How to Buy an Existing Business Instead of Starting One

Blue-collar workers keep the world running, but too many never build real wealth. I started Hammer & Hustle to change that. You don’t need a degree or a Wall Street background. You just a plan and the drive to execute. This newsletter gives you real strategies to grow your money, start a business, and take control of your future.

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How to Buy an Existing Business Instead of Starting One

If you’ve ever dreamed of being your own boss, forget the startup hype for a minute.

Starting from scratch sounds exciting—until you're 18 months in, broke, and still trying to “build your audience.”

There’s another way: buy a business that already works.

Here’s how:

1. Figure out your budget

You can buy a small business for less than a new truck. Local service companies like pressure washing, HVAC, or car detailing often go for 2-3x yearly profit. So if it makes $100K/year, expect to pay around $200K-$300K (often less).

2. Look for hidden gems

Skip the flashy stuff. Search sites like BizBuySell, ask local CPAs and business brokers, or even call owners directly. Look for:

• Owners near retirement

• Businesses with repeat customers

• Companies that don’t rely on the owner’s face

3. Use other people’s money

You don’t need the full price in cash. You can:

• Get an SBA loan (only 10% down)

• Ask the seller for seller financing (they get paid over time)

• Bring in a partner with money

4. Do your homework

Check the books. Ask for:

• 3 years of tax returns

• Monthly profit and loss

• Customer list and contracts

• Reason they’re selling

Hire a CPA or small business advisor to sniff out any BS.

5. Take it over and improve it

Once you buy it, treat it like a flip:

• Add a website or Google reviews

• Hire someone to handle customer service

• Raise prices if they’re too low

Most of these small business owners never touched marketing. You’d be shocked what a basic Instagram page can do.

📊 Business Snapshot - Example of a Pressure Washing Business

• Annual Revenue: $150,000

• Annual Expenses: $75,000 (labor, gas, equipment, insurance, truck)

• Net Profit: $75,000

• Asking Price: $60,000

This is a 0.8x earnings multiple, which is low. Most small businesses sell for 1.5x to 3x profit. This guy just wants out.

💸 The Deal Structure

You don’t have $60K lying around. So you structure it like this:

• $10,000 cash down (your savings or credit card advance)

• $25,000 SBA microloan at 9% over 5 years → ~$520/month

• $25,000 seller financing over 3 years at 5% → ~$750/month

You now own a $75K/year business with just $10K out of pocket.

📆 Year 1: What You Actually Make

Annual Net Profit: $75,000
Loan Payments:

• SBA loan: $6,240/year

• Seller financing: $9,000/year
  Total Debt Payments: $15,240

Your Net Income (after debt): $59,760

💥 Year 2: You Grow the Business

You implement three simple improvements:

1. Local Google ads + basic website → +20% revenue

2. Add a part-time employee to handle more jobs → +30% capacity

3. Raise prices by 10%

Now the business makes:

• Revenue: ~$210,000

• Expenses: ~$100,000 (added labor + ad spend)

• Profit: $110,000

Still paying off your loans:

• Debt payments: $15,240

• Net income to you: $94,760

🔁 ROI Breakdown

• Initial cash in: $10,000

• Net income in Year 1: $59,760 → 6x return

• Net income in Year 2: $94,760

• 2-year total profit: $154,520

• Your ROI in 24 months: 1,445%

That’s not a typo. This is what buying small, boring businesses can do.

The Bottom Line:
You don’t need a tech startup. You need a seller, a simple service, and the guts to take it over.

From Work Boots to Wealth,
– Hammer & Hustle Team