Should I buy into Window Cleaning business

stephenbalmer

There has been a bit of feedback on this post, which is great for keeping me in level mind on this situation, thanks.


Given that I own my home, have no mortgage, own my cars, have no loans, no credit cards, nothing - am debt free, what would be a more realistic price to pay for 50% of this business as described or another method of investment?


Further to that, I have the cash in mainstream savings earning a pittance, what would be a better venture if not this one, in your collective opinions?


Thanks,
Steve

Sea_Shell

So if you'd have no active management involvement, they could take your money and then run the Company into the ground.... money gone!!!

Doesn't sound great to me.

stephenbalmer

Sea_Shell wrote: »

So if you'd have no active management involvement, they could take your money and then run the Company into the ground.... money gone!!!

Doesn't sound great to me.

Thanks Sea Shell, That's a great point and worthy of consideration.


I did not mention in the original post that the current owner is a lifetime friend from school days and his family knew my family the generation before. I don't think your scenarion is likely, though always worth bearing in mind.


The reason not to mention this was to get clear guidance without the 'friend element' coming into this decision.


Thanks, Steve

Pennywise

How much time will you be spending in the business?

Sea_Shell

They might not do it on purpose, but they may still make bad business decisions, friends or not.

The law of unintended consequences.

Pennywise

stephenbalmer wrote: »

what would be a more realistic price to pay for 50% of this business as described or another method of investment?

Maybe half what he's asking or £75k for 100%? One of the latest business purchases I advised on was a long established dance school making £40k profit per year. The seller wanted £100k but settled on £60k - that was for 100% not 50%, so an 18 month payback period on investment. I know its not the same type of trade, but actually similar in that it, too, was goodwill only with minimal equipment etc.

stephenbalmer

Pennywise wrote: »

How much time will you be spending in the business?

Minimal time, 6-8 hrs per week?


Thanks Pennywise.

stephenbalmer

Pennywise wrote: »

Maybe half what he's asking or £75k for 100%? One of the latest business purchases I advised on was a long established dance school making £40k profit per year. The seller wanted £100k but settled on £60k - that was for 100% not 50%, so an 18 month payback period on investment. I know its not the same type of trade, but actually similar in that it, too, was goodwill only with minimal equipment etc.

Thanks again Pennywise, I appreciate not exactly the same business, but it does perfectly illustrate that an 18month repayment period is more the expected period rather than the 46months as in this case.


Thx, Steve

lincroft1710

Your friend is valuing his business at £150K, do you think it is genuinely worth that much?

stephenbalmer

lincroft1710 wrote: »

Your friend is valuing his business at £150K, do you think it is genuinely worth that much?

Thanks Lincroft.


I am not a business person and I honestly don't know how you value a business.


I am clearly thinking it may not be and that is why I am here asking people who are wiser than I am on this subject. However, maybe i am just beine naive and should consider that if i invest this now and the business continues for another 30 years then that is a £20k per annum pension for me on top of the others.


To answer your point - I don't know how you value a business. Based on the figures above, could you suggest how much this is worth?


Thanks, Steve