He didn't give you advice; just told you what you wanted to hear. Advice would involve discussion on who retains control of decisions while you are in debt to him, who has control of banking, payables, etc. What about your equity should things go south 1.5 years in. See? Jump right in. Nothing to think about.
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yea, this.
One of the things you need to make sure, is, once you make agreements to pay him. YOU become the "Owner" and HE becomes the "Debtor".
Just like buying a house from the bank, you make payments TO the bank, but they don't decide what color to paint the living room.
Once you are the owner (by virtue of entering an agreement and making payments) then you are running the show.
The agreement should also include his availability/retainer (for which I, personally would NOT pay extra, it would be included in the purchase price) to consult for a minimum of one year.
This way if issues come up like "where did this go" , "this customer says this happened" "This job didn't get billed" "this customer is requesting a refund"
"The customer called asking about a job you did for her last spring"
Then the original owner is available to you to answer those questions.
additionally be wary of any previous work done that might still be under warranty, once it's your business you're on the hook for any of that.
Like wise with debt/bills unpaid and especially taxes. (make sure there are no back taxes!)
Workers comp claims etc also can blow back on you.
So you have to check all the books and history back at least 3 years.
If these records are not available, red flag.
I personally believe it is always better to get a job at jiffy lube and start your own side business from scratch than to buy someone else's faltering enterprise.
Rarely is it a rose, more often, it's a turd painted red.
Doesn't mean you can't assume ownership, just means in REALITY
the business can OFTEN be worth less than if he sold all his gear on craigslist.
Once a company is dissolved, his skeletons stay with the entity/former owner.
If you become a NEW owner, you buy all the skeletons.
It's best (in my opinion) to make a bulk offer on his equipment and offer a sales commission for a year for any customers that remain as full paying customers. (no value in dead beats)
The value of the equipment plus a 5% sales commission often works out less than what he could sell his gear for on CL, because you are buying ALL the equipment at once, ad he doesn't have to wait to piece it out to individual buyers (which always fetches the highest price)
So figure the value of all his gear/trucks
. multiply it by .8 and that's the offer for the physical equipment.
Then offer him 5% on sales as I mentioned above.
Pick a new name, do your own articles of organization, and set up an letter/notice to all his current client base that you have bought him out and will now be servicing all the customers under your new name.
That's my advice.