Buying vs Starting your own
Analysing and Valuing a Round
Questions to Ask
Sales Contract etc
Lawn Mowing Business: Questions To Ask
Knowing the way this industry operates and the truth of what goes on we would like to take this opportunity to present you with some questions that should be asked of the Vendor (seller) and considerations you need to keep in mind.
Is the Business in question complete? Does the asking price include
Considerations: If you only answered Yes to one of the above then be wary. For example if customers alone are being sold without equipment etc. you need to ask yourself why? There are many reasons, however the most concerning would be that the Vendor is merely splitting his customer base and continuing to operate as a business. If this is the case you then need to ask yourself, are they going to sell me their best clients or why have they chosen to sell these clients?
How old is the business, How long have they had the clients they are selling?
Considerations: Firstly do not take the vendors word for it. Ask to see records, if need be do a search on the business name (we will happily do this for you free of charge). Obviously the greater length of business life the greater the value. This also applies to customers. The value of a business especially when valuing customers should strongly take into consideration the above and thereof the likelihood of the business' future success and return on investment.
In some cases a question you need to ask yourself is whether you willing to pay top dollar for a business or customers that are only 8 months old, then spend the next 12 to 14 months paying off the "investment"?
Reason for selling the business?
Considerations: Unfortunately the answer to this question is usually false. Most businesses sold are done so with the given reason being retirement, moving interstate or out of the area or due to bad health. While this may be a legitimate reason for some it is all to often fabricated.
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