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Old 02-09-2013, 09:50 AM
djagusch djagusch is online now
LawnSite Gold Member
Join Date: Mar 2006
Location: MN
Posts: 3,982
Originally Posted by dnc19694339 View Post
equipment + 1 months earnings is a great deal for the buyer.
Not so much for the seller.

I dont know about you guys but I would NEVER sell my accounts for 1 months earnings. Just my opinion but I think that is ridiculously cheap!!

I have bought out 3 competitors in the past 10 yrs. I paid around 2 months earnings for two of the biz and 3 times for another and I still think these were cheap, I would buy them all day long at that price!
True to a point.

You as a seller don't want to sell so you would want higher dollar. If a seller wants out then he is going to take what is offered, unless he wants to keep them. The buyer wants to offer just enough for the guy to sell, not any more.

Other thing is in this case the buyer has no other accounts to help spread the cost of the loan or been in the biz to be most efficent. He's going to be paying $600 plus a month for the orginal $40k loan for the next 5 yrs which is going to be a major drag on the company until its paid. The equipment will need major repairs or replacement over the 5yrs which will be hard to keep up with.

Best case senerio would be buy it see sales double and then should be able to get out of the hole. I just see the loan and the buyer being used to $40k income (his current job) having a hard time being net positive especially if he keeps the employee around for $17/hr.
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