” Well established business” A rough rule of thumb is you will retain 1/2 the current clients after an owner change. Especially if it is a working owner situation.
Another huge asset is the company’s supplier list. Perhaps the single most undervalued asset to a buyer. You may be lucky and piggyback on some long time very loyal suppliers with great pricing.
Go talk to their competition, current clients, employees, etc. This will help you more than you can imagine.
All the good advice given here. Consider hanging your own shingle vs. buying ongoing. You can buy a lot of equipment and ‘experience’ for the amount of goodwill many owners ask for. Remember goodwill in the eyes of the owner is very biased and all too often way overvalued. Many just fed up with all of the hard work and want to exit and retire in luxury.
Term of sale is another issue to be explored more in detail as you go along. This is huge. njtosd has hit excellent points and I may add the cash flow and payments are crucial as well.
Try to tie payments of goodwill to retention of current business. This will usually include owner working for you. This is another can of worms, but necessary.
Probably best advice is to trust your gut feeling.
One more thing, there are a lot of perks for working for the man. Insurance, medical, 401k, etc. This stuff gets expensive on your own. Just keep it in mind.
