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Acquiring A Computer's Business

bayviewsignworks

New Member
A nearby competitor, actually one sweet over, is retiring and has asked if we'd want to buy his whole business or part of it.

Thoughts, concerns?

He has a stable customer base which is probably the strongest selling point for us. His machines are older than what we own now.
 

Billct2

Active Member
Doubt it would be worth much, the files of the existing repeat clients may have value. I would think you'd pick up some of his business just by being in the same location, unless he is successful in finding another buyer.
 

WildWestDesigns

Active Member
The biggest thing with customer files is that unless they are under contract (which may be null and void due to the sale of this business, depending on how the contract is structured) with the closing business, there is no promise that they will go to you, even if you do have their existing files.

Not to say that they won't, but it's a gamble.
 

ExecuPrintGS

New Member
Would only value it on assets, not customers. I don't care how many "loyal" customers they have, customers are customers they are never a guarantee. Some of our best customers go elsewhere now for a cheaper price, they tend to make their way back, but nothing is guaranteed.

Assess the equipment and make the price off of that.
 
  • Agree
Reactions: 2B

Gino

Premium Subscriber
Just wait it out. Those people hafta go somewhere and since you're so close, many are bound to come to you, anyway. As for the equipment..... go look at it and make an offer that you are willing to walk away from. If you really want to buy him out, tell him you'll work at his shop 1/2 days for a few weeks and get to know the customers so there isn't such a big shift in ownership. Tell him to stay on for a while if ya like.
 

rossmosh

New Member
Lump Sum + Percentage on the sales is what my accountant and an SBA advisor recommended when I was in a similar situation. It was slightly different because I was acquiring assets from a closing business (already announced they were closing). From an open business in good shape it will be a slightly different story.

The reality is, for the current owner, best case scenario is they sell the whole business to a new owner. That way they get to markup everything. If he sells to you, you're either not going to want or not going to value a lot of stuff as you probably already have it or recognize it as dead stock. Those same items are often considered vital to the operation by a new owner.

The big thing I gathered from my conversations is you do not know the conversion/switch over ratio when buying another person's client list and files. Some will and some won't. That's why you make it for a percent on the sales. It also incentives the previous owner to push his customers in your direction. If you just hand him $50,000 and say good bye, he could put no effort to help you or screw you over. The basic idea is if you do well, he does well.

With all that said, if I tried to sell my business tomorrow, there is absolutely no way I would take a percentage on the sales over 3-5 years. I'd tell them to pay me some lump some or go away.
 

visual800

Active Member
clients are worth nothing, there is no guarantee they will stay or go, obviously equipment isnt worth anything. I guess whatever is in your heart to offer
 

boxerbay

New Member
unless he has some equipment you need its not worth it. you can do a zip code mailout to your area letting them know you are now the area leader in printing.
I have seen other businesses failing - sell to another person and the business continues to fail. It was failing because of REALLY bad customer service. So when the new buyer assumed the business no one showed up because he was still using the famously bad name.
 
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