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How much money does a business owner make? In this video, I walk you through a business buying case study and point to three stages where business owners get paid. I also explain the difference between revenue and profit – a crucial distinction for income expectations and business buying decisions.
Here’s a common mistake I’ve seen people make when they want to buy a business: they’re lured in by the promise of high sales. They don’t consider the difference between revenue and profit. Remember you’ll have expenses, overhead, and taxes. The money your business brings in isn’t all yours to keep.
So, how much money does a business owner make, and how and when do you see profits? These are three times you can reap financial benefits:
– At closing, as the buyer. Often, you’ll borrow the money you need to buy a business. If you raise extra capital, you can keep what you don’t need for closing.
– As your business brings in revenue. If you decide to act as business owner and operator, you can take a manager salary for running day-to-day operations. Or you can simply collect owner dividends.
– At your exit. Once you’ve grown your business, you may choose to sell it. How much will you make from the sale? The valuation of your business depends on factors like your sector, profit margin, and debt.
These are the questions you grapple with when you start buying businesses:
How much money does a business owner make? Accounting for the difference between revenue and profit, how profitable will your business be? How do you find ideal businesses to buy, pay for them, and pay yourself?
Find answers to these questions and more:
http://www.moranpober.com/
https://university.acquisitions.com/
