# service business purchase-any advice?



## peterward (Mar 8, 2011)

i have an opportunity to buy a 20 year old one man service company. any ideas on how to structure a deal? I know the drawbacks on valueing good will. how about owner participation in keeping/promoting client base? any thoughts would be appreciated


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## OldSchool (Jan 30, 2010)

why is he selling ?


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## peterward (Mar 8, 2011)

age for one plus he fell in a crawl and got hurt, decided it was time, he's in his mid-60's


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## OldSchool (Jan 30, 2010)

peterward said:


> how about owner participation in keeping/promoting client base? any thoughts would be appreciated


Seeing that it was just a one man operation... there may not be enough work to keep him on....

How large is his client base....

Does he have a long term contracts like service plans or agreements..


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## peterward (Mar 8, 2011)

i don't think he would be interested in continuing to work but may consider doing PR work such as pushing the new owner, his client base is long term and repeats, no gauranteed service "contracts". i guess i'm looking for any ideas on how he could help to maintain the client base, maybe a percentage return on each call for a period of time? some incentive to keep him intersted in the business thriving? his van, tools, and inventory are easy to value but i don't really want to give him anything for goodwill because of no assurance the customers will stay on board. his customers are loyal but may only be to him


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## OldSchool (Jan 30, 2010)

It might be a lot cheaper and less of a headache to just go it alone with out buying his company...

Nothing a little advertising wont fix... 

I would say start fresh.....


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## peterward (Mar 8, 2011)

our area is tough to break into, starting from scratch would be monumental, far easier to start out with someone established, just not ssure what would be reasonable incentive for him


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## plbgbiz (Aug 27, 2010)

Get a consult with Ellen. She is an absolute expert in this area.

www.barebonesbiz.com


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## stillaround (Mar 11, 2009)

The little I learned about aquisitions was to look at 1 year number of calls...times what you expect as an average call...to approximate gross revenue....whatever profit would be plus assets and then multiply by a factor...assuming there are no existing liabilities....really you just want the phone number and client base. How does ( if he did $200k) $30k plus assets sound to anybody??? If there are several years of consistent revenue that is purely service, maybe a bit more....just some guesswork for conversation sake...


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## peterward (Mar 8, 2011)

this guy is ready to just quit, shut off his phone, and try to sell his van, tools, and inventory. i don't think he believes his phone number and client list are really worth anything. but i see a downside just taking them over without any participation on his part. i think it would be beneficial to have him on board but don't know how to keep him involved and not give away too much at the same time. is there anyone out there that bought an existing business? i am curious if you kept the seller around and how it worked out


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## SlickRick (Sep 3, 2009)

Just buy the assets and go with it. I am speaking from experience.


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## DUNBAR PLUMBING (Sep 11, 2008)

Let us know the final price you buy this business for.


It should be a reality check to everyone know that the plumbing business has no value when you try to sell it.


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## peterward (Mar 8, 2011)

i'll be sure to let you all know how it turns out, thanks for your input everyone


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