Veronica and Gabe are a couple in the south-western region of the United States. Veronica is an administrative nurse in a moderately large private practice, and Gabe is in the construction industry and has owned his own company for the last 15 years. Their children are grown and out of the house for many years, and in their absence, Veronica and Gabe managed to put aside a little money.
They were taking a serious look at their future and trying to determine what to do with their savings. It was obvious that their savings needed to be working for them and that the yearly dividends it was producing where it was, was too little at this stage of their life to be of much help. They needed to get their money working for them. You see, both Veronica and Gabe were within seven years of retirement and neither relished the notion of having to work past 65 if they could avoid it.
Now understanding that you need to have your money work for you, is vastly different from knowing how to have your money work for you. Veronica and Gabe knew they needed to do something with their money to get it working but had no real idea how to go about accomplishing it. To their credit, they did an amazing job of research and investigation. Before working with me, they did their due diligence on all types of investment ideas. They enlisted a financial advisor to teach them about stocks and investment portfolios and they went to a financial coach to work through their own process of transition towards retirement. It was there, with the financial coach, they first began considering the franchise industry as an option. Veronica and Gabe had a little over $80,000 in a retirement account and a couple hundred thousand in equity in their home.
I quickly realized that with these two, it was more about lifestyle needs and desires, than a passion for the work or a particular industry. They simply wanted a return on their investment and an easy transition into retirement.
Veronica and Gabe are not alone. I have many clients who are looking for businesses that they can run semi-absentee or for some, passive income. It can be accomplished and with Veronica and Gabe, I went the passive income route. I presented to them a partnership opportunity in a very popular and well-run vending company. The Partner invests in a number of machines, giving the company working capital via the investment. The company and the partner, split the net profit from the machines, fifty-fifty. The model offers machines that are already in place and generating day-1 cashflow to their investor/partners, giving the company working capital to build and distribute their machines, while giving their partners 28¢ of every dollar earned, by the machines. They are SBA registered and approved, and the machines are a tax write-off (Section 179 of the Federal Tax Code).
Needless to say, Veronica and Gabe were thrilled with the model and after thorough due-diligence by them and the attorney, they wanted to continue. Having over 500 businesses in my portfolio gives me a deep resource of models to choose from but sometimes, you only need to know one for it to be the perfect fit.
*Names and some details have been changed to protect privacy