Originally Posted by Duekster
The trick here is to make a down payment then pay based on the remaining client base at various intervals.
Personally, I would rather just grow my business with the same amount of investment.
I have no intentions of an upfront payment. I'd do a small down payment and then a sturctured plan of multilpl payments every x months based on the percent that is still with me. I'm going to protect myself! So half the customers drop me...he gets half the money.
I'm going to continue to grow through advertising, but don't think I could invest the same money and get the same return as buying another business. This guy has been around for a long time and seems to have a small dedicated client base. So he doesn't advertise or work for new business.
I've got to figure what the cost of my lettered truck, application signs, offering of mowing(which he doesn't do), customer referrals, and entry into a new market would be valued at. That alone could be $10k in additional work and $2k in advertising cost, but i don't know.
I keep looking through everything and thinking...if I pay 1.5 times gross that means I got to work for free for 1.5 years unless I can drum up some new business or upsale to the current list.
I'd love for others to chime in on their thought.