hoping someone could shed light on subject I know nothing about. I.ve been in business for about 25 years now. Had another contractor offer to buy my business but basically wants me to run his larger projects.how do I set price my business worth on future sales and what I should make as a p.m., benefit packages, vacation and sick leave. Have an appointment with lawyer experienced this type of sale this week. Prospective buyer doesn't want to pay lump sum buyout but once he has the cow,why should he pay for milk?.Any suggestions on approach? I am a profitable contractor just tired of doing it all myself.
tips for business sale
- Thread starter sparkfree
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Cavie
Senior Member
- Location
- SW Florida
If you are a one man band you must remember that you are selling yourself, not the business. With out you, there is no business, just a customer mailing list. Ask for a good salary, (above average) benefit package. Get an up front payment for the customer list cause once it's gone, it's gone. Put that money into an IRA and forget about. Tools, truck?$$$$$
one major question: what happens to your business and customers if you walk away tomorrow? would they follow your business name? or are you the business?
Here is an article that will give you some insight...
if you are the business, it's of no worth (other than equipment) to anyone else without you being part of the deal...
Here is an article that will give you some insight...
if you are the business, it's of no worth (other than equipment) to anyone else without you being part of the deal...
my personal opinion is that if they want to buy the business they need to fork over at least 50% upfront, then if they want to make payments on the rest try to have your attorney provide some kind of iron clad contract to do so, if they default they lose the buyout. stock transferred 49% on initial payment, the rest on final payment, you retain control until final payment. anything less is recipe for disaster. if they don't have the money to do this, how can they buy the business ?
thanks to all for your insight, helps to bounce ideas off others wiser than myself. I am planning to stay in his busines s, so most of my customers should feel comfortable. I have 8 people going into the deal adding to his manpower. hoping someone knew what p.m.'s made salary wise,I didn't seem to scare him asking for 6 figures.
cschmid
Senior Member
- Location
- Northern cold country
Here is the real deal get cash and make sure you are on the positive side..Project managers get paid decently and do not do the work but make sure you are happy with pay and stuff..no magic numbers heres but I would make it directly proportional to project size..if you have employees they are part of the business so make sure they don't get raw deal either..But if you have opportunity to sell it is better than auctioning off a bunch of old hand tools and wore out trucks..
sparkfree said:
If you have a business with value, that is one that had been reporting a profit on a yearly basis, and has assets gained thru the business, it may have some value, have your lawyer contact a business broker, id you intend to sell to someone qualified and have the best shot at getting your price.
EC's that have worked years, and never grew any assets in the business, and worked it as a job, rather then a business, are usually lucky they don't leave their estate with a bill from the junk man to remove the trash.
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