Whenever I talk about buying businesses I tend to get a lot of questions about distance. How far away should a business you buy be? Should it be in your backyard? Should it be in another city? Another state? Another country? In other words, they want to know if distance plays a factor in the success of a business they buy, and what do I think about it?

My answer: Ideally -- and this is different for everyone, so this is just my personal preference -- I would recommend one closer to home but not too close. You dont want to live over the store. You have no idea what you're in for if it's right down the street (even if you are having other people run it for you) because theres a tendency to drop by and get involved in the whole thing. And unless you really know what you're doing when it comes to running businesses -- know more than the managers you're paying all this money to keep things running for you so you don't have to be there -- then you're probably just going to be in everyone's way and muck things up, with people wishing you'd get the heck out of there and go play golf or something.

On the other hand -- and if you do things the way I suggest, and only buy large, multi-million dollar businesses -- the thing you have to realize is if youre going to have one further away, the minimum net, again its based on all the years theyve been in business, is about $250,000 net. Thats after you pay a manager, thats bottom line $250,000. At about that level, the manager really starts to take over and you dont really have an active participation in the company. This doesnt mean you dont oversee it. It doesnt mean youre not involved in it. It means youre not there every hour. When the secretary doesnt come in Monday, you dont really care. You dont even know about it. And again, maybe it's just me, but that's the ideal way to make money in a business, isn't it?