I just ran across an established hot dog cart business for sale in Bakersfield, CA.  It’s located in front of a busy Lowe’s home improvement center and has annual sales of $92,000.  Not bad.

The owner has listed this business through a broker, and it is a franchise operation, so there are some extra costs involved which bring the profit margins down to 40% which is really low (the average independent hot dog cart operator keeps 60% to 70% of profits).  The asking price is $89,000.

Good deal?  If you apply the usual business valuation formulas such as setting the asking price as a multiple of revenue or EBIDTA (Earnings Before Interest, Depreciation, Taxes, and Amortization), possibly.  But I’m not so sure.  Here’s why…

With a little bit of knowledge, you could duplicate this business almost anywhere in the country with start up costs under $5000.  With a little more knowledge, you could do it for $1500.  You would save $87,500.

That’s what I teach regular folks to do every day.  People with no previous business experience.  Would you pay $500 to learn how to do this?  (Hint: You won’t have to pay nearly that much.)

Where can you get this knowledge?  Right here: How to Start a Hot Dog Cart Business.

To your success,

Steve