Price for Buis

[hortusa]

I would like to get your input about what you guys think this buis is worth.A guy I know wants to sell his buis.I know him for a good 11 years he has been in it for at least 8 years.He has 70 accounts that the majority get full service.I haven't gone through his books, this is what he tells me. He says he netted $50,000 last year from March to end of Nov, with one worker.He wants $30,000 with equip,which consists of 14ft enclosed trailer, (1)32in Toro,(2)21in Toro, (2)Red max blowers, (10)Billygoat power blower,(1)Red max trimmer, (1) Red max Line trimmer, and some other miner stuff. However I have this equip and have no need for it!Whats it worth.

[kutnkru]

Upstate many try to get 30% of the gross.

Kris

[Getmow]

His net and yours might be two different things. Look at gross reciept, how long the accounts have been with him, the time left on contracts and if you really want the work.
The used equipment is just that. If you know this person you should know if it was taken care of.
Good Luck.

[Green Acres]

I have never bought a business but might someday. Are you going to pay cash or take a loan out for it? If you take a loan out how long can you take one out for and what is the interest rate on something like that?

[hortusa]

First of all thanks for quick responses. However could you guys give a number on what you guys think its worth. And to reply to Green Acres. This would be a cash transaction which I would like to make in 3 payments over a couple of months, with a legal contract that states You can no longer work at these accounts and or in the vicinity and if customers leave before I start to ajust the price and stuff like that.

[osc]

10-12% of the gross for one year. The equipment isn't worth 5k.

[VLM]

I agree with 15% of the gross. I would ask to see his tax return or a bank transaction composite, or at the very least a copy of his accounting records. You have to provide all of these when you apply for a loan. If you dont want the equip. just tell him to keep it. So a rough figure would be about $7,500. You may want to ask for his customer list and give some of them a call. It could be that alot of them have already found someone else or he may have slacked off knowing this was his last season and they may be so pissed that they won't want to have anything to do with you. Worth checking into.

[Nathan]

We had a similar situation last year. Bought a company with approx 30000 gross and equip worth about 3000. We paid 4000. The equipment wasn't truly worth 3000 to us since we already had most of what we needed so it was considered to be almost worthless. It sounds like this is about where you are. Tell the owner that the equip. won't make the deal and he can decide whether or not to seperate the accounts and equip. Offer him 10% of gross and a true value to you for whatever equip. you need. He will go for it if he is really serious. If not leave an offer standing. Most likely no one else will jump on his initial offering.

[awm]

If this is 70 accts mosly contracts.I would go
around with him to individual accts .
You pickum at random.If the buisiness is solid
should be worth 20,000 offer,and work from there.
Some would disagree but thats what i would do.
IF YOU WANT THE BUISINESS. He likes his
equipment but used is hard to put a value
on.You dont needit let him sell it in paper
separate OR YOU GET IT CHEAP

[GREG R]

I'm in the same situation, I do some sub work and the guy came to me asked if i was interested in buying his customer
list (retiring from hard labor)

I think I will suggested a price and payments to be made off of a percent of the income generated from his customer list. I run a 57% net profit, which gives me a good idea
on what can be profitted and satify him.

I don't like the idea of a bank loan and the risk of someone
else business because everyone treats their customers differtly.

also take in consideration of the accounts you might drop because they are unfavorable to your present business
I haven't gone through with this yet, but if this is a bad
idea please let me know....soon
"just some different views from different folks"

[65hoss]

The trailer and the 32" wb are the only things really worth considering in the deal as far as price is concerned. So he netted $50,000. What was his gross? That would be the # of real interest. Your overhead and his probably aren't the same. $30,000 for the business is way to much for this. Of course, if I ever sell mine I hope to find someone to pay this type of money!

Accounts only: $7,000 to $10,000 depending on the type accounts.

Equipment: $3,000 to $5,000

Goodwill: That is up to you.

Me: If I looked over everything and thought it was a good deal (best scenario) I would possibly offer $10,000 including equipment and for goodwill maybe some % of the profit on the accounts that are still with you at the end of the year. This will ensure the present owner helps you keep you customers.

[Michael Fronczak]

You doing better than I was. I called(ad in paper Bus. for sale). The guy grossed $ 70,000, last two years all residential but 2 or 3 com. He wanted $ 80,000. Price included 52" scag WB, 60" Lazer, 12' trailer & two cycle stuff. He said he had a 97 K2500, 25,000mi that had never been plowed with he would sell for $ 10,000 additional. I politly said thanks for the info.
For the price I would definitly like the truck, I'm sure he won't sell just the truck though. I figured the equipment was worth at tops $ 8,000, without seeing it. Haven't gotten back to him, and won't.

[kutnkru]

Mike

I would drop him an offer because you never know. I had talked with a gentleman about buying his business. He originally listed it at $60k. We serviced a lot of the same neighborhoods and had spoken frequently. We haggled price one winter and I was able to get him down to $20k including equipment and an 86 plow truck w/ sanding unit. To make this babble short he wound up selling it that spring to a buddy of mine who walked thru his door with $10k cash. Was I furious ABSOLUTELY because I could have come up with that amount. So HEY You Never Know. Good thing is I enjoy the competition with my friends thruout the season though. :-)

Thanks for listening
Kris