Anyone know business contract lawyer

[bumblegoodie]

You're buying a business which currently doesn't properly declare it's earnings? Be careful of that. Are they asking for a multiple of off the book earnings? How is it being valued atm?

I'm a bit confused thoufh because you said you have checked their p&l but you also say they don't really have proper records.

yes a P&L statement made by the owner and not the accountant.

 

[bumblegoodie]

I looked at buying a laundromat some years ago.

They were asking a fair bit compared to the figures.

The agent pointed out to me the water and electricity consumption with a nod and a wink and a "yaknowwhadImean?"...lots of interesting accounting I suspect.

I offered based on the figures presented, and they declined the offer.

You can't have your cake and eat it.

Bumblegoodie; offer based on the figures presented and what you feel is realistic.

In this day and age goodwill accounts for zip, so I'd discount any of that for a start (learning from experience, unfortunately).

thanks for the advice BV.

was it also a cash business?

if so , what did you do to confirm their sales and net profit?

 

[bumblegoodie]

5 seconds on google

http://www.business.gov.au/business-topics/starting-a-business/Pages/buying-a-business.aspx

thanks simtr

i will read up on it.

there is a lot of money at stake and i want to make sure i get it right!!!

really buying the business is nothing like buy a house.

 

[S.T]

thanks simtr

i will read up on it.

there is a lot of money at stake and i want to make sure i get it right!!!

really buying the business is nothing like buy a house.

Yes correct - been some really good information provided in this thread but it still pays to read up on the basics if this is your first foray into owning a business. There is a lot of information provided by the government to help small business, but you need to go searching for it yourself and spend the time digesting it.

 

[BayView]

thanks for the advice BV.

was it also a cash business?

if so , what did you do to confirm their sales and net profit?

It was all cash.

Most laundromats are unless there is a laundry service component where accounts are part of the deal. The one right behind us has that and they do loads of holiday letting laundry.

So, I received all their "paperwork", the Section 27, etc and had a meeting with the agent at the premises.

Look; I have no doubt it was a money spinner and loads of cash was disappearing out of the machines without being declared; the same guy had owned it forever, but he was trying to factor the undeclared income (who knows how much that really was?) into his asking price, and wouldn't be realistic.

 

[bumblegoodie]

guys,

if i can confirm the major items such as weekly sales, cogs, wages, rent....

than wouldnt that give me a fair idea?

 

[Macca]

guys,

If i can confirm the major items such as weekly sales, cogs, wages, rent....

than wouldnt that give me a fair idea?

If it is not a franchise but speciality food then be very careful, the chef/cook may have the knack I used to call on food outlets and the number of them that changed hands over the years that then crashed and burned was frightening.

Have you had experience in the industry, have you worked in doing all that you will be required to do if you buy the business. You would need management experience, food handling and purchasing, staff management, advertising, insurance etc etc.

Find GeoffW thread on buying a Subway franchise, he bought them to run at arms length and ended up working 16 hours a day. These came with proper figures and head franchise supervision, you will be on your own unless you have a mentor.

If you are inexperienced, buying a business on rubbery figures is very, very dangerous, be very cautious.