what do you think of this offer?

Discussion in 'Business Operations' started by lawn, Dec 13, 2011.

  1. lawn

    lawn LawnSite Senior Member
    Messages: 344

    have a guy interested in buying our company. asking price 230k 70 clients plus all equiptment, clients etc.
    He offers pay: (total $200,000.00)
    1) 16,000.00 down
    2) 114,000.00 at closing
    the remaining: 1,000 per client who continues with company in either a plowing or landscaping capacity, up to a total of $70,000. Payments will be made on the 15th of each month based on the known renewal of clients at the end of the previous month from January 2012 to July 2012.

    what do you think?

    oh forgot, then he went up another $20,000.00 on the asking price. so a total of $230,000.00

    Please let me know what you think! or what can I offer to him differently on the clients payments, I really do not want to strech it out so long.

    NEW CITY LAWN CARE LLC LawnSite Bronze Member
    Messages: 1,271

    In my opinion get ALL your agreed upon price at time of company sale/transfer, you don't want to hang onto ANYTHING....
  3. Efficiency

    Efficiency LawnSite Bronze Member
    from zone 6
    Messages: 1,855

    how do you expect help when you give us no info as to the value of your assets, your intangibles, or what your business nets/grosses? :hammerhead:
  4. lawn

    lawn LawnSite Senior Member
    Messages: 344

    Hi, my question is about the payment plan not the amount offered. Is the fact that he wants to hold $70,000.00 until he makes sure that the clients will stay with him, otherwise he wants to deduct $1000.00 per client that does not stay with him.
    I don't like the idea so that is why I am asking if you guys can advice me on what to trow back to him.
  5. jc1

    jc1 LawnSite Silver Member
    Messages: 2,157

    I think it is reasonable for him to want to hold back some funds. Often people will cancel service when a service business has changed owners. Unless you have rock solid contracts that the customer can't back out of. I have purchased accounts paying 1/3 at time of closing, 1/3 for each customer retained after 6 months and 1/3 upon renewal the next season.
  6. wbw

    wbw LawnSite Fanatic
    Messages: 6,168

    First of all I think that $200,000 plus $20,000 is $220,000 not $230,000.

    The rest is simply a matter of negotiation as to who carries the risk. The more risk you accept the higher the purchase price. The more risk he accepts the lower the purchase price. And if you want better answers the details do matter.
  7. djagusch

    djagusch LawnSite Platinum Member
    from MN
    Messages: 4,358

    I would agree with this. Does he have 50k in equipment or 200k in equipment. Is it contracts resi or com? Gross and net numbers let us know how healthy the biz is.
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  8. lawn

    lawn LawnSite Senior Member
    Messages: 344

    wbw thanks for your input, also thanks for the criticism, i guess you NEVER make mistakes uh? good for you!:clapping::clapping:
  9. wbw

    wbw LawnSite Fanatic
    Messages: 6,168

    Not trying to be a jerk but that is a $10,000 mistake. I try not to make those.
  10. wbw

    wbw LawnSite Fanatic
    Messages: 6,168

    The more info we have the better we can guide you to your desired outcome. These things really do matter. Is most of the value in the equipment or accounts etc.

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