Think of buying out kec comp.

apexpcllc

apexpcllc

New member
Hey there hoodies I got a question for you. A friend of mine owns a KEC company and wants to move back home. anyway he asked me if i wanted to buy him out. What kinda of money do you think his company is worth? He has about 75 accounts that are hoods and concrete. Most hood accounts range from 250.00 to 400.00 some go up to 700.00 about half the accounts are monthly. Im not buying his equipment accept for a duct cleaner. He has built a good rep and gets more accounts seems like on a daily basis. There is some competition from Pye Barker ( A&A ) Let me know what you guys think.
<!-- / message --><!-- sig -->
 
What he said look the books over and make sure your equipment is compatable for KEC work. Also remember most of it is nights and odd hours and figure in the insurance in your costs as well.
 
Most business valuations are based on net not gross plus inventories assets etc. Which varies greatly from different types of business. But I have a feeling Matt has already calculated that down from his experience with the industry.

If you are interested and even if you are cash heavy, try to buy it on contract with a minimal downstroke if possible and a percentage of just the purchased business revenue towards the principle. Give him a point or two over SBA loan rates which are pretty low I hear. You are low out of pocket and he gets an income until it's paid for. I'd for sure get him to throw in some training with the deal and time to introduce you to the clients. Friend or not put it all in writing.
 
Like what the guys said but also have an attorney look at the contracts and paperwork, never assume anything and go talk to some of the clients to see how happy they are and if they will be staying on. I have heard of some stories how a company was bought and they lost most of their customers right away when it was all said and done.

Friend or family or whatever, business is business and C.Y.A.
 
Good advice Chris. That's one reason I would base contract payments on the gross. If revenues drop then payments drop. So the seller has an incentive to keep revenues up.

And let's not forget a non-compete in case he moves back in 6 months.

A good business lawyer would be money well spent.
 
When I sold the dry cleaners three years ago (customer list only - not the equipment) I got 40% of annual gross - half up front and the remaining half over a year. We didn't need any lawyers and he paid like clockwork. If he hadn't paid on time it wouldn't have mattered too much because I already had what I needed at 20 cents.

I had the business up for sale through a broker for a year, then one day I saw a DC delivery van going by and got the name of the owner. We struck a deal within a week. Chris now cleans his concrete and one of his drivers picks up our dry cleaning every week (which we get for half price for life!:big_boss:) It's been three years and he's still got most of my old customers.

I wish everyone was as honest as that guy.
 
They are out there Tony. But few and far between. I almost bought a business years ago. After looking hard I ended up buying his accounts and equipment and not inheriting the thousands in withholding tax he owed the IRS. Gotta CYA. For anyone not familiar with that, it is a instant death type of tax problem.
 
You must log in or register to reply here.
Back
Top