Buy a business
Discussion
Morning Folks,
Well, where to start, I've set up and still run 3 companies over the last 14 yrs or so, nothing big, only have 6 staff in all.
But I am now looking at buying a business, only a small 1 man band, well 1 man and another part time member of staff. Its up for sale through an agent, total change of direction from what I do at present, but it will fit in ok with existing business.
But it got me thinking, I can project manage from start to finish a new start up, but have no real idea of how to buy a business, so as always I look to the power of PH for some pointers, I do of course have my accountant and solicitor on board.
I have been given 2013 accounts, 2014 are not completed yet.
Looking at 2013 accounts the turnover was £52,000 a yr, with profit before tax of £22,500 (much the same for 2012)
Company has assets of £17,000 (made up of van, tools and equipment, I'm aware this will have dropped this yr)
There are 30 ongoing contracts, comprising 22 commercial contracts derived from 6 commercial clients and 8 domestic clients. I've not had access to these yet, but I do have a meeting with vendor on Friday morning.
Asking price is £35,000.
So, boys and girls, what do I need to look for, need to ask, need to find out, blah blah blah.Thanks in advance.
Well, where to start, I've set up and still run 3 companies over the last 14 yrs or so, nothing big, only have 6 staff in all.
But I am now looking at buying a business, only a small 1 man band, well 1 man and another part time member of staff. Its up for sale through an agent, total change of direction from what I do at present, but it will fit in ok with existing business.
But it got me thinking, I can project manage from start to finish a new start up, but have no real idea of how to buy a business, so as always I look to the power of PH for some pointers, I do of course have my accountant and solicitor on board.
I have been given 2013 accounts, 2014 are not completed yet.
Looking at 2013 accounts the turnover was £52,000 a yr, with profit before tax of £22,500 (much the same for 2012)
Company has assets of £17,000 (made up of van, tools and equipment, I'm aware this will have dropped this yr)
There are 30 ongoing contracts, comprising 22 commercial contracts derived from 6 commercial clients and 8 domestic clients. I've not had access to these yet, but I do have a meeting with vendor on Friday morning.
Asking price is £35,000.
So, boys and girls, what do I need to look for, need to ask, need to find out, blah blah blah.Thanks in advance.
Does that profit represent the current owners salary? ie is it really profit?
17K assets - book value? What is the actual value?
Would want to see the contracts and understand more about how the value is shared across them and how locked in they are in terms of duration and profit etc.
17K assets - book value? What is the actual value?
Would want to see the contracts and understand more about how the value is shared across them and how locked in they are in terms of duration and profit etc.
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