How You Can Make $120k/yr with a $30k Ebiz Store

One of my friends decided that he would start a bunch of niche businesses with a goal of making $30,000 yr in each business.   So, conservatively speaking, he talked about opening 10 niche stores.

Just throwing out numbers, we figured you could seed each store with $5,000 or $50,000 in total capital.  Then we could hire 2 people to run 5 stores each for $30,000 a year.  Based on my experience 2 people could easily handle 10 stores if not more.

Your first year salaries would be $60,000 and $50,000 start up expenses totalling $110,000.  Now, let’s toss in $30,000 in office space and utilities for a grand total of $140,000 in year one expenses.

Let’s assume that 5 of the stores were successful and 5 failed.  Let’s also assume that successful meant making $30,000 a year.  At the end of year one, we would have a profit $10,000.  That’s sort of shitty as an owner.   All that work for $10,000?

But where is the real value here?  Most people don’t look at the big picture.

Let’s look at the 5 stores that make $30,000 a year.  If you sold those on the open market, you could get anywhere from 1.5x to 3x for them.  So the high end would be 3x, or $450,000 and the low end would be $225,000.  Add your $10,000 income and you’ve made anywhere from $235,000 to $460,000 in one year.  Now that doesn’t sound so bad anymore right?

If you are running a business that makes $30,000 you can decide to leave your job (ie. sell the business) and get paid.  You can sell that $30,000 a year business for $90,000 and not have to work for three years.  So basically, you can start a business that makes $30k and it is potentially worth $90k at the end of year 1.

You can be making $120k a year!

About Kenric

My blog about living life to the fullest by generating passive income through real estate, business and online investments.
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