still need to buy more, it's an ongoing cost. A few stencils, a few hundred. Customer base, unreliable at best, will need to hunt for more. Better of spending less for the equipment and building from the ground up. This is way over valued and you will still have to find customers. Check around the pawn shops and other places for used equipment, find a vehicle you can afford and don't quit your day job just yet.

I appreciate every ones input.. I've been leaning the same way as far as being better off starting myself, but I will definitely have to find a way to keep some money coming in as I get started. I may also run some feeler advertising to gauge the response in my area.. Walking into a steady income business would be nice but being able to pay the loan would be entirely dependent on the growth since right now it's barely doing enough to pay my bills. I know the growth potential is there but I don't want to overpay for what it's worth right now with the current book of business.

Way too much, as people don't know you they know him, and he is the business. However, may be worth something for projects he sends you or purchase the phone number and name only. if he is unable to sell he may come to you for what he can get. or perhaps offer to pay a percentage of any income generated from his existing clients once you take over for a set # of years, any new clients would be yours.

Wow! I have far more equipment and most fairly new and would sell for a lot less since my 72nd birthday is coming up.

Well, i may be in the market for some quality used equipment pretty soon...