My $62,000 Bet

by 76 replies
90
Just bought me a business today for $62,000.

Walk in to a $100,000 annual cashflow.

I'm pumped because the business is so freaking simple
and the market is massive and hungry.

Here in New Zealand all shops and many taxis have EFTPOS machines which use paper to print out receipts.

I'm the paper supplier to those machines.

Most of those machine owners or renters buy from stationery shops and they are crap and much more expensive.

Mine are locally made and the factory couriers out each order to my customers.

No stock for me to carry and it's all repeat business.

The seller is running off to make mobile apps while I'll be growing this plain boring
money maker like a out of control weed!.

Just 2 taxi companies here in Auckland have over 2,000 taxis in their fleet with eftpos.

Think of the busy food malls and bars all using Efpos machines.

The Casinos, movie theater's the list goes on and on.

Just walking into a local bakeries and food places where I already go and mention that I can get them a better deal on their paper. Just been saying I'm busy right now and I'll be back with details.

Their eyes light up.

So these plain boring businesses are out their ready to
be grown, in this case, massively without constraints of
stock financing, warehousing, staff.

The true meaning of an entrepreneur is take under performing assets and add value to them.

Anyway, I've put money where my mouth is by saying I can grow this business
rather than talk about it.

Plus share my good news.

Best,
Ewen

P.S. He's signed a non compete agreement to.
#offline marketing #$62 #bet
  • Look into developing mobile payment app too, paper is gonna be used for next two years but it's gonna go to mobile payments (Square.com is great example of new technology)..
    Look at uber.com to see how taxi industry evolves..

    I like your biz but it's gonna evolve so work to be first one in
    • [1] reply
    • Whatever machine comes down the pike in future for electronic funds transfers
      offline, then paper will always be used for receipts.

      And offline businesses aren't going to vanish.

      Best,
      Ewen
      • [2] replies
  • Sounds a promising business, initially. But I agree with After in that I think it's just a matter of time before technology replaces some of the basics - if you plan to be that technology, then, you're onto a winner!

    Good luck with it regardless, takes some guts to drop that kind of money into anything, so, huge respect.
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  • Good luck man
  • Hey, good luck with it, Ewen. Sounds promising.
  • that looks a very good business congrats on the deal.
  • Thanks Ewen, that leaves it open for you to approach businesses without that problem. Busy places must go through a tonne of reciept roll. Does this include receipt roll for the big tills themselves or is it just for the portable card reading units?
    • [2] replies
    • I'm having a meeting with the head of the paper factory next week,
      so I'll be asking him if they make paper rolls for cash tills.

      Best,
      Ewen
      • [ 1 ] Thanks
    • We are selling cash till paper rolls now.

      Best,
      Ewen
      • [1] reply
  • Congrats and good luck! It seems like a great buy. Looks like there is definitely room to grow.
  • Everyone keeps mentioning Square mobile payments which is great and very well could may revolutionize payments BUT what they aren't mentioning is that Squares Register app hooks up with receipt printers to print PAPER RECEIPTS! People still want paper and some are uncomfortable signing with their finger or getting a receipt texted/emailed to them. For the foreseeable future until mobile payments really sink into the public consciousness people are going to take the paper. I think you made a good purchase! Congrats.
  • There are still businesses that use carbon to take credit cards. Just because you think that it should go away and be replaced with a paperless "green" app, doesn't mean that businesses will care about them any more.

    Another assumption is that everyone is going to have a smart phone to store their receipts. What about those that have a feature phone, or don't even have one. Are those people going to be out of luck. Some people even still use cash or check. These people are not going to be able to purchase anything unless they go buy a smartphone and set up a credit card for it?
  • Nobody can tell the future. I don't think that paper receipts will be gone any time soon, but nobody really knows. Just keep on top of the evolving technology.

    62k! I get nervous even thinking about that kind of money.

    Good luck!
  • "The true meaning of an entrepreneur is take under performing assets and add value to them."

    That's not the true meaning of entrepreneur, it's a loose interpretation of the definition of a "turnaround specialist."

    Anyway, if this story is true, I wish you a lot of success.
    • [ 1 ] Thanks
    • [1] reply
    • From Merriam Webster:

      And Wikipedia:

      Sounds like it fits to me.

      Well done Ewen.

      Thanks,

      John
      • [ 1 ] Thanks
  • Great share thanks
  • Hey Ewenmack,
    Congrats on your new acquisition.

    One thing I expected to hear from you (seeing most of your posts) was an idea to make additional money through your new business.

    Assuming this is legal, why not place ads and/or coupons on the back of the receipt paper? Wouldn't this be a way to make extra money?
  • Instead of ads on the back, why not print discount vouchers for the store issuing the receipt? You could charge them a little premium for the ability to draw in extra business.
    • [ 1 ] Thanks
  • Ewen nice job!

    It's crazy how people think that paper is going away anytime even remotely soon. Paper receipts are here to stay for a long time. Maybe sometime in the future places will start offering the option of a paper or 'digital' receipt where we hover our phones over a pad or something but there's always going to be the option of a physical receipt as well (therefore the need for your paper). I know this isn't any news to you.

    The responses of "I never keep a receipt, I throw it right away" is the same stuff we hear about the 'ineffectiveness' of direct mail as well. It doesn't matter if you throw it out, all we're concerned about is the bazillion people that don't throw it out.
    • [ 1 ] Thanks
    • [1] reply
    • Haven't there been some people that are saying direct mail is dead and the internet is the only way? Sound pretty much the same to me.

  • Quick question. What are the net profits of this business per year? I know you said the cash flow is $100,000, but I'm curious as to what kind of profits this business generates.

    Sean
    • [ 1 ] Thanks
    • [1] reply
    • Good question Sean.

      $50,000 before tax.

      Best,
      Ewen
      • [1] reply
  • AfteraDream, you're not thinking hard enough. Just because you don't like to keep a receipt in your pocket (neither do I) doesn't mean a thing. I'll say "no thanks" when asked "would you like your receipt" for small ticket items (like food) that is, but I'll take it for big ticket items. Some people need a receipt to claim a work or business expense. Receipts are not going away.
    But, receipts completely aside.......it's called a source document, and there are important reasons they will not be fully digital any time soon. Sure, maybe your grandkids might experience something different. But not any time soon.

    I hope it's a massive success.

    One question (I had 2 questions but scrolling down the thread, Sean asked my first obvious one). With 100k revenue and 50k nett profit, I'm surprised it went for 62k? Previous owner looking for quick sale, or...?
    • [2] replies
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    • Hi Aussie,

      The ad for the business was a little hard to understand the model/concept,
      therefore that would lose potential buyers.

      Then there were plenty of tire kickers.

      I was the only one who went out and saw how he got new business from cold walk ins
      which showed him I was serious. Also told him I'd built and sold businesses in the past too
      to add to my credibility.

      Plus I saw the massive untapped market.

      So with all those things combined, he was wanting an end to the stress of the sales process.

      I gave him the price he asked for too.

      Still looked at his bank statements and locked him out to compete
      with me in the future if he ever wanted to come back.

      Having repeat business and low cost to get customers
      while delivering the paper was as simple as pressing a few buttons
      on a i phone all helped to see this was a great business.

      Best,
      Ewen

      P.S. While I was driving home from town this afternoon I thought
      just how fast and simple it is to fullfil the purchase, compared to other businesses.

    • I agree, receipts aren't going away. But doesn't mean they won't become digital only or used way way less, like fax these days..
  • It has always been interesting to read people's comments here on WF Good Luck Ewen btw! looks like its gonna be a good BIZ!
  • Congrats on showing some initiative. Sounds like it's paying off. Best Wishes with it, Ewen.
  • Great share man! And good luck with it.
  • Like Terry Gorry, I have experience in business valuation too. I hope the numbers in the original post are true and verifiable. Someone got taken to the cleaners here. I just hope it wasn't the OP, since he's a high-volume poster and advice-giver.
    • [1] reply
    • I think all this sounds very strange... Like... VERY strange. 100K cash flow, but 50k income on paper? Is it a one man show? Are you the only employee? The income seems weird, I'm surprised you have those kinds of margins, and why someone would sell a 50K net business for 62k when they have repeat business and don't have to do jack to grow it. Can you expand on this a bit?
  • 100% mark up on the rolls and next to zero fixed costs?
  • Good luck man. hope it works out for you!
  • I hope that doesn't mean less direct mail threads. =]

    I look forward to those threads so please keep making them whenever possible.
    Thanks!

    -Red

    (ps - don't feel like I'm trying to oblige you to anything, just saying I do really appreciate those threads)
    • [ 1 ] Thanks
    • [1] reply
    • Thanks Red.

      I probably won't be contributing as much here as in the past
      because I'll be focusing on building this business.

      I don't make posts to build up excitement then presell a WSO.

      I stick with core business which is building offline businesses.

      People seem to get lost when they attempt to do both
      offline business building as well as be in the information business.

      Not only that, it often effects those close to them
      because of the time spent away from them.

      Best,
      Ewen
  • yep most successful busiensses do very basic things on huge scales. I find the "high tech. stuff." doesn't make as much money as plain and simple.


    I do not think most I.Mers are real business people. They think ranking a M.N. site top of G. with 100 competetion means they are going to make $20k a month. They need to get out in the real world!
  • ewenmack,

    This is interesting. I will venture to say paper receipts are going to around for many years. Why? Let me share a story.

    I had a coworker who kept receipts for EVERY purchase - from mints to computers. Every time he received his credit card statement, he would "validate" each charge. He said he would find several "incorrect" charges every year.

    You can call that obsessive or a plain a waste of time. But, you will always find people like him out there.

    God Bless,

    Rich
    • [1] reply
    • And he couldn't keep them organised in one digital file properly where he can see and pull out anyone he needs on his iPhone?
      • [1] reply
  • IamNameLess has it right... something sounds fishy... $50,000 profit from only $100,000 sales there should be many more people jumping into that industry for sure. Then $50,000 profit sold for only $62k? A general rule of thumb is that a business is worth approximately 2.5 times it's annual net income making this one worth 125k at least. If Ewen got the business for half price of value then good for you and best of luck with it. He is a great contributor on the forums and we should all be wishing him nothing but well.

    As far as paper receipts... we know they will be around for a while but everything is going digital whether we like it or not. People are even paying good money for a computer scanner and program to get rid of paper clutter by scanning receipts and documents. IMHO nothing happens real fast though because of so much resistance to change.
    • [ 1 ] Thanks
    • [3] replies
    • Nobody got a bad deal on this business, because the seller got
      the price he asked and I got the business I was after.

      People have there own reasons why they want to sell a business
      and not all know the true value of theirs.

      Bank statements were checked and I meet with his accountant.

      The margins of 100% are not uncommon.

      Think of the coffee sold at Starbucks?

      Expenses include your usual home based business,
      such as land line, broadband and mobile...
      $150 a month.

      Then there is a little bit for petrol and car maintenance.

      It makes me wonder if many people here know if they are building
      a saleable business.

      Many service providers aren't.

      Who wants to buy a job?

      Best,
      Ewen
    • Yes. And as I used to work in retail shop, we had to keep only receipts of the full day turnover and monthly one. Other receipts go to bin. Even now tills keep data for last few years in electronic form in case they needed. Not paper ones. Paper might be still needed but the business needs aren't as big as daily customer receipts so you can judge the drop in demand for it once that will happen. 3 or 5 or 7 years.. just matter of time.

      It's perfect business to build up and flip. But not keep for looong time..
      • [1] reply
    • Unlike the Internet marketing world, there's no one teaching
      you how to find these types of opportunities.

      Big box retailers are the ones who are selling the paper rolls, but maybe 1 selling direct to customers for convenience, better quality paper and lower price.

      Just street level skills sniffing out opportunities where others turn their nose up.

      That's the beauty of knowing how to build businesses offline,
      and what makes a rough diamond.

      Best,
      Ewen
  • I wish I had $62,000 to buy a business right now. It sounds like you are getting a great return on your investment already. That's good. Keep up the good work, and some of the suggestions above probably will help you.
  • ONline marketing is good, but offline marketing for online purposes..it is a killer combination.
    • [1] reply
    • Like most offline businesses, this only has technology to support the
      business, not having the business support technology.

      Natural when you are dealing with a physical product.

      Big difference.

      Best,
      Ewen
  • Clear of any debt and everything? I think if you can play it right, you'll have a winner on your hands. Goon on ya, mate. Good luck.
    • [1] reply
    • Seller assumed all debt to supplier and I opened up a new account with them.

      Best,
      Ewen
  • im interested to know where you get your paper from that your customers cannot cut you out and go direct ?
    good luck with it, its a big investment

    Mark
    • [1] reply
    • Have a agreement with the paper maker not to retail it Mark.

      Best,
      Ewen
  • You should look into being an agent for a credit card processor as well. Residual Income an all $$$ that your merchants process.
    • [ 1 ] Thanks
    • [1] reply
    • Thanks for that, I had never thought of it.

      Sounds interesting, problem is there is so many leads
      I have to follow up with the paper rolls it is a distraction.

      Best,
      Ewen
  • Kia Ora Ewen,

    It's great to hear that you have a headstart for the business and also the high amount of potential clients.

    Me living in Auckland as well, I was curious if you had any part/full time jobs available to help a kiwi out who's been looking for a job for months?

    I live in Balmoral (Central Auckland), so as long as you are not based on the outskirts of Auckland, I would love to meet up with you to talk further.

    Cheers,

    Nathan
    • [2] replies
    • Sent you a private message Nathan.
      Best,
      Ewen

    • Nathan, I didn't see you at the Kingslander tonight,
      you didn't contact me either...what's up mate?

      Best,
      Ewen

  • ingenious, I've heard about that type of marketing tho.
  • I agree with this and as long as you are making money now go with it, but as stated before just be ready to adapt to the evolution. The only thing certain is change, but I see you're very business savvy and you probably already researching the next venture. No one should ever put all their eggs in 1 basket.
  • Like said above. Getting 100%-200% profit is not un common. Paper is cheap, with the right supplier, and proper negotiating, you can get for pennies a roll. I can see him making more then stated above.
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  • I worked in the merchant service industry for a while, and still sort of do, but here in the US most merchant service providers give receipt paper to their merchants for free.
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