Growth Trough Acquisition

I would even say if someone who has never done anything in this business and buys (or already owns) another business in a different niche, and you not only sell them the equipment... but the processes and a how-to for everything you do... I would think that it would be a marketable turnkey business
 
Ron and Scott,

If you sold your business would your contracted customers have to continue doing business with the new owner? If they are then that's great but if they can seek new bids then there is no guarantee that the new owner gets anything. Or an I wrong about this?
 
junker1 said:
Ron and Scott,

If you sold your business would your contracted customers have to continue doing business with the new owner? If they are then that's great but if they can seek new bids then there is no guarantee that the new owner gets anything. Or an I wrong about this?
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If the service contract is with a legal business entity, irrespective of who is the owner of that business entity was/is at ANY given time, then post sale the contract survives in full force and effect - again, regardless of who owns the business.

Think of one of the bazillion times that your cell phone service supplier sells out to another cell phone vendor. You're still on the hook (no pun intended), but at the same time the new provider steps into the shoes of the original provider and has to honor your original contract.
 
I never understood why people think that if you buy a business with accounts/contracts involved, that the customers are automatically going to search else were for service because of it? As long as your completing the work to their standards and not rasing prices, they should want to fulfill the agreement with you.
 
Johnson said:
I never understood why people think that if you buy a business with accounts/contracts involved, that the customers are automatically going to search else were for service because of it? As long as your completing the work to their standards and not rasing prices, they should want to fulfill the agreement with you.
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There's a time period for the new people to be introduced an build that confidence.


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junker1 said:
Ron and Scott,

If you sold your business would your contracted customers have to continue doing business with the new owner? If they are then that's great but if they can seek new bids then there is no guarantee that the new owner gets anything. Or an I wrong about this?
Click to expand...

They will, they are under agreement to continue service.

Remember they had the right to cancel when you owned the biz. It's all the same, if they done like the way the new person is handling them they may jump ship.,

Some when they see that the change might even be better.

It's all up to the new folks coming in.

When I sold the grocery store division years back the company actually raised prices on about five customers right out of the gate. Didn't fit there way of doing business.


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Ron Musgraves said:
I won't tell you buying people out is bad, just has to be the right deal. Tell me any smaller company that bought a larger one out that made it. Let's here


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I'm here Ron.
 
Johnson said:
I never understood why people think that if you buy a business with accounts/contracts involved, that the customers are automatically going to search else were for service because of it? As long as your completing the work to their standards and not rasing prices, they should want to fulfill the agreement with you.
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I ain't saying they are, I am just saying that they can. Buying a service based business is not like buying a 7/11 or a Dunkin donuts.
 
Hey DJ Carroll, You started this thread but haven't heard a word out of you since. What gives dude? How many companies have you acquired personally? I haven't bought any of my local comp out.....YET!
 
Rance said:
Hey DJ Carroll, You started this thread but haven't heard a word out of you since. What gives dude? How many companies have you acquired personally? I haven't bought any of my local comp out.....YET!
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I think at least he's bought two. Maybe 3


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Pretty Interesting thread

What do some of you think about "merging" with someone else who performs some of the same functions as you but exclusively in a different area?

Ive been approached by someone to explore merging our services into one company.

His company is primarily commercial based maybe (70/30 commercial Residential)- im probably the opposite

Were probably similar in revenue- but jointly could grow much bigger-

Any thoughts??
 
junker1 said:
Ron and Scott,

If you sold your business would your contracted customers have to continue doing business with the new owner? If they are then that's great but if they can seek new bids then there is no guarantee that the new owner gets anything. Or an I wrong about this?
Click to expand...

They are contracted with the corporation. If chevron was bought out by shell, I guarantee they would not be rebidding the fuel contracts.
 
junker1 said:
I ain't saying they are, I am just saying that they can. Buying a service based business is not like buying a 7/11 or a Dunkin donuts.
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I think a rule of thumb is there's a possibility of a 30% loss at most. But only a possibility.

I know if I sold my company, everyone i have agreements with would be perfectly fine about a new owner as long as he/she kept them happy. None of them would shop around unless they had a reason too.
Maybe it's just a southern thing?
 
Johnson said:
I think a rule of thumb is there's a possibility of a 30% loss at most. But only a possibility.

I know if I sold my company, everyone i have agreements with would be perfectly fine about a new owner as long as he/she kept them happy. None of them would shop around unless they had a reason too.
Maybe it's just a southern thing?
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Well, technically there's a possibility of 100% of them jumping ship. The probability is just very low.

I've been involved in a few residential contract sales, and theres been roughly a 5% drop rate. My assumption is that they were already unhappy with service and used the change of ownership as their reason for jumping ship. Pure speculation though.
 
Rance said:
Hey DJ Carroll, You started this thread but haven't heard a word out of you since. What gives dude? How many companies have you acquired personally? I haven't bought any of my local comp out.....YET!
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Hey man - sorry been on the boat all weekend :)

I have purchased 3 businesses and will be acquiring one of our main subs next year...
 
DJ Carroll said:
Hey man - sorry been on the boat all weekend :)

I have purchased 3 businesses and will be acquiring one of our main subs next year...
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Making them an offer they can't refuse......?
 
The three I bought out were all different scenarios but yes the sub will be making 10k more per year and have a new work truck and company phone. He will be salary and will run our Northern KY/Cincinnati branch as we will be opening one with the acquisition of his business plus expanding our portfolio to cover another 450g of green maintenance work and about 100g more of snow.
 
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