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How to know if a business is a good deal? (alien.top)

submitted 11 months ago by Verablue90@alien.top to c/entrepreneur@indiehackers.space

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Hi all. I currently work for a small business (4 employees), and my boss is nearing retirement age.

Since I have been here the longest he offered it to me and I eould pay in installments.
I am leaning towards not buying it, but wanted a second opinion (or however many I get). I don't know the first thing about evaluating a business deal and I doubt I could afford a contract lawyer. Also he has all these stipulations for selling (i.e. I told him if I did take over I would want to make everyone remote, he says he wouldn't sell unless it was in the contract that the office stays open). Any thoughts/advice appreciated.

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[–] bluehat9@alien.top 1 points 11 months ago

You shouldn’t have mentioned that I guess, because he probably wouldn’t have stipulated that and it seems pretty strange…then again if he’s providing financing he can protect the collateral with whatever covenants he sees fit.

You’d have to think of the money you think you’ll be able to make and consider if it’s worth it. With financing, you’d want to feel confident the business will generate enough excess cash to cover the note, the eventual balloon payment if there is one, and leave enough left over that it seems worth it to you. You’d need to take on all the tasks the current owner handles.

They’ll probably want a ridiculously high price.