Posted by Hugh on July 06, 2002 at 12:46:17:
How much for the option? Probably $10! The owner has nothing to lose, since he feels he’s “stuck” with the business (he hates coming in every day, but for some reason he feels that he has no choice). He would continue to run it until it’s sold — and probably consult with the new owner for a period of time after its sold.
Option A BUSINESS With Motivated Seller? - Posted by Hugh
Posted by Hugh on July 05, 2002 at 14:23:12:
Today I found a very motivated seller…but it’s not a real estate he wants to sell. However, I was thinking that the same principles I’ve been learning about here (i.e., options) could apply in this situation, and I would appreciate any and all feedback. Is this a good opportunity, or a “Forget it!”
It’s a small sheet metal manufacturing business that grosses about $600,000 per year. Inventory and equipment are worth about $150,000. Cash plus receivables add up to $200,000. The yearly net is probably somewhere between $100,000 to $120,000. The business is about 15 or 20 years old, with 3 or 4 full time employees and an outside bookeeper. It is definitely a going concern (always very busy with work — I know, they’re one of my suppliers for my own businss).
The owner wants out NOW (he’s in his late 50’s, and he hates being there every day), and he’ll walk for $350,000 — the value of the cash, receivables, inventory and equipment. In other words, nothing for the business itself.
On the surface, this sounds like something that can be optioned and sold for a profit. Any advice?
Thanks!
---- Hugh
Re: Option A BUSINESS With Motivated Seller? - Posted by Follow Ups
Posted by Follow Ups on July 06, 2002 at 09:08:34:
Yes, If he’ll go for it. How much would you offer for the option and who would run the business during this time it’s for sale? Sounds like a great idea though .