Young And Full Of Ideas

Cherryhill_cons

First off sorry to everyone for the multiple questions i have been having lately i am just trying to decide what is going to be best for me business wise, ecspecialy with the economy lately. Anyways, an older friend of mine(im 20 hes in his 70's) Owns an excavating business that he is interested in selling to me. The business includes a 99 kobelco sk120 excavator with 1400 hrs, 89 case 1840 skidsteer with 1300 hours, 2 case 580 tlbs( one 4x4 one 2x4) both late eighties, a case 450 dozer( late eighties, low hours) a jcb mini ex, a international tandem (1987) and a 1991 kenworth tri axle, a float big enough for the excavator that fits niclely behind the dump, a smaller float for the mini ex and skidsteer, and a 88 gmc 3500 dually with dump box. He speacializes in septics, topsoil, grading. Also a small topsoil screening plant is included. I know the value of the equipment individualy but in a deal like this how should i give him an offer? What are different ways to take over a business? Like i said i am young and want to do this for the rest of my life but want to make sure im not going to get screwed or loose it all if the economy continues to slow down. ( Its not as bad as i probably make it sound here. Just new home sales are down a fair bit) Anything and Everything any one could help me with would be greatly appreciated, I look up to and respect all of your more experienced opinions. Thanks!
Sean Brinston

rino1494

Are you going to keep the same company name or make your own up ?? Are you going to mantain his customer base ?? Do you have financing and are you able to buy him out ??

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Life is hard. It is harder when you are stupid

Uncle Sam wants YOU....to speak ENGLISH

dayexco

go to www.machinerytrader.com click on auction results.....ave. what equipment has brought at recent auctions for same equipment. unless he can guarranty a cornered/protected market...that's all his biz is worth.

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someday, i'll be as patient as Nick.

tgeb

Would you be buying his business, with crews and contracts or just buying his equipment.

Do you have the jobs and crews to keep it going?

That is quite a bite of iron to keep moving and making you money.

Some of those pieces I would not want, but that's based on personal preferences, a topic for a different post.

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Tom

www.gebcon.com

denick

Ch,

I know that in our area there are people who help set a value on businesses and advice on setting up a purchase. it does cost but the money spent could be a very good investment. If you are buying a total business, Customer accounts, equipment, receivable's and payables. A good accountant that "knows construction accounting" can help make an assessment without a big deal by looking at the books.

If this is someone you know sometimes it doesn't seem necessary but business should be kept business. You can still be honest, fair and friends but business like.

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Nick

"Every day I remind myself that my inner and outer life are based on the labors of other men, living and dead, and that I must exert myself in order to give in the same measure as I have received and am still receiving" Albert Einstein

POOLMANinCT

ask yourself the same question in reverse.

if he did not did not have the machines/asssets, would you buy his biz???

customer base?? a guy they dug for in 1983???
maintenance accounts, snow removal or whatever? you stil have to pay out to do the jobs you bought....

assets....

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......Less with the jaw & More with the paw.....

Cherryhill_cons

I think this is the kind of biz that he would help me out with until I was ready to completely take it over. He does have a good sized customer base and besides providing services, he provides a product( suplying topsoil, aggregates) I believe i would want buy everything besides the 2wd 580, 1840c. He is well known in the area and does a quality job. Are banks easier with financing if you are taking over a business as oposed to starting fresh? And around here there is usualy a big difference iin machinery prices between auctions and classifieds, dealers, equipment trader etc. (ie a cat 320 c with 7700 hrs good u/c , good overall shape went for $20,000 cdn last RB auction) In my offer i dont want to be too low an ofend the guy. I would not be taking his crew as it is himself and 2 part timers. I have another really good operator I would be hiring as a replacement. Are there ways around taking over a business without getting the banks involved that any of you have done. Sorry for all the confusing questions and thanks for the help.

Confused yet still excited
Sean

POOLMANinCT

sometimes a biz seller will carry the note.....

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......Less with the jaw & More with the paw.....

tnmtn

sean,
it sounds to me more like you are buying his assets more than the bussiness. if he is operating that many pieces by himself with a couple part timers some of that equipment and spending plenty of down time. if i was looking for a bussiness it would be one that had all equipment working as much as possible. if there is a part of his bussiness you are interested in maybe approach him from that angle. parked assets cost money.
good luck,