Buying an Existing Biz

I’m just starting out but a friend of mine mentioned that one of his friends is selling their window cleaning biz/accts/van.
Obviously for the right price, it would be a nice start but…
What’s a good/fair deal? How do I quantify a good deal based on sales/profits of say their last 3 years? Any pitfalls to look out for and questions to ask. Any advice will be greatly appreciated. Thanks!

is it an owner/operator type thing? is the owner also the guy that does all the work? the answer to that is really important.

if yes- market value for equipment and 30% one time buy out of each client at time of service

if no- then maybe it’s a more structured business and closer to turn-key so you would want to look at the corporate profit over the last few years. has it shown consistent, predictable growth? does it show a healthy profit at the end of each year (10%-20% or more?). It might be worth more if that’s the case. Maybe 1 year’s gross sales, or an average of the last three years gross. something like that.

are you looking to buy it as an investor, or are you looking to become an owner operator?

I would be an owner/operator as is he. I may have been premature in my posting as I just talked to the guy and he only ran it for 1 season. In November he fell off a ladder and is still recovering.
It’s still an avenue that I’d like to look into so I can get out of my corporate life a wee quicker. Thanks sir

I’m in my 2nd year, and wouldn’t buy my business if I were me (?) as a primarily residential entity.

Most of my clients want me, and some, only me to work in their house. It’s familiarity, my conversations, persona, etc.

I built my residential base through my storefront owners and managers, so that would be a strange transition as well. Residential shot off via referrals.

This dude may not operate the same way, but I’d be a bit wary.

If that’s the case then it really isn’t worth much.
He never established himself so it’s a real gamble for you
What I would do is tell him you will give him 20% of any customer you guide my way after the job is done and paid for.

His pricing has to be good also for me to continue

I agree with you. That is currently my plan. Commercial and slide into some residential
Thanks my friend

Sounds like you should be able to get a decent discount by buying his equipment as a package. It also makes a lot of sense to only pay 20% for accounts that roll to you, as mentioned. Seems like this would give him incentive to contact those clients for you.

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