Terminator X

iTrader: (7)

Potential to purchase the above for a reasonable sum - it's from a person I know & in the field of work also known to me. Never having worked for myself or bought a company what should I be on the look out for?

Much obliged for any advice, TX.

prodriverules

iTrader: (52)

Don't know about that but tell your mum I was on the look out for her earlier John

RobsyUK

iTrader: (2)

You need to see what the yearly turn over is and then work out costs profit etc. then see if it's worth your time to do it...

And how many fitties work there.

zip106

What are you actually buying?
Plant/machinery?
Goodwill?
Customer list?

DEATHLYREAPER

also where work comes from mates etc

JohnSmith

Obviously not my boss

Terminator X

iTrader: (7)

His projects & customers I guess, there are no assets of any great worth. It's my line of business which I've been in for 20 years.

TX.

Neanderthal

iTrader: (6)

What's the chap your potentially buying this off going to do once he sells up?
The last thing you want is to buy his projects and customer list only for his loyal customers to leave you to follow where ever he's gone to.

Budgie

iTrader: (4)

Impossible to answer John
My business turns over £1m a year and employs on average 25 staff, yet without my name at the top, most of the customers would shop around instead of trusting my company name.

nizmo80

iTrader: (2)

Hi TX

here is a link for things you need to know for running your own company mate.

http://www.businesslink.gov.uk/bdotg/action/home

also speak to Addi I think he runs his own company
he might be able to give some advice.

Terminator X

iTrader: (7)

Good point, he's moving away to another country so not likely / impossible for them to follow.

TX.

fitzscoob

As budgie mentions above, is the business acutally worth anything once the current owner leaves?

I'm not sure what line of work you're in already but depending on how it works, are you also sure you want to swap the luxury of drawing a salary from another company and taking on the risk of ensuring you pay the VAT man, and all your taxes, suppliers, staff, PAYE et. on time?

Either way, not much help, but the details you have given are a little vague. Good luck whatever you choose to do!

Arkwright

iTrader: (3)

This guy looks like he`s doing alright at it. Although the hours look a bit unsociable.

http://www.onemanband.org/onemanband...band-bahia.htm

EddScott

Is it a limited company?

AFAIK if its the Ltd Co you'll end up with any liabilties currently outstanding with the company you are buying.

Buy the assets from him and then choose to be self employed or set up a Ltd Co - Ltd Co can be a good idea if you might be earning close or over the 40% threshold (pay a low salary and the rest in dividends)

Again, AFAIK, its better for him to sell the Ltd Co from a tax POV but better for you to buy the assets not the Ltd Co.

Puff The Magic Wagon!

iTrader: (2)

I think the thread title deals with that one

Puff The Magic Wagon!

iTrader: (2)

Why not wait until he leaves the country & then you don't have to pay for anything?

Blue by You

iTrader: (23)

One bit of advice you need to know before committing to working as a one man band - works outings can be quite lonely!

ditchmyster

iTrader: (7)

Why the secrecy about what line of work it's in.

Might help if people have some idea of the type of business.

Some things are more difficult to make a living at than others as a one man band.

Terminator X

iTrader: (7)

Apologies wasn't being intentionally secretive - it's basically a consultancy role within the construction industry, the actual title would bore you to death The chap in question does all the work himself hence the "one man band" in the title.

TX.

MJW

You need to get your accountant to have a look at the company's books to ensure it's a good buy, though I dare say if you look through them yourself you'll get a general idea. Might even be an idea to speak to his own accountants, with his permission of course.

addi monster

iTrader: (6)

Thats good advice,,
firstly check his earnings on the goverment web site there you will see all the tax ect he has been paying, then have a look at his accounts, its easy to forge some accounts to look better (for re sale and credit) or worse (to reduce tax payments) if the two tally up then you need to reach a sale price that will benefit you both

The Zohan

Yup 'Due Diligence'

By the sounds of it the business is unlikely to have any stock or assets other than intellectual property, good will and a client base. On that basis you need to get the books checked by an accountant, and a contract stating that the person selling the business will hand over all the databases, etc and refrain from doing business with their old clients for a start. Then you need to think about a hand-over period and will he leave straight away or over a period of time to be agreed.

Ultimately you need to establish a value that you are both comfortable with.

MMT WRX

Further to what's already been posted, I would want to be happy that the customer base is still healthy. Look at some historic invoicing and make sure they are still active customers who are prepared for the work to be continued by you. Sometimes customers have loyalty to a certain supplier and in this situation if that supplier ceases trading, they may put the contract out to tender.

mamoon2

If he is a consultant then the business is basically him isn't it? I'd imagine customers use his services because they know of his reputation.

What will happen when a customer rings up and the following happens.....

You: Good Morning John Smith Building Consultant, Dave speaking

Customer: Is John there?

You: No John Smith no longer works for John Smith Building Consultant anymore

Customer: Er, Ok nevermind

Arkwright

iTrader: (3)

I work in the construction Industry and it`s on it`s a@se so it doesn`t take a brain surgeon to work out the guy`s supposed to have a good business but he`s going abroad.
No offence intended but barge poles spring to mind

Budgie

iTrader: (4)

Exactly what Mamoon said, I too am in the construction industry.
There does not appear to be a business to sell, just a list of contacts he has worked for. Surely once the owner goes abroad then the work is there for the taking so price yourself right and its yours for free.
Less my 10% for stating the bloody obvious.

MMT WRX

Actually what I put earlier may well be bollox. It doesn't really matter what history there is to his business. As others have posted, it could've been a very lucrative market thats gone **** up this year. So what really matters is what's current. You need to see his order book and costings and what assurances these orders will be passed directly to you. You then need to examine the costings to calculate your profit margin. Theoretically that should give you a forecasted turnover and profit that you can base an offer on.

ditchmyster

iTrader: (7)

Sounds a bit like his customer base depends more on him as a person and him being a known quantity within his/your field of expertise, you could well find that his clients choose to use someone else, leaving you without a job and out of pocket to the tune of whatever amount he cons out of you for a list of companies that you probably already know, better to wait till he buggers off then tout for business from his customer base, and save yourself a few quid, which you will need as a new business to tide you over while you get going.

stevebt

iTrader: (8)

As above but I will only take a 5% commission If your trying to price work in the buildings now its the cheapest price that wins and if your friend leaves there is no reason why firms he deals with will carry on with you!

If you want his business find out who he deals with and ring them direct as that is what business is about.

Luan Pra bang

Sounds like its worth £0 ,no assets the only good will is based on the rep of the guy who is leaving ,you will be buying a list of customers who were happy with someone who is not you doing the work.