Anyone ever buy a company?

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Kevlar

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Oct 14, 2004
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So, this company I have been the office manager of for 3 yrs. is going to be sold. The past 2 yrs. of gross income has been 2.2 mill. The equipment is at least 10 yrs. old that I know of and some of it has broken down, it has been repaired.

I've been told that you take a 1/4 of the total earnings from the past 2 yrs. Net profits have been around 80k a year.

It's going on the market for 800k :wtf: anyway I want to buy this place. Besides the obvious, (bills, liability etc.) is there anything I should look into as I'm putting the offer (550k) together?

:heart:
 
exclusivity and non compete on your client list is the first thing to come to mind
I hope that works out for you kevlar <3
 
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Holy shirt thats awesome. I know next to nothing about this stuff. Please keep us updated tho! I'd be interested in hearing about the process
 
Ya, the client list was one of my first things I added to that total. I guess I need to consult with the CPA for the value of the equipment and stuff. I also need to work out a lease agreement for the building.

I will definately keep you all posted.

:heart:
 
You need to look at years worth of financial statements. You don't want them to have just posted a profit for the last couple of years in order to sell it while letting debt grow.

Biggest hurdle would probably be the debt burden of the company. If you want to use the company to in essence pay the purchase loan (through a dividend), then you need to make sure the cash flow can support that given any current debts.

Not knowing your business at all, is there any chance customers would leave regardless of non-compete and go to the competition? In other words, are the current owners an integral part of the sales relationships?

Also consider if any current employees would leave and if that would be a big loss or not. We just hired a salesman who left his company because it was for sale and he was concerned about the stability of it.

Yeah generic business speak!
 
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